[January 12, 2015] |
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Paychex Identifies the Top 10 Regulatory Issues Small Businesses Need to be Aware of in 2015
With the New Year in full swing, small business owners are focused on
implementing their strategic plans for 2015. An important component of
those plans should include monitoring potential regulatory changes and
understanding how they may impact the small business landscape. Paychex,
Inc., a leading provider of payroll, human resource, insurance, and
benefits outsourcing solutions for small- to medium-sized businesses,
today identified the top 10 regulatory issues that small business owners
need to be aware of in 2015.
"Staying up-to-date with the ever-changing regulatory environment can be
the difference between your business maintaining compliance and
potentially facing steep IRS penalties," said Martin
Mucci, president and CEO of Paychex. "Paychex keeps a close eye on
regulatory issues to help business owners plan for changes that may be
required in the New Year."
Following are the 10 regulatory issues Paychex has identified for 2015:
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Tax Extenders and Tax Reform. On December 19, 2014, President
Obama signed the Tax Increase Prevention Act of 2014 into law.
Approximately 50 tax breaks, known as "tax extenders," were
retroactively expanded through December 31, 2014. Some of these, such
as bonus depreciation and accelerated expensing of certain asset
purchases, are particularly beneficial to small businesses. IRS
leadership has noted that despite the delay in the initial passage of
the extenders, the tax filing season will start on time; however, due
to budget constraints, the processing of returns and refunds may be
affected. Additionally, the short-term extension could complicate a
possible rewrite of the tax code in 2015. Business owners will want to
monitor any tax reform developments for potential ramifications.
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The Affordable Care Act. The New Year brings additional
responsibilities for businesses defined as Applicable Large Employers
in the Employer
Shared Responsibility (ESR) provisions of the Affordable Care Act
(ACA). Applicable Large Employers will need to be prepared to meet new
IRS mandates to file annual information returns with the IRS and
provide statements to their full-time employees about the health
insurance coverage the employer offers in 2015.
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Taxation of Online Sales. Taxation of online sales is likely to
be an issue affecting many businesses this year. To level the playing
field between brick and mortar retailers and online merchants, and
respond to state concerns about lost revenue, the U.S. Senate passed
the Marketplace Fairness Act in May 2013, which would have allowed
states to collect sales tax on purchases made by state residents
regardless of where the seller is located. The bill stalled in the
2014 session of Congress. Because of the amount of tax revenue at
stake, businesses should expect this legislation to be resurrected
this year.
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Immigration Reform. President Obama announced late in 2014 his
plan to use his executive authority to make changes to our nation's immigration
laws. Federal agencies are currently moving forward to implement
the president's plan. Employers will need to continue to monitor
changes to the immigration system that may impact their internal
hiring and staffing procedures, particularly in terms of Form I-9
procedures and work authorization documentation, as well as address
potential labor gaps should newly authorized workers decide to look
for higher paying positions.
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Overtime Regulations. The U.S. Department of Labor is expected
to release proposed guidelines in the first quarter of the year to
modernize and streamline the existing overtime regulations under the
Fair Labor Standards Act. The revised regulations are expected o
expand the number of workers eligible for overtime pay by increasing
the minimum salary levels required for exempt status employees, and by
expanding the duties defining "administrative" employees exempt from
overtime pay. In the interim, employers are encouraged to review their
employee classifications, focusing on job duties and salary levels for
those workers classified as exempt. Employers should anticipate the
potential need to track and pay overtime rates where applicable.
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Employment-Related Legislation. Employers will need to remain
diligent in their efforts to comply with new legislation in their
jurisdictions this year. The trend of local and state governments
passing minimum wage increases is expected to continue. In addition,
hiring procedures and employment applications will need to be revised
for employers in jurisdictions covered by "ban-the-box" laws that
prohibit pre-employment inquiries into applicants' criminal histories.
Lastly, paid sick leaves and the tracking and notice requirements that
go along with this benefit will require employers to review current
sick day benefits and comply with what can be complex provisions in
order to avoid violations.
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Privacy. After some have called 2014 "The Year of the Data
Breach," there is a greater likelihood that in the upcoming 2015
legislative session, Congress will look to pass baseline cybersecurity
legislation. Businesses should begin analyzing the relationships
between technology and their customers' personal data. Customer
privacy should be appropriately protected through such means as secure
networks, timely detection of malware, enhanced credit card security,
and strong encryption. Businesses can expect increasingly vigorous
enforcement actions from agency regulators following violations of
Federal and state privacy laws.
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Retirement. There are a number of developments coming, or
currently under consideration, which may impact small business owners
who currently offer a retirement plan to their employees, or are
thinking about offering one. The U.S. Treasury in 2015 will more
broadly introduce its non-mandatory workplace savings program - myRA -
which will allow employees to place deferred funds into a program that
is similar to a Roth IRA. Additionally, 14 states have proposed
legislation that would create workplace savings programs through
employers not currently offering a retirement plan for their
employees. Other proposed legislation would offer further incentives
to small businesses to open retirement plans, provide for lifetime
income information on plan statements, and require further disclosures
around target-date funds included as plan investment options.
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FUTA Credit Reduction. Some states continue to have outstanding
federal unemployment loans in 2015. Employers in these states will
continue to have their FUTA credit amount reduced as a way to pay back
the outstanding debt. The final
list of credit reduction states was published by the Department of
Labor in November. Employers in the impacted states should plan to pay
higher FUTA taxes for tax year 2015, due in January 2016, and may want
to consider planning for the additional tax amount early in order to
avoid an unexpected tax expense at the end of the year.
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Banking Developments. With the surge in use of mobile payment
applications such as Apple (News - Alert) Pay™, businesses will also see the parallel
move toward increased payment security and mobile payment acceptance.
Small businesses should consider implementing technology that will
allow them to accommodate these trends. Additionally, heightened
regulatory pressures on banks to know the parties they are dealing
with may result in increased requests for data from business owners or
extended account-opening procedures. Payroll
cards will also continue to be an area of focus in 2015, as
several states are expected to introduce legislation relating to this
popular method of pay. Employers should ensure their payroll card
provider is up to speed on the evolving regulations in this area.
To download a Slideshare of the Top 10 Regulatory Issues Small
Businesses Need to be Aware (News - Alert) of in 2015, visit http://www.slideshare.net/Paychex/top-tenregulatoryissuesforsmallbusinessesin2015.
Paychex offers solutions to help businesses meet the demands of the
evolving regulatory landscape - from tracking the latest information
related to employer tax responsibilities to providing comprehensive
solutions to address the challenges of the Affordable Care Act. For more
information, visit www.paychex.com.
Note: The foregoing is provided for informational purposes
only, and is not intended to be tax or legal advice. Consult your
licensed attorney, accountant, or other tax professional to discuss your
particular facts, circumstances, and how these opportunities might apply
to your business.
About Paychex
Paychex, Inc. (NASDAQ:PAYX) is a leading provider of payroll, human
resource, and benefits outsourcing solutions for small- to medium-sized
businesses. The company offers comprehensive payroll services, including
payroll processing, payroll tax administration, and employee pay
services, including direct deposit, check signing, and Readychex®. Human
resource services include 401(k) plan recordkeeping, section 125 plans,
a professional employer organization, time and attendance solutions, and
other administrative services for business. A variety of business
insurance products, including group health and workers' compensation,
are made available through Paychex Insurance Agency, Inc. Paychex was
founded in 1971. With headquarters in Rochester, New York, the company
has more than 100 offices serving approximately 580,000 payroll clients
as of May 31, 2014. For more information about Paychex and our products,
visit www.paychex.com.
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