Are you up-to-date on the latest business law news? It’s tough knowing where to focus your attention. But, the government doesn’t pardon owners who lack awareness of common legal issues in the workplace. Stay in the know by planning for changes to business laws and regulations.
Business Law News
Changes to business laws and regulations occur for many reasons. Some rules account for swift adjustments in technology. Others fluctuate with the ebb and flow of politics. Small business owners must comply regardless of the reasons.
Unfortunately, regulations often favor corporations that are well-equipped to navigate tricky laws using a team of lawyers and lobbyists. Small business owners aren’t quite so lucky. Yet, government agencies help entrepreneurs decode business law news and apply them to their organization.
Understanding current changes and preparing for upcoming ones makes compliance easier on you, your team and customers. Uncover the top examples of business law rules affecting your company. Then, take steps to protect your investment.
Employment Law Issues
In 2020, many of the biggest changes relate to employment law. Legal issues in the workplace have a significant impact on your bottom line. It affects the types of employees you have, how you pay them and what your hiring practices involve. Know the difference between 1099 and W2 employees. Then, take these 3 steps to assure compliance:
- Consult with your attorney at least yearly
- Review and adjust your policies as needed
- Set reminders for industry updates
1. Worker Classification Laws
Expect more action to protect workers at the state level. However, federal restrictions could soon impact companies across the United States. New worker classification laws are a direct result of the gig economy, specifically how companies such as Uber classify workers.
Yet, small business owners who use contractors could also get caught in this web. California’s Assembly Bill 5 (AB 5) is 1 of many worker classification laws in motion. U.S. Congress recently passed the Protecting the Right to Organize Act of 2019. This act includes an ABC test similar to California’s law.
The ABC test requires you meet all 3 standards to classify workers as contractors :
- The worker “is free from the control and direction of the hiring entity in connection with the performance of the work”
- They complete work that is different from your everyday business actions
- The person owns or operates in another “trade, occupation or business”
So, if you sell clothing and hire a plumber to fix your plugged toilet, then this is acceptable. But, if you employ a contractor to sell your clothing online, then the area gets murky.
2. New Overtime Rules
On Jan. 1, 2020, new overtime rules went into effect. This “white collar” overtime exemption impacts how you classify employees by setting a minimum income level for those classified as exempt salaried employees. If your current salaried staff members receive less than $684 per week, then you must change their classification to non-exempt.
- Exempt salaried employees get paid one amount regardless of hours worked
- Non-exempt employees receive payment for “all hours worked over 40 in a workweek”
For store operators and restaurant owners, salaried management is common. To comply, you’ll need to either boost your salaried managers’ pay up to $35,568 yearly or change their classification. This current business law issue makes it important to avoid payroll mistakes.
3. Hiring Business Laws and Regulations
A host of other common legal issues in the workplace could affect your business, depending on the state you operate in. Many states saw minimum wage increases and the addition of paid sick leave laws. Examples of business laws include:
- In Illinois, the Illinois Human Rights Act (IHRA), now covers all employers with 1 or more workers. Previously, the law only applied to companies with 15 employees. This broad act prohibits discrimination “with respect to employment, financial credit, public accommodations, housing and sexual harassment, as well as sexual harassment in education.”
- Employers with more than 10 employees must provide 1 hour of paid leave for every 40 hours worked according to the new Maine law, An Act Authorizing Earned Employee Leave.
- More than 150 cities in 35 states have a “ban the box” or “fair chance” ordinance in place. This rule bans private employers from including questions about criminal convictions on job applications.
Business law issues today impact nearly every industry and vary widely among states. Your local Small Business Administration (SBA) office can provide further assistance on changes to business laws and regulations in your area.
Technology Law Issues
Even if you’re not a technology company, tech law issues impact how you do business. The Federal Trade Commission (FTC) oversees updates to privacy and security standards. But, more states are taking the lead with data privacy and security rules.
4. Consumer and Employee Privacy Laws
Privacy laws affect how you handle prospects, customers and employee data. You might have heard of the European Union’s General Data Protection Regulation (GDPR). Passed in 2016, this law set minimum standards for collecting and using personal data.
If you do business in Europe, this already affects your company. Many experts expect American laws to follow suit as well. For instance, California’s Consumer Privacy Act (CCPA) went into effect on Jan. 1, 2020. This new law restricts how businesses use and share consumer data.
The Consumer Online Privacy Rights Act (COPRA) is a federal bill that was unveiled in November 2019. Even if Congress doesn’t pass it, similar legislation will likely be proposed in the future. These laws create rules about disclosures, posting privacy notices and possible reporting to federal agencies.
5. Data Security Rules
Cybersecurity continues to be a top concern for business owners. As more companies shift toward cloud storage and software as a service (SaaS) business models, it’s important to consider how a data breach affects your business. The National Conference of State Legislatures reports, “At least 25 states have laws that address data security practices of private sector entities.”
You might think these problems are out of your control; but, ultimately, you’re responsible for tracking your data storage and processing. Plus, you must inform customers and staff about potential data breaches.
For instance, when you send out 1099s or other types of forms, it’s tempting to choose the quickest and least expensive online service. However, cheaper and faster platforms could be less secure, putting your customer or employee data at risk. That’s why it’s vital to form partnerships with trusted organizations.
6. Permission-First for New Tech
While not a widespread rule, there’s been some movement to restrain companies from tossing out new technologies that impact communities. Previously, tech companies developed and then introduced new technology, such as robot delivery service, without first getting permission from city leaders.
However, this led to some major issues in cities such as San Francisco, where reports of accidents with robots became a problem. As companies employ various technologies, you’ll find more business laws cropping up to address them. Whether your tech relates to drones or food delivery robots, listen to what your city leaders say before pushing your latest invention into the community.
Tax Law Issues
With tax season in full force, you’ve undoubtedly encountered recent changes to tax laws. From the new Withholding Certificate (Form W-4) to changes in your deductions, tax law issues affect your business.
Although the recent Tax Cuts and Jobs Act of 2017 was a sweeping change, rules can still differ from year to year. Using a certified public accountant (CPA) is a way to stay on top of these critical business law issues today.
7. Revised and New Business Tax Deductions
Business deductions change the amount of income on which you pay taxes. The Internal Revenue Service says business owners might qualify for a “new deduction for qualified business income (QBI) from a qualified trade or business operated directly or through a pass-through entity.” Other changes include the following:
- Changes to fringe benefit deductions (transportation, awards and moving expenses)
- Temporary 100% expensing on certain assets (with first-year bonus depreciation)
- Adjustments to meal and entertainment expenses
8. Revised and New Business Tax Credits
Tax credits reduce the amount of tax that you owe. Two modifications might affect your small business.
- Employer credit for paid family and medical leave
- Rehabilitation tax credit
Your CPA will walk you through any changes that impact you.
Environmental Law Issues
Depending on your industry, you could see an increase in regulations or a rollback of rules. Fortunately, each state has a Small Business Environmental Assistance Program (SBEAP) — an agency that helps you decipher and comply with various regulations. This small business fact sheet provides extra guidance.
9. Single-Use Plastics
Whether you hand out straws at your restaurant or send customers home with plastic bags, environmental law changes could impact your business. Many cities and states have already passed rules banning the use of single-use plastics, and more legislatures have proposed similar bans.
Even if your area hasn’t yet enacted a ban, it would be wise to start testing different ways to reduce your use of single-use plastics. Not only could this help attract new customers who support banning single-use plastics, it gives you time to test different alternatives before you’re forced to do so via the law.
10. Proposed Changes to the Toxic Substances Control Act (TSCA)
The Environmental Protection Agency (EPA) issues frequent updates. If you use, manufacture or process chemicals, then it’s essential to pay attention. For instance, you might need to update your safety data sheets (SDS) and train workers on correct use of chemicals or cleaning supplies in the workplace.
International Business Law Issues
Business law issues today affect any company that sells products or hires staff oversees. You face a variety of rules relating to shipping products, processing payments and handling staff or contractors in foreign countries. While laws passed in the U.S. are meant to help business owners and protect you, it may also impact your profits.
11. Online Sales of Counterfeit Goods
When purchasing supplies or inventory online, you could encounter international suppliers selling counterfeit goods. An executive order President Trump signed on Jan. 31, 2020, aims to reduce contraband from entering the U.S., and adds extra rules that importers must follow.
12. Changes to Packaging Standards
If you send packages overseas, you need to abide by various business laws and regulations. International business law issues can add to the complexity of your packaging and increase costs. Examples of these business laws include how many languages your instructions must be written in. Business News Daily reports, “In Europe, your instructions, even for the simplest product, will be in multiple languages, sometimes up to 24 languages.”
Stay Current on Business Law Issues
Business laws and regulations often change. Stay abreast of the latest business law news by working with your local SBA office and subscribing to industry publications. With due diligence, you can prevent common legal issues in the workplace.