One thing that’s certain in today’s political climate is almost nothing is certain. While we can never know for sure which proposed policies will make the final legislative cut, there are several anticipated regulatory actions that accountants and their small business clients should keep an eye on in the coming months.
Healthcare remains a prominent issue on Capitol Hill, in the media and in the minds of all citizens. So far, since President Trump took office, we’ve seen the first failed attempt to repeal and replace the ACA, with the original AHCA, but currently legislators are working to pass a revised version of the AHCA through the Senate. While total bipartisan cooperation remains unlikely, there appears to be agreement across the board on certain aspects of healthcare, including the expanded use of HSAs and FSAs. A definitive direction on healthcare is likely some time away, until then, the ACA remains the law of the land and its regulations, including offering adequate and affordable health insurance coverage, reporting, and return filing, still apply to Applicable Large Employers (ALEs).
Several aspects of employment law are also on the Trump Administration’s regulatory table. Immigration policy reform was a major campaign promise for President Trump and though no legislation has been passed yet, small business owners should be aware how they can remain compliant in the face of potential mandatory e-verification and increased workplace audits. The Final Overtime Rule is also in flux after being delayed late last year. While many employers are already making anticipatory changes, it remains unclear what the final income threshold will be if the rule is implemented. In the meantime, state and local governments have taken it upon themselves to start passing their own minimum wage increases and paid time off (PTO) policies. President Trump has also spoken in favor of a higher federal minimum wage and federal PTO regulations, so small business owners should keep these potential changes in mind.
An awareness of the importance of retirement savings and an aging American population has brought retirement to the forefront of the regulatory discussion as well. While federal policy on retirement issues has been minimal so far, many states are starting to mandate workplace retirement programs. This gives small business owners the choice to offer their own 401(k) and retirement benefits or allow their employees to utilize the established state-run programs for retirement planning. Small business owners who choose to offer their own retirement plans can use these benefits as a recruitment advantage, but also must remain cognizant of potential changes to the fiduciary rule, which may impact the nature of investment advice and plan administration.
An important consideration when analyzing potential regulation is cause and effect both economically and with regards to additional resulting regulations. For example, many small business owners are eagerly anticipating tax reforms that may bring down their rates, but legislators first have to consider what impact lower taxes may have on the economy and potential sources for additional money, which may spur yet another new policy. Additionally, often regulations made at a federal level cause state and local governments to look at how this policy impacts their funding and make policy adjustments accordingly.
One thing is for certain, the regulatory environment is changing – quickly. To keep up-to-date on the latest, visit Paychex WORX.
Mike Trabold is director of compliance risk for Paychex, Inc. Paychex is a leading provider of human capital management solutions for small- to medium-sized businesses.