Small Business Regulations to Know About in 2017
The election of Donald Trump and the Republican majorities in both houses of Congress has created an air of uncertainty regarding small business regulations in 2017. On February 24, the president issued an executive order requiring agencies to review and repeal all regulations considered “burdensome” to the economy.
Take for example the Fair Labor Standards Act, first adopted in 1938 to regulate work hours, the minimum wage and overtime pay – specifically, mandating that non-exempt white-collar workers are entitled to time-and-a-half pay for work beyond 40 hours per week. In 2016, the dividing line between exempt and non-exempt workers doubled to $47,476, creating a new opportunity for many workers to receive overtime pay.
However, President Trump has instructed the Department of Labor to “reconsider” the rule, which in effect means rolling it back or eliminating it entirely. At the same time, the House is debating the Workplace Flexibility Act that endorses a small business policy that will allow employers to set overtime rules as they see fit. For business owners, these developments are emblematic of the sea change in small business regulations we are likely to witness in 2017.
Paid Sick Leave for Federal Contractors
President Obama issued an executive order in 2016, known as E.O. 13706, that requires federal contractors offer their employees paid sick leave. As of the start of 2017, all federal contractors are supposed to annually provide employees up to 56 hours of paid sick leave. This rule would undoubtedly cause many small contractors to reconsider whether to apply for federal contracts. Because the rule is less than six months old, it can be rescinded without much difficulty, and it is reasonable to assume this E.O. is facing the guillotine in the Trump administration.
Small Business License Rules
Another area of uncertainty revolves around the U.S. Environmental Protection Agency, which President Trump has vowed to cut by 25 percent and roll back many regulations. For example, Title V of the Clean Air Act requires businesses, large and small, to get an operating license if they contribute to air pollution. How will deep cuts in 2017 to the EPA affect the requirements for small business licenses and permits? Will the need for EPA small business licenses evaporate, and will the lack of these licenses expose small businesses to class-action lawsuits? No one knows, which is another reason why owners must keep abreast of changes to small business policy this year.
Another agency that the Republican party has disagreed with is the Consumer Financial Protection Bureau. Due to this, it is very possible that Congress will work to reduce the policies and regulations set forth by the CFPB, or even eliminate the Bureau entirely. We got a flavor for this in the executive order President Trump issued regarding the Department of Labor’s Fiduciary Duty Rule. The Obama-era rule was established to force stockbrokers, fund managers and financial advisors to put their clients’ welfare ahead of their own. For example, under the rule, it wouldn’t be kosher for a fund manager to churn a client’s account to generate commissions. President Trump’s executive order asks the DOL to study whether the rule will harm investors by interrupting their access to retirement information and increase the price of investment services. The rule is supposed to go live in April 2017, but its fate is, at best, uncertain. The outcome will have widespread repercussions for the retail financial industry.
Beyond the ocean of federal rules, regulations, licenses and permits that a small business owner must worry about, each state has its own rules that can impact small companies. In the current era in which Republicans control the majority of state legislatures, we should anticipate a relaxing of state regulations in 2017. For example, The Utah Senate is working on a bill allowing 18-year-old residents to obtain concealed gun permits. This will allow local gun shops to sell firearms to people under 21, which should increase sales and revenues for these small businesses. This is but one example of initiatives involving gun rights, abortion rights, alcohol sales, and rare animal importations that will affect a kaleidoscope of small businesses in 2017.
With the changing political landscape, you can also expect shifting in terms of regulations for your small business. It is imperative that as a small business owner, you’re constantly educating yourself on how politics are affecting small business regulations, so that you are prepared for the future.