Regulations have been a part of the business landscape since ancient times. But in the modern era, they seem to be coming thick and fast. Bureaucracies are cooking up new rules all the time.
It’s a good idea, therefore, to occasionally take stock of the major regulatory issues that companies face. Here’s what’s on the table in 2021.
Sick Leave And COVID-19 Leave
COVID-19 seems to have a special status among diseases and regulators are responding. Companies with less than 500 employees are now subject to rules which compels them to provide paid leave time for workers with COVID-19 infection. They must also cover the wages of workers who have to spend time off work to look after children following school closures.
These new regulations are making life financially challenging for many companies. Wage costs are still high, but the actual productivity of workers on the ground is either low or non-existent. Some are getting around this issue by instituting work from home directives, but many are simply having to pay fees.
Work From Home Orders
Regulators are also looking at how to manage the economy when more people work from home. During the pandemic, there was a shift away from the office and into domestic premises. How this shift affects business premises classifications for tax purposes remains to be seen. Some states gave companies a reprieve for placing taxable status on personal addresses, but many pointed out that the relief wouldn’t be permanent. The implication is that work-from-home arrangements may not last forever.
Joint employment legislation is changing the relationship between the subcontractors and the franchise community. The goal of the system is to make the current regulations fairer and ensure that employees are treated as such if they meet certain criteria.
Businesses, therefore, are having to react by changing their obligations to employees for pay and hourly contracts.
However, companies should consult with agencies, such as Eric Thronson, on the degree to which the new rules apply. Certain aspects of the laws were struck down in federal court when plaintiffs proved that their definition was too narrow in some instances.
Related to this is the concept of worker classification. New rules are coming in all the time to address complex employer-employee relationships in many industries.
For instance, the Department of Labor Wage and Hour Division is expected to finalize their new worker classifications this year, making it easier for employers to classify workers as independent contractors. This change in the rules would actually make it easier to exclude them from federal wage and hour laws, and exempt them from various benefits.
For businesses, the new classification system is most welcome. Many firms are becoming tired of receiving penalties for misclassifications under a system where the existing rules are not particularly clear.
Lastly, the passing of the SECURE Act in 2019 allowed unrelated businesses to create joint pooled employer plans. This would allow individual companies to shed their individual fiduciary duties and shift administrative duties to a third party.