There are many regulatory concerns that businesses in the US must deal with, and it may be challenging to stay on top of them. The most significant compliance-related concerns that employers may encounter in 2024 are listed below, together with an analysis of the legal and regulatory framework in which these challenges are situated.
As company leaders faced with the economic effects of inflation and resorted to programmes like the Employee Retention Tax Credit and the Inflation Reduction Act, financing and eligibility for tax credits jumped to the top of the list this year. In the event that laws or rules are implemented, firms should be prepared for issues pertaining to worker categorization, compensation, and paid time off.
The company’s compliance specialists have determined that the following subjects should be taken into account by employers in 2024:
Small Business Financing
Even if there are now no new government programmes, enterprises may still take use of financial options that were left over from the COVID-19 epidemic, like:
The Employee Retention Tax Credit (ERTC)
Companies can file amended returns and retroactively claim the credit for paying qualified wages to keep employees working from March 12, 2020, through September 30, 2021 (and for some specific businesses identified as Recovery Startups, wages could have been paid through December 31, 2021). Businesses have until either April 15, 2024 (for three quarters of 2020) or April 15, 2025 (for all four quarters of 2021).
Equity in Pay
Equality in pay was back on state and municipal legislative agendas in 2022, and additional jurisdictions were expected to approve legislation in 2023. Seven states and a number of municipal governments will have enacted laws requiring employer pay disclosure by the end of 2022. Employers must also be aware of federal and state measures aimed at reducing racial and gender pay discrimination that may become laws in 2023. These initiatives target pay equality via yearly reporting comparable to the Illinois Equal Pay reporting and the present California Pay Data reporting.
Worker Classification Guidance
In late 2022, the U.S. Department of Labour released a proposal to revise the Department’s guidelines on the classification of people as independent contractors or employees for the purposes of the Fair Labour Standards Act (FLSA). The final rule from the U.S. Department of Labour will be published in 2023, but it won’t take effect until it’s applied to determining an individual’s status as an employee for the purposes of federal wage and hour law.
Employers are required to keep diligent awareness of and adherence to the extra demanding examinations for determining worker status in accordance with the many other federal, state, municipal, and industry-specific rules, and regulations.
Encouraging the Saving for Retirement
It’s likely that SECURE 2.0 will be out before the year is over, which will have a big effect on the retirement market. Expanding eligibility for the tax credit when a business establishes a workplace retirement plan, increasing the RMD age, requiring automatic enrollment in certain retirement plans, and even requiring student loan payment matching—which aims to address two crises at once: student loan debt and retirement savings—are just a few of the significant provisions of SECURE 2.0, which builds on the framework of the SECURE Act of 2019.
Wage and Hour Regulations
Following hearing sessions in the middle of 2022, it is expected that the US Department of Labour will present suggested changes to the federal overtime laws. One of the changes that would be made to reflect the current state of the labour market is raising the income threshold for exempt workers. It is projected that there would be more federal, state, and municipal regulations in areas such as fair scheduling legislation, the repeal of sub-minimum wage rates, and the removal of tip credit in some regions.
There might be an increase in industry-specific regulations following measures like the California FAST Recovery Act, which would establish a council with the power to establish fast food industry wage and hour standards and is potentially up for voter approval in 2024. This is especially likely to affect the hospitality, retail, and healthcare sectors.
Although it doesn’t seem that a federal paid leave programme will be implemented in 2023, some states in the US studied passing laws in 2022 that would have allowed employees to take paid time off to care for themselves and their qualifying family members. The most recent states to enact legislation mandating paid family leave are Maryland, the District of Columbia, and nine other states. Thanks to laws established in New Hampshire, the first opt-in, optional paid family leave insurance programme will begin in 2023. Employers and direct workers will both have access to this programme.
Security and privacy
Given the growth and enduring prevalence of a hybrid and remote workforce, businesses must modify their privacy policies and cyber security protocols to properly balance their demands against employee and consumer expectations around the protection of personal information. Companies need to be transparent about how they collect, process, use, keep, and dispose of data. The absence of federal privacy legislation hasn’t stopped state governments from expanding their data protection measures.
Other issues that employers should consider include healthcare reform, tax modifications, and remote and hybrid work.