If you are a small business owner, you've probably realized the sheer complexity of the regulatory environment. In fact, the Code of Federal Regulations has grown to more than 175,000 pages. Of all of the federal regulations out there, which ones are the most burdensome on small businesses? Below we've listed the five most vexing regulations for small businesses.
1. THE FEDERAL TAX CODE
As they say, "There are two things certain in life; death and taxes." Taxation also holds true for small businesses. However, there's more to taxes than paying them. The federal tax code is complecated by nature, making it hard for small businesses to navigate through. Small businesses are affected by both income and payroll taxes which attributes to the strong support from small businesses toward simplifying the tax code.
2. THE AFFORDABLE CARE ACT
The Affordable Care Act, or "Obamacare", has completely changed the landscape of the health insurance industry by adding more data collection and reporting requirements for businesses. As an example, businesses with 50 or more employees must file 1095-C forms with the Internal Revenue Services for each worker, showing that they have health insurance coverage that meets the ACA's minimum coverage requirements.
3. OVERTIME RULES
If you're on the employee side, overtime rules are a great way to ensure you get paid extra for your hard work. However, due to new Department of Labor Final Rule, some small businesses have been forced to cut workers' hours and hire more part-time workers in order to cope. From the employer's side, especially when it comes to small businesses, overtime rules are an expensive regulation.
4. REPORTING PAY DATA BY GENDER AND RACE
The Equal Employment Opportunity Commission requires employers with 100 or more workers to report how much they pay workers, broken down by sex and ethnicity as a way to combat wage discrimination. This collection of summary pay data is set to be required by businesses in March of 2018 and the standard form looks daunting; including 12 rows for different pay levels in 10 broad job categories with 15 columns identifying employees by gender and ethnicity.
5. STATE LICENSING REQUIREMENTS
State regulations can sometimes be as vexing to small businesses as federal regulations. Out of all of the state regulations, the most vexing can be licensing requirements. There is an increasing number of professions where a license is required to do business.