From minimum wage increases to overtime changes, what's good and bad for small business?
1. Obama signed a legislative change to the Affordable Care Act that will allow small businesses more flexibility to mitigate health insurance premium increases. The law removes limitations on deductibles ($2,000 for employee-only plans, $4,000 for family plans) that applied exclusively to small group health insurance policies. It’s encouraging that both the House and the Senate approved this change to the ACA.
2. Increasing expensing limits for small businesses under Section 179 of the Internal Revenue Code is gaining steam. The Senate Finance Committee and the House Committee on Ways and Means have indicated their intention to deal with the tax provisions that expired last year, including Section 179. These are first steps toward resurrecting increased expensing levels and small business owners’ ability to deduct improvements to real property.
3. A new bill in California would require state agencies that use private contractors to award 25 percent of work to small businesses in the state. The bill would create more jobs in California.
4. According to estimates from the U.S. Centers for Medicare and Medicaid Services, 65 percent of small businesses will pay more for employee health insurance under the Affordable Care Act. About 11 million of the 17 million people who have health plans with their small business employers will see premium increases. The federal statistics merely confirm what owners already knew: The healthcare law means higher costs.
5. This spring, Connecticut became the first state to pass legislation to increase its minimum wage to $10.10—which Pres. Barack Obama is proposing to be the federal rate—by 2017. Opponents decried the move, saying it will make Connecticut less competitive as a place to run a business.
6. Obama directed the Department of Labor to create rules to make millions more salaried workers eligible for overtime pay. Experts estimate the new salary threshold for exemption would change from $455 a week to $970 per week. This would hurt small businesses’ bottom lines and could discourage hiring.