DENVER, Colo., July 2, 2015—The fireworks are fizzling out for Main Street, mom-and-pop enterprises in advance of the nation’s birthday, thanks to new rules released this week by the Internal Revenue Service and the U.S. Department of Labor.
Taking effect this week was an obscure IRS rule under which small businesses that get caught helping their workers buy insurance or pay medical bills can be fined 18 times more than larger employers that don’t provide coverage at all. Under the rule, which appears nowhere in the Affordable Care Act, employers who do not offer a group health plan, but give their workers additional pay to compensate for the purchase of health insurance or direct medical expenses can be fined $100 per day, per employee. Over the course of a year that’s $36,500 per employee up to $500,000 in total. The penalty on businesses for failing to comply with the employer mandate is only $2,000 per year. Click here for more information.
Also this week, the Department of Labor proposed its new rule on overtime, the only effect of which will be cut hours for workers and greatly inhibit their ability for promotions. Under current rules, managers earning more than $23,660 per year are exempt from the overtime requirement. They don’t have to be paid time and a half, in other words, for working more than 40 hours per week. The new rule raises the threshold to $50,440, which means that many more employees will be eligible for overtime. “That’s a very big expense for small restaurants and retailers and the businesses that will be hit hardest are in parts of the country where the cost of living is low,” said NFIB Sr. Legal Counsel Beth Milito. “Employers will be forced to limit hours for their workers and eliminate management positions.” Click here for more information.
ATTENTION TV NEWS EDITORS–The link above also contains a 25-second video of Milito explaining the proposed new rule, which you are free to use. The rule will now go through its comment period.
“These two rules coming from Washington, which believes it knows how to run a business better than the owners, combined with the overreaching regulatory environment in Colorado, continue to diminish the attractiveness of new business startups in the state,” said Tony Gagliardi, Colorado state director for NFIB. “Main Street business owners want to run their businesses as they see fit without intrusion by government. Employees and employers are better off when the two groups can fulfill the needs of each party on a case-by-case basis, not a one-size-fits-all mandate.”
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For more than 70 years, the National Federation of Independent Business has been the Voice of Small Business, taking the message from Main Street to the halls of Congress and all 50 state legislatures. NFIB annually surveys its members on state and federal issues vital to their survival as America’s economic engine and biggest creator of jobs. NFIB’s educational mission is to remind policymakers that small businesses are not smaller versions of bigger businesses; they have very different challenges and priorities.
National Federation of Independent Business/Colorado
1580 Logan St. Suite 520
Denver, CO 80203
303-831-6099
Twitter: @NFIB_CO
