4 Major Compliance & Regulation Issues For 2024
4 Major Compliance & Regulation Issues For 2024
Small businesses face new compliance and regulation issues this year. While these changes aim to protect workers and discourage unfair business practices, they mean additional bureaucracy, potential penalties for non-compliance, and higher expenses for small businesses. Business owners should be prepared to implement necessary changes in response to the potential new requirements.
New Reporting Requirement for Small Business Loans
In an effort to fight discrimination in lending practices, the Consumer Financial Protection Bureau (CFPB) proposed a rule that would require financial institutions and banks to report information on small business loans. Lenders would be required to report loan applicant data, including their income and demographics, to identify potential biases or unfair lending practices. Critics argue that such a requirement will cause delays in the lending process and potentially discourage banks from lending to small businesses. Due to legal challenges, its implementation is currently on hold, so its fate is still unclear. Debate is likely to continue this year.
Joint-Employer Rule of the National Labor Relations Board (NLRB)
In a revised rule, the NLRB expanded the "joint employer" definition in October 2022. Under the rule two associated companies, such as a franchisor and franchisee sharing decisions about employees, would both be accountable for unfair labor practices. The new rule would apply to most private businesses under the "National Labor Relations Act." Although it might provide more protection for workers, critics argue that the rule would place an unreasonable burden on small businesses. Due to Congressional debate and legal challenges, the implementation date has been pushed back twice. The rule was originally set to go into effect on December 26, 2023, but was pushed back to February 26, 2024. Last week, a judge in Texas once again pushed the implementation date back to March 11, 2024.
New wages and hours regulations
The US Labor Department plans to announce a new overtime rule in April of this year. One of the most notable changes this rule would enact is an increase in the salary threshold for the "professional exemption". Currently, in order for a company to avoid paying overtime to an employee, that employee must earn a salary of at least $684 per week. If enacted, the rule would increase this threshold to $1,059. This proposed change has, predictably, faced significant push back from both small and large businesses. Business should be ready to adapt to this potential change and the effect it would have on payroll processing and budgets.