3 Compliance Changes Impacting Business Owners in 2020

On December 5, 2019, the IRS released the final version of the 2020 W-4. The form has major changes…

Small business owners wear a lot of hats – from sales and operations to HR and finance. Payroll and HR-related regulations are constantly changing on the federal, state and local level, often times distracting business owners from their core operations. Here are 3 compliance changes that will impact business owners and HR professionals in 2020.

1. 2020 Minimum Wage Compliance

Effective January 1, 2020, more than 20 states, including Ohio, increased minimum wage rates (2020 Ohio Minimum Wage set at $8.70).

State Legislatures are also establishing Payroll Fraud Enforcement Units, cracking down on employers paying less than legally mandated minimums.

2. IRS Releases new 2020 W-4

On December 5, 2019, the IRS released the final version of the 2020 W-4. The form has major changes and been updated to reflect the changes enacted by the Tax Cuts and Jobs Act of 2018.

All new employees first paid after 2019 must use the new form. Similarly, any other employee who wishes to adjust their withholding must use the new form.

3. DOL Raises Overtime Floor

As noted in a September 24, 2019 statement, the DOL has updated “the earnings thresholds necessary to exempt executive, administrative or professional employees from the FLSA’s minimum wage and overtime pay requirements.

The Department estimates that 1.2 million additional workers will be entitled to minimum wage and overtime pay as a result of this change.

While most business owners don’t have a background in HR, all business owners are held to the same compliance standards. With constant compliance changes, business owners must stay apprised of these changes to remain in compliance.

Need assistance with payroll and HR compliance? Contact us today.

Copyright © 2020