Federal Overtime Rule Invalidated: What It Means For Your Business

The Justice Department recently invalidated a previously proposed overtime rule by announcing it would not appeal a court decision that said the federal government overreached its authority when it expanded the number of people covered by the rule.  Therefore, the salary threshold – approximately $23,000 – under which employees must be paid overtime remains the same. 

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    Employers are astutely aware that many workers are entitled to overtime pay for hours worked over 40 hours.  Businesses may exempt workers from the requirement, however, if their duties are managerial in nature and they reach a certain salary threshold.  Last year, the Department of Labor attempted to change the standard salary threshold for this exemption from $23,660 to $47,476.  The proposed rule was challenged in court, the court ruled it was an overreach, and the current administration said it will not appeal the court’s decision.  The salary exemption, therefore, remains at $23,660.

    GCP member companies – particularly smaller businesses – were concerned about the proposed rule as it would have doubled the threshold under which employees must be paid overtime, impacting employers directly with the potential for increased compliance costs and the rule could have forced some firms to reduce employee hours.

    Public comments will continue to be accepted by the Department of Labor through September 25, 2017 on the subject.  

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    Next up: Federal labor, energy, entrepreneurial, tech, and fiscal policy matters require small business owners’ attention

    Federal labor, energy, entrepreneurial, tech, and fiscal policy matters require small business owners’ attention

    Members of Congress have been busy spending time in their districts connecting with their constituencies on the issues that are important to them. Legislators will reconvene back in Washington in the second week of September and, when they do, they’ll certainly need to roll up their sleeves, work efficiently and across party lines (where possible) if they hope to address several urgent issues that are top of mind for small business.  

    Members of Congress have been busy spending time in their districts connecting with their constituencies on the issues that are important to them. Legislators will reconvene back in Washington in the second week of September and, when they do, they’ll certainly need to roll up their sleeves, work efficiently and across party lines (where possible) if they hope to address several urgent issues that are top of mind for small business.  

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    Meanwhile, officials from federal agencies have been busy attempting to bake cornerstones of the President’s agenda (and legacy) into the mix, through a number of proposed standards related to energy and workforce that have undoubtedly grabbed the attention of the small business community. 

    As we approach the end of summer, here’s a look at just a few of the national policy matters related to fiscal deadlines, cybersecurity, patent reform, energy, and overtime rules that small business owners can expect to be discussed and examined in the coming months.

    Fiscal Deadlines

    The first deadline awaiting action from policymakers will come on September 30, which is when Congress needs to pass a funding bill to avoid a government shutdown.  A stop gap measure will likely be passed in the short-term to extend current funding levels. Come October, however, spending caps that were put in place to raise the nation’s debt ceiling will also be a big part of the discussion. The non-partisan Congressional Budget Office (CBO) predicted that the United States will likely hit the $18.1 trillion debt limit by mid-November or early December.

    Why does this matter if you own a small business?  For starters, consumer confidence dropped drastically back in 2011 – as Congress allowed its debt ceiling debates to drag on until nearly the last minute – meaning Americans were less inclined to spend and businesses were less willing to hire. 

    Could a broader fiscal deal be struck to address these issues long-term? 

    Will Congress choose to renew the Export-Import Bank’s charter, a separate deadline that passed on June 30, or will they continue to kick the can down the road? 

    Stay up-to-date on small business priority issues like these by signing up today for a free electronic newsletter from the National Small Business Association (NSBA),

    Cybersecurity

    The Cybersecurity Information Sharing Act (CISA) was introduced in the spring to help facilitate the exchange of cyber-threat information between the private sector and government.  Supporters of the legislation say it would give small businesses extra legal protections and prevent adverse effects from threats. While many believe the threat of cyber attacks needs to be addressed immediately in this country, those opposed to this specific bill worry that it would create a flow of data on private citizens to government intelligence agencies. 

    The road to final legislative action on this topic is fuzzy, but one thing is certain: there are serious, growing concerns over cybersecurity issues and the burdens they pose to America’s small business owners.  For example, NSBA’s Year-End Economic Report reported that half of the small businesses surveyed have been the victim of a cyber-attack (up from 44% in 2013).  Of those, 61% say an attack had occurred within the last year.  And, the cost of dealing with cyber attacks for small firms are at an average cost of $20,752 per attack, up from $8,699 two years ago. 

    Lawmakers have an opportunity move forward on establishing streamlined cybersecurity guidelines and protocols.  Given the facts, COSE also believes Congress should take care not to place a disproportionate burden on our nation’s smallest firms.

    Patent Reform

    Since passage of the America Invents Act in 2011, the U.S. has seen an increase in so-called patent trolls – those that do not come up with new products or ideas, but buy up patents, argue others infringe on those patents, and then threaten litigation (remember unsolicited fax scams in the 2000s?). 

    In response, some Congressional members had appeared to be moving closer to passing patent reform legislation that could actually worsen the system for America’s smallest inventors.  Although both the House and Senate Judiciary Committees have passed their respective and National Small Business Association-opposed bills, the Innovation Act (H.R. 9) and PATENT Act (S. 1137), neither bill has yet been voted on by either chamber in full.  Opposition to these bills from small business and technology advocates has become more vocal and this legislation was pulled from the July vote schedule. 

    No clear timeline has been identified for Congress to revisit the patent issue, but two other pieces of legislation have been introduced which would address interference from patent trolls and not cause harm to individual inventors, the STRONG Patents Act (S. 632) and the TROL Act (H.R. 2045).  These alternatives would improve the current patenting system by limiting abusive demand letters and ensuring small patentees can protect their intellectual property. 

    Contact your lawmakers today and urge them to support S. 632 and H.R. 2045.

    Energy

    The U.S. Environmental Protection Agency’s Clean Power Plan climate rule for power plants, which was made final in early August, aims to reduce greenhouse gas emissions from the nation’s electricity sector by forcing power plants to cut their carbon emissions 32% by 2030.  The directive requires states to develop and implement plans that ensure the power plants in their state – either individually, together or in combination with other measures – achieve the interim CO2 emissions performance rates over the period of 2022 to 2029 and the final CO2 emission performance rates, rate-based goals or mass-based goals by 2030. 

    Ohio will have until September 2018 to create a plan, two years longer than last year’s proposal called for – that is, unless the courts rule otherwise.  Craig Butler, director of the Ohio EPA, said in a recent statement that the President’s plan raises legal questions about the federal government’s authority under the Clean Air Act.  Ohio and 14 other states have since asked the D.C. federal appeals court to block the U.S. EPA from putting its Clean Power Plan into place until the courts decide whether the U.S. EPA can legally force states to limit CO2. 

    The President has stated that his plan would allow the average household to save $85 a year on energy costs, while dramatically reducing the types of greenhouse-gas emissions that lead to harmful climate change.  Opponents are concerned that the mandate would actually drive up electric costs for small business consumers.  In addition, a study conducted by NERA Economic Consulting claims Ohio would see average annual electricity rates increase by 12% due to the rule. 

    COSE believes government initiatives, like the Clean Power Plan, must foster growth, minimize hardship on the businesses that drive our economy, and allow for flexible compliance that does not add to already burdensome rules or regulations for small business owners. 

    Overtime Rules

    On July 6, the Administration proposed new overtime rules which would massively increase the salary threshold below which all employees must be paid overtime.  Perhaps even more concerning, the Department of Labor (DOL) is seeking public comments on the so-called “duties test”, opening the door to changes to be adopted in a final rule. 

    Since the announcement of the proposed rule, COSE has heard from many of our members that they are very concerned about its impact on their operations and their HR policies.  Small business employers are challenged for time – especially when you consider that they lack the kinds of policies, legal support, and HR staff that larger businesses enjoy.  And, the current deadline for public comment on DOL’s proposal makes it challenging for small businesses to analyze the materials provided by the DOL in the rule’s publication and to make accurate assessments of the impact the proposed rule would have.

    In light of the importance of the proposed rule COSE, along with our partners at the National Small Business Association (NSBA), have requested that DOL extend the public comment period for a minimum of 90 days. 

    Interested in learning more on this topic?  On August 13, NSBA held an issue briefing teleconference to discuss the proposed overtime regulations; click here to download the podcast of this call.  Tell us what you think today at advocacy@cose.org.

      



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    Next up: Feds Reach Small Business Contracting Goal

    Feds Reach Small Business Contracting Goal

    The Small Business Administration (SBA) announced that the federal government reached its annual small business contracting goal for the first time in eight years, equating to $83.1 billion of eligible contracting dollars.  Unfortunately, the feds did fall short in two prime contracting categories:  female owned small businesses and historically underutilized business zones (HUBZone). 

    The Small Business Administration (SBA) announced that the federal government reached its annual small business contracting goal for the first time in eight years, equating to $83.1 billion of eligible contracting dollars.  Unfortunately, the feds did fall short in two prime contracting categories:  female owned small businesses and historically underutilized business zones (HUBZone). Female owned small businesses received 4.32 % out of 5.00% and HUBZone received a 1.76% falling short of their 3.00% goal,  Three federal agencies did, however, receive an “A” grade from the SBA for meeting or surpassing their specific small business government contracting goal for the first time. For more information on how SBA scores federal agencies, please review the Small Business Procurement Scorecard

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    The SBA works with federal government agencies and aims to hold them accountable for providing small businesses the opportunities they need and deserve by setting prime and subcontracting goals in which agencies are expected to reach every two years.  Each agency has a different small business contracting goal and every two years, the SBA assesses and grades each agency based upon their specific goals.

    SBA Administrator Maria Contreras-Sweet applauded the progress made saying, “When we hit our small business procurement target, it’s a win. Small Businesses get the revenue they need to grow and create jobs, and the federal government gets the change to work with some of the most responsive, innovative and nimble companies in the U.S. while the economy grows."

    For more information on the results of the small business procurement scorecard results please visit our partners at the federal level, National Small Business Association (NSBA), weekly update.

    COSE applauds improvements made by the federal government that create further opportunities for small businesses and stimulate America’s economy; we encourage agencies to further support the backbone of America’s economy, small businesses.  

    2013 Procurement Scorecard Results

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    Next up: Fighting for the Needs of Small Business Owners: COSE’s Public Policy Agenda

    Fighting for the Needs of Small Business Owners: COSE’s Public Policy Agenda

    The COSE Public Policy Agenda is a guide for understanding which hot-button legislative issues impact small business owners, and what COSE is doing (with your help) to make positive change. Here’s what’s on the docket for 2015.

    Small business is the growth engine for our economy, but entrepreneurs can feel lost and unheard in legislative offices where policies that greatly impact their success are written. Meanwhile, keeping on top of the latest legislation is a challenge while running a business. At COSE, we get it.

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    As one of Ohio’s largest small business support organizations, COSE is uniquely positioned as a strong, unified voice that educates policymakers and helps them tackle the issues that impact your business every day. We’ve got a track record for success as the nonpartisan voice of small business.

    “From the very beginning of COSE’s history, the ability to mobilize small businesses and coalesce around the issues that are important to them, and get attention around those issues, has been core to what we do,” says Steve Millard, president and executive director, COSE.

     “We are a voice for small business owners, who are often forgotten in the day-to-day deliberations and discussions of policymakers,” Millard emphasizes. COSE develops a policy course of action every two years through a Public Policy Agenda that outlines hot-button legislative issues and organizes support and advocacy resources to ensure that small businesses are heard, and understood.

    “We are constantly monitoring what is going on at the state and federal levels,” Millard says. “When issues come up, we can offer testimony, bring small business owners in front of those elected officials and make sure policymakers get the information they need to make an informed decision.”

    The COSE Public Policy Agenda provides information and guidance to members and the small business community. Here are four key issues to watch this year, and how you to get involved in COSE advocacy.

    Reducing Personal Income Tax. In 2015, Gov. Kasich will continue pushing for a reduction in personal income tax, and this has a direct impact on small businesses that are not organized as a corporation. COSE is focused on ensuring that a tax reduction doesn’t result in other increases to replace the revenue, such as more fees for business filings.

    Addressing Workers’ Comp Liability. Employers must hold workers’ compensation insurance, but businesses that acquire property could inherit a surprising expense: the previous occupant’s workers’ comp ratings and liabilities. Unfortunately, most employers that get slapped with this expense don’t realize the workers’ comp liability exists on the property until they seal the deal — or start receiving the bills. “This is a financial challenge that gets very little attention, and usually by the time an employer figures it out, it’s too late,” Millard says.

    COSE wants policymakers to reform workers’ compensation successor liability policies to ensure that employers are not unfairly charged fees due to previous inhabitants’ workers’ comp activities.

    “First, this would reduce the cost of workers’ comp for that company, and also it would prevent employers from leaving storefronts empty where previous tenants have a bad workers’ comp history,” Millard says. Those empty storefronts become workers’ comp headstones because no employer wants to take on the liability.

    Focusing on Workforce Skills Training. “Skills and talent are going to be the biggest issues that small business owners face in 2015,” Millard says. COSE is dedicated to working with community stakeholders to create policies that encourage more incumbent worker training to help seal the skills gap. “Getting more small business owners involved with the state’s Ohio Means Jobs initiative so they can connect workers with job opportunities will be important,” he says.

    Supporting the Common Sense Initiative. The Common Sense Initiative (CSI) provides a regulatory framework for promoting economic development, improving responsiveness and transparency, easing compliance concerns and creating a predictable climate for businesses. The idea is to usher out regulations that discourage business, and create new policies that are relevant and business friendly.

    COSE is a strong voice for CSI, with two members serving on the CSI Small Business advisory board.

    “Regulation is the place where government action and small business operations come together and create problems, where you try to do something but you can’t because there is a regulation or rule that prevents it,” Millard explains. “Correcting these issues is an important area of focus for us.”

    Get Involved! Be heard. Join the advocacy movement and represent small business by participating in COSE initiatives. “We are so much more effective when members get involved, and there are lots of opportunities for business owners to make an impact,” Millard says. Find out more at cose.org/advocacy


    This story was originally published in the January/February 2015 issue of the COSE Update. 


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    Next up: Find Your Inner Sales Person

    Find Your Inner Sales Person

    Some people make it look so easy, don’t they? They can just waltz right up to a potential client, and then a few minutes later, there’s nothing potential about that client anymore: They’re a full-fledged customer. Think that’ll never be you? Well, we’re here to tell you there is a hidden sales person in all of us — and the resources below will help bring out that inner sales guru.

    Some people make it look so easy, don’t they? They can just waltz right up to a potential client, and then a few minutes later, there’s nothing potential about that client anymore: They’re a full-fledged customer.

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    Think that’ll never be you? Well, we’re here to tell you there is a hidden sales person in all of us — and the resources below will help bring out that inner sales guru.

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    Next up: Finding Money ($$) in Your Pocket

    Finding Money ($$) in Your Pocket

    We all jump with joy when we find that $20 bill lying on the sidewalk or in an old winter coat that's been in the back of the closet. But think about how an extra $2000 would make you feel. It would be pretty exciting, right? Well, you could be leaving at least that much on the table if you don’t take simple steps to reduce your energy use though no-to-low cost retrofit measures.

    We all jump with joy when we find that $20 bill lying on the sidewalk or in an old winter coat that's been in the back of the closet. But think about how an extra $2000 would make you feel. It would be pretty exciting, right? Well, you could be leaving at least that much on the table if you don’t take simple steps to reduce your energy use though no-to-low cost retrofit measures.

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    Each year, Ohio small businesses spend over $2 billion on energy-related expenses. That’s nearly $11,000 per business. As you may have already noticed, energy prices are on the rise, further increasing your monthly bills and annual expenses.

    Recently, COSE shared steps you can take to mitigate those rising costs. They include locking into a low-fixed rate option for your gas and electric and getting a no-cost energy assessment of your building. Though an energy assessment is an essential step, it’s only half of the solution.

    comprehensive energy assessment will both identify and provide recommendations that address the critical areas within a business where money is being thrown away. In many instances, these solutions are as simple as turning off lights and unplugging unused equipment. Some businesses may need to  replace older and more costly equipment. However, simply understanding the information will not lead to reduced expenses.  You need to take action.

    Many businesses avoid implementing recommended energy upgrades and continue to operate with inefficient equipment and lighting that cause energy waste and increase utility bills. When asked why, business owners often share that the cost of a retrofit/replacement is simply not affordable in the current economy; the ROI just isn’t as immediate as it needs to be to justify the cost. Also standing in the way are other working capital/capital expenditure priorities.  However, due to the increased rates in the electric market, today may actually be the most opportune time to invest in energy efficiency. 

    An increased cost of electricity means that for the next couple of years, retrofits performed now will have a reduced payback period. Rates have gone up on average of 50 percent for the average business, meaning that you'll see a return on your retrofit investment much quicker than you would in past years. 

    Don’t leave money on the table. An energy assessment is of no cost to you and these upgrades will enable you to put money back into your pockets in the years to come. If you are interested in any of the opportunities mentioned above or more tips to reduce energy costs, reach out to the COSE Energy team. Call the COSE Energy Line at 216.592.2205.

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