The nation’s leading remodelers participated in a variety of sales-related seminars in the late summer and early fall of 2013.
6 rules and regulations for remodelers to watch in 2012
Are you prepared for more oversight? Here are some new and updated regulations to pay attention to this year.
Collective bargaining rights
Starting April 30, any businesses with more than $500,000 in gross business volume are required to post a notice notifying employees of their collective bargaining rights. The notice is required to be 11 x 17 inches and can be downloaded from the National Labor Relations Board website at www.nlrb.gov/poster.
The poster must be “posted in a conspicuous place, where other notifications of workplace rights and employer rules and policies are posted,” the NLRB says. Failure to post the notice is considered a violation of unfair labor practices laws.
Subcontractors vs. employees
While it’s not a new rule, several states have joined a partnership with the U.S. Department of Labor to crack down on firms that misclassify employees as contractors in order to save on taxes and other associated costs.
At the same time, the IRS has been hiring more auditors and the expectation is that they will increase enforcement efforts. The difference between a contractor and an employee basically boils down to how much control the company has over the individual and how the perform their work. The IRS provides three “common law” factors to look at:
- Behavioral: Does the company control or have the right to control what the worker does and how the worker does his or her job?
- Financial: Are the business aspects of the worker’s job controlled by the payer? (How the worker is paid, whether expenses are reimbursed, who provides tools/supplies, etc.)
- Type of Relationship: Are there written contracts or employee type benefits (i.e. pension plan, insurance, vacation pay, etc.)? Will the relationship continue and is the work performed a key aspect of the business?
The IRS is currently offering the Voluntary Classification Settlement Program, an amnesty program that allows employers to reclassify contractors as employees for future tax periods and pay only 10 percent of the back taxes due and avoid other penalties and audits. (Note that this amnesty program won’t necessarily protect you from any action at the state level.)
Restricted background checks and credit reports
Many remodelers run background checks on job applicants as part of the hiring procedures. If you usually include running credit reports as part of that process, make sure you’re not in violation of state laws. Although federal law still allows it, seven states — California, Connecticut, Hawaii, Illinois, Maryland, Oregon and Washington — have already banned the practice except in limited instances, and at least 14 more states are considering a similar restriction.
No increased 1099s
It’s not all bad – the requirement scheduled to take effect this year that would have seriously ratcheted up the number of 1099s companies had to issue was scrapped by Congress. The rules would have required more paperwork for most small businesses, with companies required to file 1099s for any individual or company they do more than $600 of business with in a given year.
Small business advocates had said the requirement would cost small businesses thousands of dollars a year in extra time and labor to track and file the extra 1099 forms. The requirement was an attempt to collect an estimated $22 billion in taxes on unreported income to help fund the Patient Protection and Affordable Care Act healthcare reform package.