In 2018, small business owners are facing a lot of uncertainties in regards to taxes, regulations, ever-changing labor laws, and one of the most pressing issues in the news today, sexual harassment. It can be exhausting staying on top of all of the issues concerning small business owners today, but it’s necessary in keeping employers prepared for what 2018 may bring.

Here are a few things small business owners need to pay attention to in 2018:


The Tax Cuts and Jobs Act changes tax rates on profits for many small business owners, whether they are sole proprietorships, partnerships or corporations. Most will get a 20% deduction on “qualified” business income, which will be applied before the income lands on the business owner’s individual return where it would be taxed at the individual rate. But, these benefits won’t apply to everyone; some small business owners may lose out on savings due to earning income above the law’s thresholds, or because they work in a field in which the deductions don’t apply.

A lot of business owners don’t quite know yet how the tax law will affect them, and have been waiting for more specific information. The IRS recently released Notice 1036, which updates the income-tax withholding tables for 2018 and reflects the changes made by the tax reform legislation. The updated withholding information shows the new rates for employers to use during 2018, and should be enacted as soon as possible.

Health Care

Most employers have already secured health care plans for their employees for 2018, but for policies that begin mid-year, or when it comes time to select policies or 2019, there are some changes to note. Employers using the government’s Small Business Health Options Program (SHOP) will no longer be able to use the website for anything other than an information resource, and will instead need to sign up through a health insurance agent or broker or go directly through an insurance company.

Additionally, under the new tax law, the requirement that individuals buy health insurance will end starting in 2019. However, this hasn’t changed the ACA compliance requirements for business, so business owners still have to follow ACA regulations or be met with the IRS’s newly increased penalties.

Minimum Wage Rates

As of January 1st, eighteen states have increased their minimum wage rates. Ten of those states passed their own laws regarding minimum wage, and the other eight will see increases because their minimum rate is tied to inflation rates. California is currently on a path to a $15 an hour minimum wage rate, while some municipalities in the state have passed their own laws in order to meet the $15 an hour threshold even sooner. You can read more about our coverage of minimum wage hikes and exemptions here.

Sexual Harassment

One of the biggest concerns for business owners right now should be sexual harassment. It’s a hot topic in the media, and stories of sexual harassment from colleagues, bosses, or other persons of influence are popping up everywhere you turn. It’s only a matter of time before a sexual harassment complaint finds its way into your HR department.

Employers can be proactive in sending a message to employees that sexual harassment is and will not be tolerated. To help prevent sexual harassment from occurring the workplace, employers should create policies that clearly state what constitutes prohibited behavior, including both physical and non-physical offenses. Behaviors such as propositions, derogatory comments or jokes, and obscene language or gestures should be specifically outlined as examples of harassment in the employee handbook. Employers without employee handbooks, may want to make 2018 the year they create them, and may also want to consider offering more in-depth harassment training for employees and managers so that the no tolerance message can not be any more clear.

Emplicity understands that HR
Outsourcing should be simple and meaningful. As a Professional Employer Organization (PEO), we strive to be a great partner in supporting your business. If you would like to request more information on how we can assist your needs, please reach out to us at 877-476-2339. We are located in California – Orange County, Los Angeles, and the greater Sacramento and San Francisco area.

NOTICE: Emplicity provides HR advice and recommendations. Information provided by Emplicity is not intended as a substitute for employment law counsel. At no time will Emplicity have the authority or right to make decisions on behalf of their clients.

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