President Obama’s State of the Union Address included several policy initiatives that will directly or indirectly affect small businesses in the near future.
The main concerns from a payroll perspective include:
- Minimum Wage: Perhaps the most pressing future issue for small businesses: minimum wage will soon be raised a significant amount, whether first by your state or by the federal government. The President will soon issue an executive order to raise the minimum wage for federal contract workers to $10.10/hr. The federal minimum wage (for everyone, not just contract workers) is intended to be increased to the same $10.10/hr rate, with congress’s future approval. In order to meet this future change, the President challenged employers to voluntarily raise wages in the meantime.
- Retirement: Another executive order the President will make is aimed at those without access to a workplace retirement savings plan. He will direct the Treasury Department to form a new retirement savings program—one that will have a return rate guaranteed by the government—called ‘myRA.’
- Unemployment Insurance: For those who have been out of work for an extended period of time, the President urged businesses to voluntarily hire such citizens and also called Congress to renew recently expired emergency benefits for the long-term unemployed.
Other points of interest for small businesses include:
- Job Training: There will be a renewed initiative to reform federally funded job training programs, spearheaded by Vice President Biden, to provide students and workers with the skills employers need in the current economy.
- Workplace Fairness: The President also cited fair and employee-friendly workplace regulations as a continuing priority; and brought up pay equity for women as an issue requiring action.
- Infrastructure and Construction: The President indicated he will use executive authority to streamline rebuilding our infrastructure, aiming to ease the process for businesses to secure permits for federal construction projects. For funding, the president looked towards tax reforms (and ‘closing of tax loopholes’) to make these projects possible.
- Immigration Reform: For the nation’s nearly 12 million illegal immigrants, President Obama asked Congress to work together to create a comprehensive bill that provides a path to citizenship. Legislation to actually reform immigration is still on its way, however—but there is change in the works.
Many of these changes are exciting as they aim to provide positive opportunities for individuals and businesses alike, but these initiatives are not without their challenges.
