New business regulations going into 2024

New York (AP) — Regulations are a double-edged sword. They're created to improve business dealings, discourage unfair or illegal business activity, and protect workers. But, for small business owners, they often mean more red tape, higher costs and possible penalties for failing to comply.

Heading into 2024, there are several regulations that should be on small business owners' radar.

Small businesses will need to register with an agency called the Financial Crimes Enforcement Network in 2024, as part of an act passed in 2021 called the Corporate Transparency Act.

The act was intended to get a look inside shell companies and crack down on attempts by “criminals, organized crime rings, and other illicit actors to hide their identities and launder their money through the financial system,” Treasury Secretary Janet Yellen said in 2022.

Businesses with more than 20 employees and more than $5 million in sales can qualify for exemptions. But that leaves an estimated 32 million small businesses that aren't exempt. Businesses that are created after Jan. 1 will have only 90 days to comply, extended from 30. The cost of not complying could be steep: Penalties are up to $10,000.

In October, the National Labor Relations Board issued a revised joint employer rule, expanding the definition of a “joint employer.”

This means that two companies that are both responsible for some decisions about employees – such as a franchiser and franchisee, although the rule goes beyond franchises – can both be held liable for unfair labor practices. The rule only applies to labor relations. It applies to every business that falls under the National Labor Relations Act, which is most private-sector businesses.

Unions and workers' groups say the new rule will benefit and help protect workers. But small business advocacy groups say it's unfairly burdensome to small businesses.

The rule was scheduled to go into effect on Dec. 26, but pending Congressional and legal challenges, the National Labor Relations Board extended the effective date of the new joint-employer rule to Feb. 26, 2024.

Also worth keeping on the radar:

The Department of Labor in August announced a proposed rule that would let 3.6 million more workers qualify for overtime.

The proposed regulation would require employers to pay overtime to salaried workers who are in executive, administrative and professional roles but make less than $1,059 a week, or $55,068 a year for full-time employees. That salary threshold is up from $35,568.

The final rule is likely will face legal challenges, because raising the threshold would have a big impact on so many businesses. The comment period closed on Nov. 7 so the Labor Department could issue the final rule any time in 2024.