In the previous segment, we reviewed how a Trump administration could impact small business owners with changes to Obamacare and the repealing of a few executive orders. In this segment, we will look at wages, taxes, and labor regulations.
Federal Minimum Wage
The federal minimum wage has been a hot topic all throughout Obama’s presidency. The current rate is $7.25 an hour and has remained at this level since 2009. President Obama had tried on several occasion to increase the rate to $10 an hour but without any success, partially due to Washington lobbyists rallying for business owners. Now that Trump is taking office, there is debate about whether he will pursue an increase or not.
During his campaign, Trump had stated on several occasions minimum wage laws should be left to the states to decide, not the federal government. This stance is evident in over half of the states, where new minimum wage laws have taken effect or are being slowly implemented. However, Trump has made some indications he would agree to an increase up to $10 an hour.
Small Business Taxes
Trump has maintained his objective to reduce taxes for businesses of all sizes. He has mentioned a rate of 15% on numerous occasions. While this rate might sound great to medium and large businesses, most small business owners are already paying that rate or less. One concern, though, is that Trump was not clear about the 15% rate and whether it would be a flat rate for all or a capped rate.
If it is the former, then some small businesses could end up paying more taxes in cases where they are paying less than 15%. If it is the latter, and the rate is capped, it could help some small businesses that are currently above the 15% rate.
Regulations on Labor
The new overtime regulations began on December 1, 2016, which raised the cap on those eligible to earn overtime, up to $47,476 annually. Initially, this was the Obama administration’s way to deal with a $7.25 an hour minimum wage and help increase the earnings of those working overtime but earning higher salaries. This change in labor law impacts small businesses and forces them to either cut overtime hours or migrate employees at higher wage levels to salaried employees.
Under a Trump administration, it is anticipated he will address this new regulation and take steps to either repeal it or modify it in some form. For instance, in exchange for raising the federal minimum wage to $10 an hour, there could be a provision included that could reduce the annual salary cap.
It will be interesting to see what issues President-elect Trump pursues immediately after taking office and how these will affect and impact small business owners. For help ensuring your concerns are voiced to Congress and others that matter, contact LobbyIt now at 202.587.2736! We provide a wide range of lobbying services for small businesses.