A drastically and forever changed workplace awaits many businesses owners as we flip the calendar into the new year. Traditional to every January 1, there are a number of new laws and regulations that go into effect impacting your business. This year also brings a wave of trends and modifications brought about by COVID-19 that are destined to continue and will also serve as a driving force for how you operate your business. Some of the changes for you to consider as you navigate the year ahead:
Laws:
- AB 685 took effect in California on January 1, mandating that California businesses must notify employees who may have been exposed to COVID-19 at their worksite within one business day and document the communication through very specific reporting requirements.
- Privacy laws and data collection: This past November, California voters passed Proposition 24, known as the “California Consumer Privacy Proposition.” This new proposition drastically increases requirements for businesses to protect personal information, including by “reasonably” minimizing data collection, limiting data retention and protecting data security. It also strengthens accountability measures by requiring companies to conduct privacy risk assessments and cybersecurity audits, and regularly submit them to regulators. In addition, it clarifies that individuals have the right to opt out of both the “sale” and “sharing” of personal information, and adds protections for a new category of “sensitive data.” (source: Brookings Institution). It is critical to make sure your business is in compliance of these new privacy regulations.
- Employee discrimination complaints: Also beginning January 1, AB-1947 extends the time employees can file a complaint from six to 12 months if they feel they have been fired or discriminated against at the workplace.
Tax Regulations:
- Your business may have received funds from the Paycheck Protection Program (PPP) in 2020. Originally, PPP funds could only be forgiven if used for payroll and key expenses like insurance. Now, recent updates to PPP forgiveness standards indicate more expenses such as rent and other overhead can be paid with PPP funds and not impact the forgiveness status. Additionally, forgiven PPP funds are not taxed as income.
- At the very end of 2020, a new $900 billion Coronavirus relief bill was signed into law, which includes updates to the Families First Coronavirus Act, CARES Act and the Paycheck Protection Program. One of the biggest elements of the new act includes a provision that you can still deduct expenses paid for by PPP funds. Previously, any cost you paid (such as payroll or rent) that was funded with a PPP loan would not be deductible off your income when it comes time to do your business taxes. Now, you can deduct all expenses as you normally would, regardless if they were paid for with PPP funds or not.
- 100% expense deduction for meals: In previous tax years, you were only able to deduct 50% of your meal and entertainment costs on your business taxes. Now, under the most recent Coronavirus relief bill, you can deduct 100% of your meal expenses in 2021 and 2022, helping to lessen overall tax burden and also encourage take out and meals out to support the restaurant recovery effort.
Embracing and Maximizing Trends:
- One thing this year has made clear — business travel will change forever. Traditional meetings, seminars and conferences are going to look different in the future. However, this can be a tremendous opportunity for your business — use 2021 to examine ways to modify traditional events and programs in new cost-saving ways. Travel deals and offers will likely abound in the coming year as well so keep a lookout for discounted airfare, hotel stays and other offers you can take advantage of.
- Throughout the pandemic many health providers and insurers have stepped up their offerings regarding telemedicine and online services. Be sure to work with your HR team or benefits provider to make the most of any of these new and continuing services for employees — helping to protect your team’s physical and mental heath.
