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New Laws and Tax Changes That Might Affect Your Business in 2019

Happy New Year! Time for a fresh slate — and a fresh new crop of laws and other legislative changes taking effect in 2019 that you need to be aware of:

California is one of almost a dozen states that have passed various protections and legislation in direct response to the #MeToo movement this past year. Some states are rolling out changes in various stages in the next 1-3 years, but some take effect as early as January 1, 2019.

In California, if you have five or more employees, you now need to provide sexual harassment training to all supervisors and non-supervisor employees. This is a dramatic shift in the requirement that previously mandated this training for every company with 50 or more employees. As an employer, you need to start rolling out this training in 2019 and all training must be completely in place by January 1, 2020.

Also in California, you as an employer can no longer force employees to sign a ‘non-disparagement’ agreement to release the employer of claims, including for sexual harassment, as a condition for a raise or bonus, or as a condition of employment starting January 1. Be sure to consult with your HR team/insurance agent on the rules (State Senate Bill 1300) — because there are exceptions where employees can waive this right.

By the end of 2019, California-based public companies must also have at least one female on their Board of Directors and that requirement slides up to two or three depending on the total number of board members.

Does your business use plastic straws? Listen up: State Assembly Bill 1884 goes into effect January 1, 2019, which requires all California restaurants to only give plastic straws to customers who explicitly ask for them.

For now, this legislation only applies to full-service restaurants and fast-food/take out restaurants are exempt, but that may change. Does your business have an alternative plan in place to minimize plastic straw use? Offenders face fines of up to $300 annually for violation of the law.

Some federal laws and tax changes may also impact your business in 2019:

This will be the first full year under the “Tax Cuts and Jobs Act” brought forward by the Trump administration and the way tax structures are changing may impact your bottom line.

To avoid unnecessary surprises and to also maximize any tax savings (perhaps investing in new equipment or facilities upgrades), be sure to meet with your CPA to review all the changes and how they will directly impact your 2019 P&L ledgers.

While not technically a ‘business’ tax issue, the federal alimony deduction for taxpayers goes away on January 1, 2019 and alimony will no longer be considered taxable income for recipients. While this does not necessarily impact your business operations, it may directly impact your personal finances as the business owner and needs to be taken into account with other tax changes happening in the new year to help you think ‘big picture.’

Be on the lookout later in 2019 for potential new legislation and regulation from the Department of Labor on changes in the way overtime is calculated and which employees are eligibleOptions are currently being debated and things may change based on the incoming House and Senate, but your company may be impacted with a larger number of employees being eligible for overtime.

Proactively, you may want to work with your HR consultant/insurance broker to develop a plan to give your employees options in advance on how to adjust their compensation, such as increasing overall base compensation or giving them more time off in lieu of overtime pay — it may save you in the long run!