5 issues to watch, from overtime pay to paying for health insurance
The issue of equal pay for men and women is being played out this year on Beacon Hill and looms as a key issue in the 2016 presidential election.
Beyond revenue and profits, federal and state policy shapes a lot of what businesses do and – in some cases – can influence the future of an entity, an industry, even a good chunk of the economy.
Here are five key issues facing businesses today, focusing on legislation and regulatory policy.
1. PAYING OVERTIME
In his effort to boost the middle class amid a widening income gap between the richest and poorest Americans, President Obama wants to extend federal overtime pay to nearly 5 million salaried workers – about 110,000 in Massachusetts, according to the Obama administration – who earn less than $50,400 a year, more than double the current cap. A poll released in May said nearly 80 percent of Americans believe people making more than $23,000 a year deserve overtime .
Options for business? There are three: Restrict workers' schedules so that you don't pay it, avoid paying overtime by hiring more people to get the work done, or just buck up and pay it.
2. NON-COMPETE AGREEMENTS
In his final year as governor, Deval Patrick supported attempts to curb the use of “non-competes” that restrict the movements of employees to other companies and act as a drag on innovation and entrepreneurship. On the other side, Associated Industries of Massachusetts supports non-competes, in part because it believes they help preserve a company's intellectual property rights.
Up for consideration again? Patrick is gone, but legislative leaders on Beacon Hill indicated they're interested in bringing up the issue again.
3. EQUAL PAY, MINIMUM WAGE
Last year, state lawmakers approved a three-step increase in the minimum wage, which will cap at $11 an hour as of Jan. 1, 2017. Business groups such as The Massachusetts Retailers Association have argued that the Bay State wage hike would hurt employment and make the state less business-friendly. But elsewhere around the country such as in Seattle, advocates have pushed or are pushing for a $15 floor wage. Then there's the issue of pay equity, especially in Massachusetts, where lawmakers have filed a bill to eliminate the wage gap for women and people of color. According to federal statistics from 2013, women earn about 80 percent of what men earn.
The outlook? With income disparity looming as a major issue in next year's presidential election, this issue won't go away.
4. EMPLOYEE CLASSIFICATION
What constitutes an “employee” has become a hot-button issue brought to the surface by businesses such as Uber and FedEx, which have classified workers as contractors, rather than employees. This also includes such positions as real estate agents and construction workers. The Labor Department recently released a 15-page memo that reinforces a broader definition of “employee” that's tied to a company's influence over the worker. The memo says an “employee” is economically dependent on his or her employer, and therefore most workers are employees.
While some business groups have taken umbrage with the interpretation, saying it will upset the legitimate use of contractors, the Labor Department explained that its memo focuses on how policies are interpreted and doesn't represent a policy shift.
What you should do: Take a closer look at how you classify employees versus contractors to adhere to the change.
5. HEALTH INSURANCE
This issue has either perplexed or perturbed business leaders for at least six years, when President Obama began to push the Affordable Care Act to passage. But in Massachusetts, where the state's 2006 landmark health insurance law preceded the ACA, businesses have been pushing for the use of state-set rating factors to help determine insurance premiums for small businesses. Allowing that, they believe, rather than the smaller number of factors established by the ACA, would allow for more accurate pricing of premiums, potentially saving smaller firms money.
The alternative? Ending the benefit and forcing employees to fend for themselves, or putting up with the higher costs that could hurt employee retention.
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