The federal government has no shortage of business regulations. Ranging from consumer protections and labor laws to fair practice and more, some can be quite a headache to full grasp and follow. But that shouldn’t prevent you from understanding everything you need to know to make sure your business is in compliance with the law.
It’s easier when you know where to look. The Small Business Administration (SBA) has a full, searchable database of the Code of Federal Regulations. You can also find much of what you need on their Laws & Regulations Resources page, but we’ve broken down some of the most essential regulations right here.
According to BizJournals, there’s more to taxes than simply paying them. Navigating the complexities of the federal tax code can often be more of a burden than the money you pay to the government over time!
The form of business you run determines what taxes you pay—see the list of business structures to determine what your business needs to file—but all businesses should be generally aware of the following tax codes:
- Income tax: Most businesses file an annual income tax return. Since federal income is a pay-as-you-go tax, this means you must pay tax as you earn or receive income during the year. And then file a return at the end of the year.
- Estimated tax: The tax you do pay is based on an estimated tax. So, at the start of the year, you estimate the total amount you will make for that whole year and then pay taxes as you earn income based on that amount. If you make more or less than what you estimated, then you’ll have to make up the difference at your annual filing—you’ll have to pay up more or receive a refund for your overpaid taxes.
- Employment tax: If you have employees, the IRS expects you to take on certain employment tax responsibilities and file certain forms. These include Social Security and Medicare taxes, federal income tax withholding, and federal unemployment tax. For more information, see the IRS page on Employment Taxes for Small Businesses.
- Excise taxes: These are paid when your business makes purchases on specific goods and are often included in the price of the product. Some activities like driving trucks on a highway that has a toll come with an excise tax. You may be under certain excise tax law if you manufacture or sell certain goods, use various kinds of equipment, receive payment for certain kinds of services, and much more. For additional information, refer to the Excise Taxes page on IRS.gov.
Employment and Labor Law
If you hire employees or independent contractors, you need to have a solid understanding of the vast array of federal and state labor laws.
Fortunately, if you’re just starting out, the Department of Labor provides the FirstStep Employment Law Advisor. This resource helps employers determine which major federal employment laws apply to their business or organization, what recordkeeping and reporting requirements they must comply with, and which posters they need to post.
See our breakdown of the most common employment laws below.
- Wages and hours: According to the Department of Labor the Fair Labor Standards Act (FLSA) prescribes standards for wages and overtime pay, which affect most private and public employment. The act is administered by the Wage and Hour Division. It requires employers to pay covered employees who are not otherwise exempt at least the federal minimum wage and overtime pay of one-and-one-half-times the regular rate of pay.
- Workplace safety and health: The Occupational Safety and Health Administration requires that employers, under the OSH Act, “provide their employees with work and a workplace free from recognized, serious hazards.” The OSH Act is enforced through workplace inspections and investigations. Compliance assistance and other cooperative programs are also available.
- Equal opportunity: Most employers with at least 15 employees must comply with equal opportunity laws enforced by the Equal Employment Opportunity Commission. Under the EEOC, it is “illegal to discriminate against a job applicant or an employee because of the person’s race, color, religion, sex (including pregnancy, gender identity, and sexual orientation), national origin, age (40 or older), disability, or genetic information. It is also illegal to discriminate against a person because the person complained about discrimination, filed a charge of discrimination, or participated in an employment discrimination investigation or lawsuit.”
- Non-US citizen workers: All foreign workers must obtain permission to work legally in the United States, and according to the U.S. Citizenship and Immigration Services, each employment category has different requirements, conditions, and authorized periods of stay. And employers must verify that a person they’re planning to hire or a current employee in the United States is authorized to work in this country. For more information about the employment authorization verification process, see the I-9 Central page.
- Employee benefit security: If you offer pension or welfare benefit plans, you may be subject to a wide range of fiduciary, disclosure, and reporting requirements under the Employee Retirement Income Security Act.
- Unions: If your business has union employees, you may need to file certain reports and handle relations with union members in specific ways. See the Office of Labor Management Standards here.
- Family and medical leave: Administered by the Wage and Hour Division, the Family and Medical Leave Act (FMLA) requires employers of 50 or more employees to give up to 12 weeks of unpaid, job-protected leave to eligible employees for the birth or adoption of a child or for the serious illness of the employee or a spouse, child, or parent.
- Posters: Some of the statutes and regulations enforced by the Department of Labor require some notices to be shared or posted in the workplace for employees’ view (for example, alcohol warnings and hand-washing reminders). Fortunately, the elaws Poster Advisor is an easy way to determine which posters you need, and you can use it to get free electronic and printed copies in multiple languages.
It’s natural to want to gain an edge on competition for your business, but according the SBA, “it is important to understand fair practice and antitrust laws so that you do not risk your business’s integrity while gaining customers.”
You can easily familiarize yourself with the SBA’s handy list of issues that antitrust laws strive to address, such as the following:
- Conspiring to fix market prices: Discussing prices with competitors, even if it affects a small marketplace, may be construed as a violation of antitrust laws.
- Price discrimination: Using dominant industry power to secure favorable product prices from buyers, even though such prices are unavailable to weaker companies in the same industry, is generally a violation of antitrust laws.
- Conspiring to boycott: Conversations with other businesses regarding the potential boycott of another competitor or supplier may violate antitrust laws.
- Conspiring to allocate markets or customers: Agreements between competitors to divide up customers, territories, or markets are illegal. This provision applies even when the competitors do not dominate the particular market or industry.
- Monopolization: Preserving a monopoly position through the acquisition of competitors, the exclusion of competitors to the given market, or the control of market prices are all in violation of antitrust laws.
Good advertising can do wonders for your business, but you need to make sure the claims in your ads and marketing are not untruthful or purposely deceptive—in order to protect consumers, many regulations have been put in place to penalize businesses that violate consumers’ trust.
Here’s how you can avoid misleading customers:
- Comply with labeling laws for consumer products.
- Know the specific rules for advertising and selling products over the internet.
- Understand the rules for advertising specific products—from alcohol to 900 numbers.
- Learn rules for marketing and advertising over the phone or email.
- Learn the rules for making environmental or “green” claims in advertising.
Of course, environmental regulation goes well beyond advertising. According to the SBA, “there are dozens of environmental regulations that apply to small businesses.” The Environmental Protection Agency and other agencies enforce these regulations for the federal government, but many state environmental agencies have their own requirements as well.
- Permits: “Some environmental laws require you to obtain an environmental permit before you can emit or discharge a pollutant into the air or water, dispose of hazardous waste, or engage in certain regulated activities.”
- Compliance: The EPA Small Business Gateway is a great resource to make sure your business is in compliance with environmental law.
“Sensitive information is usually collected from employees and customers during hiring and business transactions,” says the Small Business Chronicle, “and privacy laws prevent businesses from disclosing this information freely.”
If your business discloses an employee’s private information, including Social Security number, address, name, health conditions, credit card, bank numbers, or personal history, not only do various laws exist to keep businesses from spreading this information, but employees can sue for disclosing sensitive information.
Though employees have clear and specific rights to privacy in the workplace, the rights are balanced agains the employers’ privileges to monitor their business operations. It’s important to understand what rights you have as a business to monitor employees, and to be clear and transparent about that monitoring to your employees.
Of course, the federal government isn’t the only arbiter of business regulations. Many state and local governments have their own requirements for businesses, and it’s just as important to understand those. See our own State-by-State Guide to Business Licenses and Permits to ensure you’re in compliance with the laws and regulations of your state.
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from Fundera Ledger https://www.fundera.com/blog/government-regulations-on-business