During his keynote presentation at last month’s ALA Conference, Gene Marks, a CPA and frequent contributor covering business-related topics for The Washington Post, The New York Times, The Hill, and Forbes, Inc., outlined five workplace regulations that took effect in 2024 that not every small company may be aware of and provided guidance on how to navigate them. 

1. New classification of independent contractors. “This impacts you if you have a 1099 worker, contractor, designer, delivery driver, or anybody who provides consulting for you, your customers, or your clients,” Marks said, “If they are integral to your business, they now will most likely have to be classified as an employee, which means employment taxes, healthcare benefits, unions, etc.”  

Marks advised company owners meet with their HR attorney and go over all of their 1099 paperwork. “Figure out what each person is doing for your company and compare it to the new Department of Labor rules. You might have to make some changes. otherwise you could be facing big fines and penalties for not complying with this new rule,” he remarked. 

2. New overtime rules. This applies to employees who are salaried, have certain titles, and are not in a supervisory role. “Maybe it is someone in the warehouse or customer service,” Marks stated. “Before July 1st, if they were making more than $35,000 a year, you didn’t need to pay them overtime. As of January 1, 2025, that number will go up to $59,000. So, for that same person, who is not supervising anybody, you will have to pay them overtime for every hour worked over 40 hours.”  

Marks cautioned, “Your employees will know that they are entitled to this, and if they don’t get it, and go after you, the last thing you need is to be accused of wage theft in your community because you’re not paying them overtime. So again, consult with your HR attorney.”

3. New guidelines regarding harassment. As of April 2024, the Equal Employment Opportunity Commission (EEOC) has made business owners responsible if employees are harassed in or outside of your office. 

“Let me explain what that means,” Marks commented. “Does your office have a gender-neutral bathroom? If you don’t, it could be a hostile work environment for your LGBTQ+ employee or maybe for your other employees. More so, if you have an LGBTQ+ employee and he or she is out drinking with other employees on a Saturday night (independent of work) and some of the other employees are bullying this person, that is now your responsibility. Why? Because then that person comes back to the office on Monday, and it’s now a hostile work environment for that person — and that’s up to you to fix.” 

According to Marks, this also applies to conversations about pregnancy, childbirth, pro life/pro choice, etc.  “You don’t want to go there; these are not topics for discussion because it can create a hostile work environment for others,” he stated, adding the same is true for religious expression.

“People can practice whatever religion they want, but not in the office because that can create a hostile work environment,” he noted. The guidance also addresses the virtual work environment (i.e. video meetings and social media) due to the increasing impact of digital technology and social media. With the new EEOC Enforcement Guidance on harassment, if one of these situations occurs – for example, an employee is offended by something seen in the background of a Zoom call – this is considered a hostile work environment, and the company owner is now held responsible. 

“There are three things you need to do,” Marks commented. “First, you want to go to your HR attorney and make sure your company policy on harassment mirrors what the EEOC has in place now.  So, if anything happens, you can turn to [the offender] and say, ‘That was against our policy.’ You need to have something to fall back on.”

The next parameter involves reporting. “If that LGBTQ+ employee who was at that bar on Saturday night felt harassed by fellow employees, you have got to set up a reporting mechanism so that you know about what happened on Monday morning when you come into work and do something about it,” Marks said. There are several ways to set up a reporting mechanism: It can be as simple as having a document in Google Sheets, it might be a confidential email address for an employee to email a complaint, or it could be done from your HR platform. You want to make sure that your employees know about how to report a claim. “Basically, it’s a way to protect yourself,” he explained.

Marks mentioned that this guidance is not law, but an implementation of the Fair Labor Standards Act. As such, being that this is an election year, this guidance/regulation can remain or be stopped by the incoming President. 

4. The Corporate Transparency Act (CTA) went into effect in January 2024, which requires small as well as large U.S. businesses to file corporate transparency reports that detail ownership information. The filing deadline is Jan.1, 2025. Those who fail to file by this deadline – or fail to update their information if needed – could face up to two years imprisonment and fines up to $10,000, in addition to civil penalties of up to $591 per day.

For those unaware, the CTA was enacted in 2021 to combat illicit activity including tax fraud, money laundering, and financing for terrorism by capturing more ownership information for specific U.S. businesses operating in or accessing the country’s market. Under the new legislation, businesses that meet certain criteria must submit a Beneficial Ownership Information (BOI) Report to the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN). This report provides details identifying individuals who are associated with the reporting company.

“This is serious,” Marks stated. “Anybody who is a shareholder in your business or a beneficial owner or a significant manager, is subject to a $10,000 fine if that information is not provided.” Company owners must show the passport, driver’s license, social security number, tax ID, and contact information for each person and report it on the Treasury’s website. 

5. The Federal Trade Commission (FTC)’s non-compete rule, which essentially banned all non-competes across the country starting in August, is currently being appealed. 

“Don’t worry about non-competes in your business,” Marks said. “My smartest clients don’t worry about it. While you don’t want people leaving your business and working for a competitor, we understand that it happens. 

What you don’t want is them to be walking away with your proprietary information such as customer lists, etc.  Instead of worrying about non-competes, step up your confidentiality agreements and your NDAs,” he explained. “Have all of your employees sign enhanced and detailed NDAs and confidentiality agreements. That way, if somebody goes to a competitor down the street, you can say, ‘I wish you well, but if I get any sniff that you are using any of our proprietary information, I will rain hell down upon you because you’re in violation of your NDA agreement or confidentiality agreement. So that’s my advice, focus on NDAs instead of non-competes and you should be okay.” 

Staying abreast of evolving workplace regulations is especially important for lighting showrooms, interior design firms, and small-size lighting manufacturers who might not have a legal team at their disposal to fight claims that could easily have been prevented.