National Issues That Will Affect Central Wisconsin Businesses in 2016

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January 25, 2016

Staying up-to-date and compliant with new laws, rules, and regulations is an ever increasing cost of doing business. Despite the fact that at the end of 2015 Congress took important steps to provide businesses with long-term certainty by permanently extending the federal Research and Development Tax Credit and the Section 179 expensing deduction, much was left undecided. As we look ahead to the rest of 2016, there are numerous proposed regulations and potential laws that may directly affect your business’s bottom line. Here are five national issues that you should keep your eye on:

1. Regulations Regardless of the size of your company or industry, both state and federal regulators have a large impact on your business. According to the White House’s Office of Information and Regulatory Affairs, there are over 3,000 new federal regulations in the pipeline for 2016. One major regulation for businesses to watch this year is the Department of Labor’s overtime rule. The proposed “overtime rule” more than doubles the minimum salary threshold for an employee before they can be deemed exempt from overtime pay; in other words, under the proposed rule, each employee that makes under $50,440 is eligible for overtime pay. Regardless of your industry, 2016 may prove to be a challenging year on the regulatory front.

2. Health Care The national debate over health care reform will certainly rage on, but there are a litany of specific rules and regulations that all businesses and health care providers should keep an eye on. For example, the $150 billion Health Insurance Tax (HIT) which was first enacted as part of the Patient Protection and Affordable Care Act (PPACA) is set to kick in at the end of 2016. The HIT is a tax on health insurance companies based on the “net premiums” they receive from fully insured plans. These fully insured plans are the exact kind that roughly 88% of small businesses purchase for the benefit of their employees. According to the Congressional Budget Office, a HIT “would be largely passed through to consumers in the form of higher premiums for private coverage.” Thus, if the HIT takes effect at the end of 2016, small businesses who do not self insure should be prepared to pay higher health care premiums. Businesses and individuals alike are seeking solutions to provide more choice and reduce their health care costs – unfortunately unless Congress acts, the opposite will likely result.

3. Cyber Security/Data Security When big businesses like Target or Home Depot get hacked, it is front page news. According to the National Small Business Association, over 44% of small businesses have been hacked – whether they know it or not. In 2016, Congressional leaders may look to expand upon recent legislation which sets up voluntary disclosure portals for businesses to share information with the government regarding a cyber attack. Specifically, a number of recent proposals introduced in Congress would require how businesses report data breaches and when businesses are required to notify customers about a potential data security breach. Businesses need to be vigilant in protecting consumer information and 2016 looks like it could be the year Congress gets in the fight.

4. Workforce Development While Wisconsin’s unemployment rate was consistently lower than the national average for all of 2015, employers in Wisconsin often struggle to find qualified and skilled employees for many well paying positions. Wisconsin is not alone in this conundrum. There is a national bipartisan recognition that we have entered a new modern economy, and Congressional leaders are eager to revamp our technical education and skills training programs. A prime example is the pending reauthorization of the Carl D. Perkins Vocational and Technical Education Act (CTE). A revamped CTE would update the way we invest in vocational and technical education to ensure we are preparing the next generation workforce for the positions local businesses need. Similarly, as an aside on the state level, for the third year in a row, the Wisconsin Fast Forward program inside the Department of Workforce Development will be awarding up to $15 million in grants to support employer-led worker training – businesses of all sizes are eligible to apply. Building a 21st century workforce to meet the demands of a modern economy requires thoughtful and timely investment by job seekers, employers and governments.

5. Federal Aviation Administration (FAA) Reauthorization You may ask yourself, how does the FAA reauthorization affect my business? The FAA’s current authorization is set to expire on March 31. The FAA is responsible for ensuring that our nation’s air transportation and skyways are efficient and safe. A major component of the FAA reauthorization are the parameters by which local and regional airports receive grant money to expand or improve services and in some instances keep airports operating. For example, in the last four years, the Central Wisconsin Airport (CWA) has received over $15 million directly from the FAA’s Airport Improvement Program to improve its terminal building. These improvements help move people and products to central Wisconsin – and are critical to the growth of our region. Additionally, an emerging concern that will surely be addressed in the FAA reauthorization is the commercial and recreational use of drones. Whether you are a realtor, farmer, business owner, or just out to have some fun – the FAA reauthorization will further set out the registration requirements and the parameters of where, when, and how you can lawfully fly your drone. Regardless of whether your business directly uses an airport, the FAA reauthorization has far reaching implications to businesses, large and small.

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This document provides information of a general nature regarding legislative or other legal developments, and is based on the state of the law at the time of the original publication of this article. None of the information contained herein is intended as legal advice or opinion relative to specific matters, facts, situations, or issues, and additional facts and information or future developments may affect the subjects addressed. You should not act upon the information in this document without discussing your specific situation with legal counsel.

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