(Newswire.net — December 18, 2020) —
2020 is the year of change. Life as we know it is now a distant memory and the way we operate is constantly evolving. The changes have impacted every part of the business from partnerships, revenue, to payroll.
New challenges arose throughout the year and were accompanied by revisions. One business aspect, in particular, that saw a major shift was payroll. In fact, this year saw changes to payroll law like never before but what does that mean for employers and employees?
Continue reading to learn more about how the payroll landscape transformed in 2020.
Payroll Law
Payroll laws are put in place for a reason, and they’re meant to protect employees and businesses. They outline how often people are paid and provide overtime guidelines to ensure fair compensation.
The Fair Labor Standards Act (FLSA) determines these laws, and they may vary by state but maintain a similar foundation overall. There are regulations in place for paid time off, family medical leave, and retirement. Basically, there’s a law for everything that’s reflected on your paystub.
Companies need to have a clear understanding of these laws before moving forward with a paystub maker to make sure that they’re following proper protocol.
Updates to Payroll Legislation
Heading into 2020, the Department of Labor (DOL) made several updates to payroll legislation. Amongst these changes were an increase in the exemption rate for overtime, increased healthcare contributions from employees, and it allowed companies to count bonuses and incentives towards overall salary.
The year also saw increases to the minimum wage in some States and updated laws on wage theft.
How COVID-19 Impacted Laws
The coronavirus pandemic threw the economy, and traditional systems, a major curveball this year.
The FLSA developed the Family First Coronavirus Response Act to help workers during this time. The Act saw an increase in sick leave, as well as family medical leave benefits.
With rampant wage adjustments and layoffs taking place, the CARES Act stepped in and made some revisions to provide support. The biggest outcome was the payroll protection plan that gave small businesses eight weeks of payroll support.
Many small businesses faced closing down for good because of slowed revenue and the hardship of maintaining a small business payroll. It was virtually impossible to keep everything afloat without some help.
The laws that were originally in place, were not able to accommodate anything like this and prompted much-needed amendments.
What Does This Law mean for the Gig Economy?
We’re in the age of the gig economy where roughly forty-three percent of the workforce is in gigs rather than traditional jobs. While the updated laws are meant to help these workers, they actually do more harm than good.
More often than not, companies are misclassifying their contract workers which make things difficult for the individuals come tax time. Also, the laws are far too broad to support this type of worker. Since most have multiple clients at a time, they rely on the flexibility and freedom that gigs provide.
Unfortunately, the laws leave freelancers fearful of becoming unemployed with jargon that states that workers must prove that they are employees with benefits or contractors without them. The laws are damaging and instead of leading companies to hire their freelance workers and keep them on staff, they’re removing their positions altogether.
The laws seem to put workers into a box that they simply don’t fit in. Much backlash has come from them and caused some states to take action in support of gig workers.
The Law That Controls All
An unprecedented year calls for unprecedented action.
Payroll law in 2020 was different than ever before, but it’s just the beginning for what the world will have to get used to moving forward in this new normal.
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