(ThyBlackMan.com) Handling government regulations and taxes can be highly confusing for a new business owner who has begun hiring employees because there are many statutes, regulations, and levels of government. Statutes are the laws that have been passed by a legislative body while regulations are the rules created by a regulatory agency to comply with the purpose of the statutes.
One factor that adds to this complexity is that the statutes and regulations are affected by jurisdiction. If a company has many branch offices or is doing business in several states or local jurisdictions, it has to conform to all the regulations and taxes of many jurisdictions. What’s more, enforcement agencies are not under an obligation to educate or inform a business about what it has to do to comply with the laws. The obligation rests on the business. It has to inquire about what laws affect it and how to comply with them.
The Real Challenge
Although it requires a considerable amount of effort to figure out the many levels of government regulations and taxes that are applicable, subject matter experts, attorneys and accountants, as well as public information departments in the government agencies, can help sort things out. However, the real challenge a business faces is keeping track of all their numbers throughout the year to ensure accurate reporting. Unless they have a rigorous process to track their fluctuating finances, it’s only too easy to unintentionally fail to
comply with government regulations and taxes.
One way to limit human error is to use a comprehensive software suite to keep track of the most relevant metrics. Human error can creep up in a number of subtle ways. It might occur due to changes in staffing. It might occur due to changes in how the databases are maintained. It might even occur because shortage of time or staff has resulted in a huge backlog of unsorted data. Fortunately, a robust application like Asure Software can do much of the work necessary to comply with government regulations and taxes because this software offers an HCM platform to collect data on payroll tax performance and management data analytics.
Hiring Employees
While some businesses work well with the outsourcing model, it is not practical for other types of businesses. Here are some of the regulations and taxes that affect a business with employees, as well as common obligations:
- Licensing and registration of the business name
- Workers compensation
- Unemployment compensation
- Permission to do business in a form that is not a sole proprietorship
- Collection of sales taxes
- Withholding of employees’ wages
Regulations That Affect Your Business
Here are some regulations a business has to consider based on its type and scope:
- Health and safety regulations
In order to ensure the health and safety of its employees and customers, a business has to comply with the regulations established by The Occupational Safety and Health Administration (OSHA).
- Disability regulations
The enactment of the Americans with Disabilities Act (ADA) affects many businesses. It affects hiring practices and customer accommodations.
- Professional service regulations
In order to provide a professional service, there are specific licensing requirements required for people who work as engineers, accountants, architects, lawyers, and doctors.
- Product regulations
Similarly, there are specific requirements for certain types of businesses. This might include health permits and periodic inspections. For instance, pharmaceutical manufacturers have to go through a long and expensive approval process before they can sell their products. In addition, there are regulations on their customers. Some goods cannot be provided to certain customers because of restrictions based on their age, health, proficiency or some other criteria. For instance, a customer might be a minor, might have some counter-indicative health conditions that prevent them from receiving a certain medication, or they may not have any proficiency with firearms (they don’t have a permit to buy guns or ammunition.)
- Land use regulations
There are numerous regulations that a business has to comply with when it comes to land use. Different cities, towns, and counties have different zoning regulations for high-rise office buildings, strip malls, manufacturing plants, etc.
- Building codes regulations
A business usually has to apply for a local license for its building. Building code officials want to know if the building is safe while the fire department wants to know if there are any materials that could cause a fire or chemical spill.
- Taxation regulations
The IRS wants to know about the nature and scope of a business. Once a business hires employees, it must file a form SS-4. This then sets up the structure through which a business understands the taxes owed and when they are due. Business owners can now identify their business through an Employer’s Identification Number (EIN). This must be used in all communications with the government agency because the IRS uses this to identify the business, not its name. Finally, a business with employees has to withhold employee earnings and their share as well and deposit these funds in special accounts in designated banking systems.
As an entrepreneur starting a business is not just having a good business plan and adequate funding, you must also understand all the intricacies involved in meeting government regulations and taxes. This is something an entrepreneur has to look into before they start their business to avoid setbacks.
Staff Writer; Ronnie Hicks