Isn't That Rich Podcast

Navigating new business laws can be daunting, especially with significant changes on the horizon. Martin Parsons, lawyer and owner of Legal Advocacy Headquarters in Carterville, offers his expertise to help small businesses understand and comply with the new regulations for 2024.

The Importance of Legal Awareness for Small Businesses

Martin's law practice focuses exclusively on helping small businesses and nonprofits. Their unique subscription model makes legal services more approachable and affordable, ensuring businesses can seek help before they actually need it. His approachability and transparency in pricing make Legal Advocacy Headquarters a valuable partner for small businesses navigating the complex legal landscape.

Key Business Law Changes for 2024

1. Minimum Wage Increase

Starting January 1, 2024, Illinois' minimum wage will increase from $13 to $14 an hour, with the tipped wage rising to $8.40. By 2025, these will increase to $15 and $9 respectively. This change is part of a gradual increase plan that businesses have been preparing for over the past few years. While the new minimum wage aims to support workers amid rising living costs, it also presents challenges for small businesses that must adjust their payroll budgets accordingly. Martin emphasized that to remain competitive, businesses might need to consider wages above the minimum.

2. Paid Leave for All Workers Act

This new law requires all Illinois employers, regardless of size, to provide a minimum of 40 hours of paid leave annually. This leave accrues at a rate of 1 hour for every 40 hours worked and can be used for any purpose without the need for documentation. Part-time employees accrue leave at the same rate as full-time employees, ensuring even those working fewer hours benefit from paid leave. Employers must have a written policy outlining how leave can be requested and used, with a minimum increment of 2 hours for taking leave. Martin pointed out the importance of accurate bookkeeping and payroll systems to track leave accrual and usage, minimizing the risk of fines for non-compliance.

3. The Crown Act

Expanding the Illinois Human Rights Act, the Crown Act prohibits discrimination based on hair texture and styles associated with race, including braids, locks, and twists. Originally introduced in schools in 2021, this law now applies to employment, housing, financial transactions, and public accommodations. Martin highlighted the significance of this act in promoting inclusivity and respect for cultural expressions in the workplace. Employers must update their anti-discrimination policies to reflect these new protections.

4. Secure Choice Retirement Program

Employers with five or more employees must either provide a retirement plan or enroll their employees in Illinois’ Secure Choice program, which does not require employer contributions but mandates payroll deductions for employee contributions. This program aims to enhance retirement savings for workers, especially those in smaller businesses that may not offer retirement plans. Martin explained that while this law imposes additional administrative responsibilities on employers, it also provides an opportunity to offer valuable benefits that can improve employee retention and satisfaction.

5. Beneficial Ownership Information Reporting Act

Effective January 1, 2024, all domestic corporations and LLCs must file information on their beneficial owners with the Financial Crimes Enforcement Network (FinCen). This does not apply to nonprofits and certain financial institutions. The act aims to enhance transparency and combat illicit activities such as money laundering and fraud. Martin noted that while this requirement adds another layer of reporting, it is crucial for maintaining legal compliance and fostering a transparent business environment. Businesses should prepare to register and disclose their ownership information promptly to avoid potential penalties.

6. Pay Transparency Act (Effective 2025)

Starting in 2025, businesses with 15 or more employees must disclose pay ranges in job postings. This move aims to foster transparency and fairness in the hiring process. By providing clear information on salary expectations, employers can attract better-suited candidates and reduce time spent on recruitment. Martin mentioned that this law aligns with the growing demand for pay equity and transparency in the workforce, particularly among younger generations. Employers should start preparing now by evaluating their compensation structures and ensuring they can comply with the new requirements.

Why These Changes Matter

These laws emphasize the importance of compliance and transparency in business operations. Non-compliance can result in hefty fines and legal issues. Employers should consider partnering with legal experts like Martin to ensure they understand and adhere to these new requirements. For example, failing to adhere to the Paid Leave for All Workers Act can result in fines starting at $2,500 per infraction, underscoring the need for meticulous record-keeping and policy implementation.

Practical Steps for Compliance

1. Update Employee Handbooks: Ensure all new policies and legal requirements are included in your employee handbook. Have employees sign an acknowledgment form to confirm they have read and understood the policies.
2. Implement Robust Payroll Systems: Use payroll software that can accurately track hours worked and leave accrued to comply with the Paid Leave for All Workers Act.
3. Seek Legal Counsel: Regularly consult with a legal expert to stay informed about new laws and ensure your business practices align with current legal standards.
4. Train HR Staff: Provide training for HR personnel on new legal requirements and best practices for compliance to minimize the risk of non-compliance.
5. Communicate with Employees: Clearly communicate any changes in policies and legal requirements to employees to ensure they are aware of their rights and responsibilities.

Martin emphasizes the importance of staying informed and proactive about legal changes. Small business owners should either dedicate time to research or seek help from chambers of commerce or legal counsel to navigate these changes effectively. Ignorance of the law is not an excuse, and proactive measures can save businesses from costly penalties and legal disputes.

Connect with Martin Parsons

For legal assistance, visit Legal Advocacy Headquarters.