NSBA | Search our Site

#CTA needs a delay - today. On Monday, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) unveiled their Small Entity Compliance Guide relative to the Corporate Transparency Act (CTA). Also referred to as “Beneficial Ownership Reporting,” the CTA is set to go into effect in a matter of months and will require ONLY businesses with fewer than 20 employees to disclose owners’ information to FinCEN. The compliance guide from FinCEN is intended to help businesses determine if they are required to report their beneficial ownership information to FinCEN, however the base regulations are so painfully vague, compliance will be a nightmare for most small businesses. While the intent of the law was to stem money laundering, the CTA is not only bad policy, it is unconstitutional. Failure of a small business to comply—intentional or not—could result in up to $10,000 in fines and up to two years in prison. NSBA has filed a lawsuit against Treasury over the implementing regulations of the CTA, however an act of Congress to repeal the law is the best way to ensure this bad policy doesn’t see the light of day. Please click here to view the compliance guide.

Tune in Friday to catch Todd speaking on behalf of NSBA and the nation’s entire small-business community! This week, NSBA President and CEO Todd McCracken is participating in a panel on 21st Century Labor Policies to Promote Worker Freedom, Opportunity, and Entrepreneurship. Beginning Friday, Sept. 22 at 9:30 a.m., tune in for Session I of the Heritage Foundation’s discussion on How Economics and Government Policies Affect the Workplace. Additional panels include focused sessions, “Why Protecting Independence Is Vital for Opportunities and Flexibility,” and “The Role of Unions in the 21st Century.” Click here for additional speaker details, and tune in to catch Todd speaking on behalf of the small-business community this Friday!

Capitol Hill is cloudy with a chance of Shutdown for the foreseeable future. As of late Tuesday, House Speaker Kevin McCarthy (R-Calif.) does not have the votes to pass—or even consider—a continuing resolution (CR) to fund the government in the House. While at the start of the day, there had been plans for a procedural vote on the CR deal brokered between the moderate Main Street and conservative Freedom Caucuses, the vote was quickly pulled off the calendar after a Republican Conference meeting on the issue. Additionally, a similar procedural vote to allow consideration of a Defense Appropriation bill failed, losing five Republicans. This is concerning, as this Defense vote was viewed by many as a bellwether for Republican leadership’s ability to corral support for the broader CR, given that the Defense bill was an easier vote for conservatives on the substance. The removal of the vote from the calendar is an admission from the Speaker’s camp that he does not have the support he needs, but it also buys him vital time to modify the bill and whip a few crucial votes. The early word is that Speaker McCarthy has instructed his leads on the CR to redraft the measure to win more conservative support, meaning that he is giving ground to the House Freedom Caucus, who demanded strong policy riders (elements of a funding bill that act to alter Federal policy without going through traditional channels) as a precondition for support. Speaker McCarthy’s move is liable to weaken his standing in Congress, though it is unlikely to change the outcome of the funding battle. The Senate under Democratic control is all but guaranteed to turn its nose at any Republican-led CR, and instead proceed on an alternative track, likely foisting its own “clean” (modification and policy-rider free) CR back on the lower chamber, daring them to oppose it. Had the Speaker won today’s vote, he might have been able to seek particular concessions in his negotiations with Senate leaders, but the Freedom Caucus’ rebellion has likely cost them that option. Currently, the consensus in Washington is that we are most likely headed to a shutdown, as the Senate refuses to consider Republican-driven bills, and a vocal minority in the House holds even conservative-led bills hostage with its newfound leverage. Millions of small businesses do business directly with the federal government and a shutdown would mean they won’t get paid—regardless of what services and goods they’ve already supplied. Furthermore, government shutdowns have historically succeeded in only two things: weakening the U.S. economy and confidence in our elected officials. “Not only will millions of small-business federal contractors and subcontractors will be impacted by contract delays, stoppages and cancellations, the trickle-down effects cannot be understated: every business in their supply chain, their employees and their families WILL feel the pinch of a government shutdown – they always do,” stated NSBA President and CEO Todd McCracken. He went on to comment that, “Small-business programs, such as those under the U.S. Small Business Administration (SBA), particularly their lending programs, will begin to experience long delays due to the absence of staff and inevitable backlog of approvals or even forcing the smallest of businesses to spend money they don’t have on accountants to provide the assistance typically provided by the IRS. A small handful of elected officials are manufacturing a crisis out of partisan discord with a focus solely on reelection. This is unfair, unreasonable and unacceptable.” Stay tuned to NSBA for the latest updates on the potential government shutdown.

UPDATE: Congrats to our winner Olalah Njenga! Thank you to all of the nominees and all you do for small business! FOR IMMEDIATE RELEASE Aug. 30, 2023 Contact: Molly Day 202-552-2904 mday@nsba.biz Washington, D.C. — NSBA today announced the finalists for the 2023 Lewis Shattuck Small Business Advocate of the Year Award. The award winner will be announced during NSBA’s Annual Advocate of the Year Award Luncheon on Wednesday, Sept. 13, which is the kick-off event for the NSBA Washington Presentation on Sept. 13-14. “NSBA has an amazing group of award winners this year who are exemplary advocates for small businesses,” stated NSBA President and CEO Todd McCracken. “Part of what makes our community of small businesses so special is the belief in and dedication to small business as part of the American dream. I am honored to recognize our 2023 advocate award winners and on behalf of small-business owners everywhere, I thank them for their tireless efforts.” NSBA is honoring the following small-business owners for their excellence in advocating on small-business issues: Hope Blankenship, To the Rescue Bookkeeping, LLC, in Diberville, Mississippi. Sheletta Brundidge, ShelettaMakesMeLaugh, LLC in Cottage Grove, Minnesota Chyanne Hart, CAAM Logistics in Strasburg, Pennsylvania Martha Hernandez, ESO Ventures in Oakland, California Olalah Njenga, YellowWood Group, LLC in Raleigh, North Carolina Nora Oliver, 10X Nora Oliver, LLC, in Woburn, Massachusetts “The finalists we are recognizing this year have shown tenacity and a real dedication to making small-business ownership easier for us all,” stated NSBA Board Chair Bob Treiber of Boston Engineering. “Running a small business isn’t easy and neither is advocacy, but these honorees make it look that way.” Among the key criteria used in determining award finalists is a commitment to small-business advocacy above and beyond policies that specifically impact their own business or industry, as well as a broad scope of volunteer efforts to advance and improve small business. Celebrating more than 85 years in operation, NSBA is a staunchly nonpartisan organization advocating on behalf of America’s entrepreneurs. NSBA's 65,000 members represent every state and every industry in the U.S., and we are proud to be the nation’s first small-business advocacy organization. Please visit www.nsba.biz or follow us at @NSBAAdvocate. ###

Labor officials estimate these latest overtime changes will affect nearly 4 million employees. Last week, the U.S. Department of Labor (DOL) proposed yet another set of revisions to section 13(a)(1) of the Fair Labor Standards Act (FLSA). RELATED | Independent Contractor Rule Update These latest revisions would entitle millions of workers who are now exempt from overtime requirements to time and a half pay when they work more than 40 hours in a workweek. Additionally, this DOL proposal would raise the salary test from its current $35,568 level to $55,068 as the annual salary threshold. Employees below this new level working more than 40 hours in a workweek will remain eligible for overtime pay. In 2016, under the Obama Administration, the DOL attempted to more than double the minimum threshold, from $23,660 to $47,476. The increase was overturned by a federal judge in Texas just 10 days before it was set to take effect, on the grounds that the DOL exceeded its authority by raising the threshold too high. The ruling also questioned whether the DOL had authority to set any threshold whatsoever. Effective Jan. 1, 2020, the Trump Administration successfully raised the threshold to its current level of $35,568. Currently, the FLSA requires employers to pay employees minimum wage, and there is an overtime requirement for time and a half pay for all hours worked over 40 in a workweek. Under section 13(a)(1) in its current form, there is an exemption for this time and a half pay requirement for employees working in a “bona fide executive, administrative, or professional capacity” (EAP exemption or white-collar employees). To meet this EAP exemption: The employee must be paid a predetermined, fixed salary not subject to reduction; The among of salary paid must meet a minimum specified amount; and The employee’s job duties must primarily involve executive, administrative, or professional duties. The DOL’s latest proposal increases minimum exempt salary levels to $1,059 per week ($55,068/year), which is the 35th percentile of weekly earnings of full-time salaried workers, arguing that the proposed changes will “better define and delimit which employees are employed in a bona fide EAP capacity.” The DOL estimates that 3.4 million currently exempt employees who earn at least the current salary level of $684 per week, but less than the new proposed standard salary level of $1,059 per week, would receive overtime payments in the first year of the proposal’s enactment. In addition, 248,900 employees who are currently exempt under the current standards would be affected by the proposed increase. Beginning Sept. 8, comments on how this proposed change would affect small-business owners opened for 60 days. Submit comments here, and follow NSBA as we track when comments open and the latest from the DOL.

Decisions providing easier paths to unionization are just the beginning. Recently, the administration has been pushing through several policy changes and reports initiated by organized labor. The National Labor Relations Board (NLRB) has issued a ruling in the Cemex case, a final direct rule over so-called ambush elections, and confirmed plans to issue a new rulemaking on its joint employer standard. Additionally, for the first time ever, the U.S. Department of Treasury issued a report on the benefits of unions to the U.S. economy – a publication causing concern for many industry groups, including NSBA. CEMEX Case This recent NLRB decision stems from a case examining whether to reinstate precedented bargaining orders. Ultimately, the NLRB moved away from precedent, opening the door for union card checks over secret ballot elections and making this policy change without input from stakeholders. Under the new standard, when a union claims majority support, an employer has two options: They can voluntarily recognize the union and begin to bargain with them as the exclusive bargaining representative of the unit; or They can file a petition for an election with the NLRB, but they must do so within two weeks. If employers miss the 2-week window, the NLRB can issue a bargaining order requiring the employer to recognize and bargain with the union. Additionally, if the employer files within the 2-week window, but then commits any unfair labor practices against the union or workers between the filing of the petition and the holding of the election, the NLRB can also issue a bargaining order requiring the employer recognize and bargain with the union. Effectively, the NLRB’s decision limits employees’ abilities to vote in a secret ballot election. NSBA has ardently opposed this proposal in the past and will continue to do so. Ambush Elections On Aug 24, the NLRB issued a direct final rule altering the procedures for representation elections. The rule reverses changes made under the Trump administration, which, in turn, had reversed the Obama-era ambush election rule. There are 10 provisions in the final rule, all of which drastically shorten the time between a union filing a petition for election and the holding of that election. Like the Cemex decision, the NLRB issued this additional rulemaking without going through the formal notice-and-comment process, giving stakeholders no opportunity to weigh in with their concerns. NSBA also has historically opposed these kinds of changes and is continuing to push back against this overreach. The NLRB recently confirmed it would issue a new rulemaking on its Joint Employer standard. Department of Treasury Report Treasury released a report at the end of August focused on the “benefits of unions to the U.S. economy,” the report’s key findings are as follows: Middle class workers receive substantial benefits from unionization, including raising wages by 10-15 percent and improving fringe benefits and workplace procedures. The benefits of unionization have spillover effects for nonunion workers, including increased wages and improved workplace safety. Unions create a fairer economy, including by reducing race and gender wage gaps. Unions contribute to economic growth and resilience by reducing inequalities and boosting businesses’ productivity. This is the first such report ever issued by the Treasury Department and was one of the recommendations from the White House Task Force on Worker Organizing and Empowerment. In its press release, Treasury goes on to highlight some of the other task Force recommendations, including prioritizing passage of the PRO Act, appointing NLRB members and a General Counsel “committed to protecting the right of workers to organize,” and increasing NLRB funding. The report fails to account for the significant financial and compliance burden many of these recommendations pose for America’s small businesses. Read the full report, and check back here as NSBA stays checked in with the regulatory bodies producing policy affecting our small-business community.

NSBA supports opportunities of expanding growth for America’s small businesses and exporters. This week, the U.S. Small Business Administration (SBA) announced the dedication of $20 million to new small-business export growth. Funds were awarded in grants to 49 U.S. state and territory international trade agencies as part of the SBA’s State Trade Expansion Program (STEP). STEP works as a federal and state partnership to provide funding directly to small businesses seeking to grow their businesses and the U.S. economy with international trade opportunities. In the last 13 years, STEP has awarded nearly $240 million in grants and direct support to more than 13,000 small businesses for international expansion and export growth. One STEP statistic shows that, for every $1 provided in STEP funding, there is an average yield of $43 in export sales. Aligned with the U.S. Government’s priorities of strengthening the base of small-business exporters and improving global competitiveness on the international level, NSBA is proud to support export opportunities through its Small Business Exporters Association (SBEA). Read more about SBEA and the SBA’s STEP opportunities, including if your state or territory earned a STEP award this year, as well as how to apply for funding opportunities, here.

NSBA has consistently called for a unified federal approach, rather than the development of a patchwork 50-state system we are now seeing develop. NSBA recently joined a number of small-business organizations and Chambers of Commerce in a letter to Congress urging policymakers to avoid adding to the growing patchwork of state privacy laws passed and proposed in recent years. RELATED | NSBA Tracks Patchwork of State Privacy Laws Data privacy has been a huge issue looming before small-business owners with almost nothing in terms of clear, concise national guidelines or directives. A number of states are now developing their own rules governing internet privacy, even though digital information flow doesn’t stop at state lines. For example, consumer privacy laws in California are different than those in New Jersey, and the conflicting, duplicative nature of these requirements carry costly and time-consuming compliance, taking away small-business owners’ time and focus on their operations, employees, and customers. Some analysis suggest initial compliance can run small-business owners around $50,000 for employers with fewer than 20 employees, and compliance costs can be even higher for small enterprises doing business across state lines. Small businesses need clear, uniform guidelines that: target abuses, encourage innovation, and include reasonable flexibility. This is why NSBA has consistently called for a unified federal approach, rather than the development of a patchwork 50-state system. Given how these rules can stymie existing business-customer relationships and prevent new customer growth, NSBA urges its members and the small-business community to tell policymakers to carefully consider the costly impacts of patchwork privacy policies when contemplating privacy action at the federal level. Read the full letter here.

The Credit Card Competition Act would decentralize and permit transaction processing across multiple networks. With only three weeks left until its annual small-business fly-in known as Washington Presentation, NSBA published a new Issue Brief on the Credit Card Competition Act (CCCA). RELATED | NSBA Urges Congress to Act on and Pass the CCCA In addition to publication of this new Issue Brief, recently, NSBA sent a letter to key U.S. Senators urging passage of the CCCA – critical legislation to protect small businesses from increasingly costly credit card processing fees. Specifically, the CCCA would address credit card processing fees (“swipe fees”) and network restrictions that currently benefit the largest banks and corporations at the expense of small and local businesses that can least afford to fight back. The current market lacks meaningful competition and leaves small merchants with few choices and little negotiating power. The CCCA would decentralize processing, permitting transaction processing across multiple networks. With Senate leadership appearing to plan for a vote later this session, NSBA is hopeful that Congress will act on this important legislation soon. Follow NSBA as we track progress of the CCCA in Congress, and read the full letter to the Senate here.

Registration for NVBDC’s Business Matchmaking Conference and Night Out is now open! The National Veteran Business Development Council (NVBDC) is one of NSBA’s newest partners, and a committed supporter to NSBA’s new Veterans’ Network. We are pleased to announce registration for the Annual NVBDC National Veteran Business Matchmaking Conference and Vets Night Out Event is now open! Your company does not need to be NVBDC certified to attend, and you don't want to miss this signature 2-day conference, which facilitates business relationships between National Veteran Business Development Council - NVBDC certified veteran business owners and global corporations. The live conference will be held in Louisville, Ky., on November 8-9, 2023. NVBDC is excited to have Coca-Cola serve as its presenting sponsor and is elated to have Beam Suntory sponsor its legendary Vets Night Out event. Register now by visiting NVBDC’s website: nvbdc.org/events

The public health emergency may have waned, but the DOJ’s work is “far from over.” Last week, the Justice Department (DOJ) announced the launch of two new COVID-19 fraud enforcement task forces out of its U.S. Attorneys’ District Offices in Colorado and New Jersey. Already pursuing more than 700 enforcement actions to combat COVID-19 fraud, the new task forces reportedly intend to initiate federal criminal charges against 371 defendants, collectively representing over $836 million in illegally obtained or stolen funds. This is in addition to an estimated $600 million seized by the DOJ from defendants across the country. Out of the 371 defendants charged by these new fraud enforcement task forces, 119 have already pleaded guilty or were convicted at trial, and over $57 million in court-ordered restitution has been imposed. Acting Director of the DOJ’s COVID-19 Fraud Enforcement division Michael C. Galdo said further that 63 of the defendants had alleged connections to violent crime, including violent gang members accused of using pandemic funds to pay for a murder for hire, and 25 defendants have alleged connections to transnational crime networks. The Paycheck Protection Program (PPP loans) and Economic Injury Disaster Loans (EDIL) were the two programs most abused by those committing COVID-19 fraud. NSBA applauds the DOJ’s commitment to ensuring accountability for the nation’s small-business community. Read its full report here.

Thank you to SBA Administrator Isabella Guzman for taking time to connect with these small-business owners. Last week, NSBA Leadership Council member Christine Hopkins joined a delegation of business and community leaders in welcoming U.S. Small Business Administration (SBA) Administrator Isabella Guzman to Anchorage, Alaska, for the opening of Business Impact NW’s new Veterans Business Outreach Center (VBOC). NSBA Member Christine Hopkins, pictured second from right (blue, patterned dress), with Administrator Guzman, pictured off-center left (black pant suit with red-patterned shirt). The program will provide entrepreneurship development services to servicemembers, veterans, and military spouses throughout Alaska, the state with the most veterans per capita in the Union. Hopkins met with Administrator Guzman in a small-group setting, where she shared her perspectives on small-business challenges like accessing capital. As a military spouse, Hopkins also appreciated the chance to learn about the resources available for military family members in small business. To learn more about NSBA’s efforts to support the military community in small business, please visit nsba.biz/veteransnetwork. Have you had a meeting you’d like to share with us? Email Ian Elsenbach at IElsenbach@nsba.biz or tag us on your social posts!