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2018 midterm elections are over – what small businesses can expect next

(BUSINESS NEWS) Small businesses are impacted by political uncertainty, and knowing what’s coming can help strengthen your 2019 plans.

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small businesses post-midterms

Now that the midterm elections are officially in the rearview mirror and the dust has settled, there’s a lot to unpack for small business. There were plenty of ups and downs this election cycle.

Write-in votes, runoffs, voter roll purges, and historic turnout on both sides. With California finally certifying their last ballots, we can now move onto the next chapter: what happens now?

The Democrats gained several seats in the House, retaking their majority status there, and picked up a few governorships, too. But a few Senate seats flipped red, as well. The landscape of America’s identity is changing, and there are many new facets to what it means to be a part of this country.

But, what do all of these changes in the social and economic fabric mean for small business? Well, that’s an interesting question. There’s a lot to like, but a few things to groan at, too. I’ll do my best to lay everything out for you to make your own assumptions on how it’ll affect your business.

What will this Congress’ policy look like (AKA The Big Picture Stuff)?

The Democratic side of Congress will be progressively minded. A younger, more diverse group has won seats, and they’re focused on changing the status quo. With the Democrats taking power in the House, this severs Republican control and will require a lot more conversations instead of pushing bills through with little pushback.

While there will be a lot of gridlock, there are bright spots, and many pieces of legislation have bipartisan support.

One possibility for legislation to pass is a bipartisan retirement package, which makes it easier for small business owners to offer retirement plans to their employees that won’t break the bank. Congress has already moved on this issue.

The biggest objective, one the Democrats have dreamt about since the early 2000s, is the infrastructure bill. Given the state of the country’s crumbling roads, bridges, and streets that need repair from coast to coast, the left really wants this. If both parties can find common ground on funding this issue, and work with the President to realize it, the bill could put a lot of Americans to work, but also energize many small businesses with long-term projects equalling up to $1 trillion dollars.

Tinkering with another healthcare bill is something the Republicans would like, and McConnell is quoted as saying he’d consider working with the Democrats to improve, not repeal the Affordable Care Act. This would bode well for small medical practices, along with mom and pop pharmacies, considering one of the central tenants of the revision would be a bipartisan plan to lower prescription drug prices. Realistically, though, the issue is probably a stalemate until the next big election swing.

So, what does this all mean for small business owners?

Well, it’s kind of hard to put an exact point on it. One of the biggest takeaways of the midterm results is that one-third of Congress was up for election, and that equates to significant consequences for federal, as well as local, policy.

County, city, and state legislators were all on the ballot, and for a lot of states, things have changed. Some of the rules will change for the better and the worse, but ultimately, small business owners want to know if zoning codes will change, if there will be sin taxes, or if there will be more attempts at taxing soft drinks to help pay for parks. Statewide, there are a few changes in the laws to pay attention to.

When it comes to small businesses, the focus is simple: What’s going on with the economy? What regulations are being put in place or rolled back? How can I generate cash flow?

As of right now, the economy is booming. Small businesses don’t want any kind of change. That doesn’t mean small business owners wouldn’t want any improvements or modifications; they want this party to keep going.

The Republican-held Congress passed a tax bill in 2017, and while some have benefitted from the cuts, some individuals and small businesses haven’t seen the results of those yet, and it’s uncertain if they will. When Democrats take control, the natural inclination is to wonder if taxes will rise to bolster social programs, but as of right now, all signs are pointing to no changes in policy on the federal level — maybe. (Read on for more about that.)

Will the minimum wage increase?

One of the topics that’s bound to come up between parties is the minimum wage. The newly elected members of the House have already scheduled a hearing entitled, “Mandating a $15 Minimum Wage: Consequences for Workers and Small Businesses.”

Because the issue is divided across party lines, the issue could get tied up in party politics, but there’s hope for low wage workers – both Arkansas and Missouri, two red states both voted to raise their minimum wages by 2021 in Arkansas and 2023 in Missouri, respectively. If you’re in a state that’s talked about raising minimum wage recently, you might want to start crunching numbers to plan and prepare down the line.

Let’s get back to the tax cut. Will there be any changes to the 2017 bill?

Before the midterms, President Trump promised a middle-class tax cut (not exactly what happened) but both sides could come together on it in the future. The President has said on more than one occasion that the cut is one of his top priorities, but getting the Democrats to work with him on that will be nothing short of a challenge.

The 2018 tax bill included large cuts for corporations, and now Democrats are poised to oppose any kind of cuts to the wealthy going forward. But, the President has said he’s open to working with House Speaker Nancy Pelosi to cut middle-class taxes, even if it means raising the corporate tax rate, which is set at 21%.

“I would absolutely pursue something even if that means some adjustment to make it possible,” Trump said at a press conference. Although he didn’t say precisely what he’d be willing to bargain with, it’s a nice idea.

Democrats will adhere to a strict pay-as-you-go stance on new measures to avoid adding to any national debt. Trump could find small fixes that he could still claim as a tax cut, which might include raising tax-free contribution levels for retirement plans or supplementing health savings accounts, both moves that have bipartisan support.

What about tariffs and trade?

The US-China trade wars have been dominating the news cycle – when the cycle isn’t rolling with new stories like the customers served on a McDonald’s sign, has a lot of businesses, both big and small standing at attention.

Back in September, China announced $60B in retaliatory tariffs following declared U.S. intentions to attach tariffs to $200B of goods. On the US side, the list of targeted goods included vehicles, tech, medical, industrial machinery, aircraft, and textiles. China targeted U.S. products such as food, beverages, cars, and natural gas.

Small businesses have to keep in mind the ripple effect: while steel or cars might be impacted, consider the side businesses that are included alongside those vehicles, like interiors or paint, for example.

The average small business owner has a fundamental set of concerns, they’re not interested in the US and China battling over steel, but instead, they’re interested in how these conversations and sound clips will affect them in the long run.

Small business owners should be wary of rising costs thanks to these tariffs, possibly evaluating new sources or their pricing.

Think about it, a small business has a few critical concerns:
– Can I get access to capital?
– Will this impede my acquisition of new business?
– Can I get access to new contacts?
– Can I operate in the black?

While these matters seem uncertain right now, there’s hope that Congress will step in to work with the president on new import and export laws to help stabilize the situation. My prediction is that it happens, and we come to a mutually beneficial agreement.

What about small businesses’ relationships with big banks?

This split of power between the houses likely signifies that little will change for banks. The House will push for regulation, while the Senate won’t let anything close hit the ground.

One thing to keep in mind is that Rep. Maxine Waters (D-CA) will likely ascend as the next chair of the House Financial Services Committee, come January. Rep. Waters is a vocal advocate for consumer protection and supports a crackdown on big banks.

Rep. Waters has sat on this committee since 1991 and is a ranking member on five of the panel’s subcommittees. When asked about her current position on regulations regarding small business, she said:

“I am committed to ensuring that hard working Americans and our nation’s small businesses have opportunities to thrive, expanding and supporting affordable housing opportunities for our nation’s families, making sure that the safeguards are in place to prevent another financial crisis, protecting consumers and investors from bad actors and conducting appropriate oversight of the Administration and the regulatory agencies under the Committee’s jurisdiction.”

She continued, “I have always maintained an open-door policy, to hear the priorities and concerns of all stakeholders, including representatives of the financial services industry, as well as advocates,” she added. “I look forward to continuing to work with Members on both sides of the aisle on sensible solutions to benefit hardworking Americans and strengthen our nation’s economy.”

While it sounds like Rep. Waters has a lot to aim for as the ranking member on the committee, it’s likely that no new legislation will pass unless both sides agree it’s a slam dunk for America.

There’s good news out of the House Committee on Small Business.

Reps. Doug Collins (R-GA) and Tom Marino (R-PA) introduced the bipartisan H.R. 7190, the Small Business Reorganization Act in the House to improve the bankruptcy system for small businesses. The bill, cosponsored by U.S. Rep. David Cicilline (D-RI), would amend Chapter 11 bankruptcies. A similar bill was introduced by U.S. Sen. Chuck Grassley (R-IA) and cosponsored by U.S. Sen. Sheldon Whitehouse (D-RI) in the Senate.

“Small businesses are some of the best innovators in our local economies, and this bill would bring much-needed improvements to the bankruptcy code so that owner-operated businesses can recover from financial hardship and continue creating jobs,” said Rep. Collins.

Rep. Marino added, “By reducing unnecessary procedural burdens, enhancing oversight, and increasing the debtors’ ability to negotiate, we will ensure quick and successful reorganization and provide small business the ability to restructure in a way that meets their needs.”

Considering the original laws and codes were written for large companies, the reinvention of Chapter 11 would dramatically change how small businesses are affected by bankruptcy. This legislation would reduce the red tape around bankruptcy. Key provisions would increase small business debtors’ ability to negotiate reorganization while retaining business control and reducing procedural burdens and costs.

So, what’s my big prediction?

If there’s any significant takeaway in regards to small business, it’s that they’re resilient. There’s a significant wave of optimism right now. Small business confidence is high, and the markets are reflecting that.

Right now, there are fantastic things happening to both Wall Street and Main Street, alike. With the new Congress taking session in January, it’s likely that one of two scenarios will take place: the houses work with President Trump to push forward legislation that helps the country soar to new heights or (probably a little more predictable) a lame duck session that will remain gridlocked thanks to partisan politics.

If that’s the case, don’t sweat it. Buyer sentiment is high, and new businesses are opening up every day. Going into 2019 and a new Congress, I’d say a whole lot of no news is good news for small business.

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Robert Dean is a writer at ScaleFactor and The American Genius. He is a writer, journalist, and cynic. His most recent novel, The Red Seven is in stores. Currently, he’s working on his newest novel, Tragedy Wish Me Luck. He also likes ice cream and panda bears. He currently lives in Austin. Stalk him on Twitter.

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Overtime laws could soon be getting an update

(BUSINESS NEWS) There are some potential changes coming to overtime laws – employers must know how to be complaint, and employees need to make sure they’re getting paid fairly.

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An important new overtime rule is being proposed that could change overtime for the better. With unemployment at an all-time low, this change could affect at least one million workers.

Overtime is determined by the Fair Labor Standards Act (FLSA). If an employer allows for overtime work, then overtime pay must be paid to employees. Overtime pay is typically one and a half times the hourly rate. Overtime is considered traditionally as any time worked over 40 hours in a work week. Employees are classified as either exempt (also called salaried, meaning no overtime eligibility) or unexempt (allowing for overtime).

This is determined by whether you earn a salary or wage at or above a certain threshold. Currently, the exempt threshold is $23,660 annually. If you make below that amount, you are eligible for and required to be paid overtime if it is worked. Many employers restrict positions from working overtime in order to avoid paying it so this new law won’t change much for them. For more specific details about the rules, see this cheatsheet.

The overtime rule proposal, which has been published and taking comments since 2016, would increase the overtime threshold to $35,308 per year. This would make as many as 1 million more workers potentially eligible for overtime under the law. The overtime law is an important one to protect worker’s rights and prevent abusive work practices by employers. The last change was made in 2004. Another proposed change is for periodic reviews of the overtime law. It’s important to note there is no change for firefights, police, paramedics, and nurses as well as some other unionized workers like carpenters and electricians.

The classification of ‘highly compensated’ employees would change from $100,000 to $147,414.

The new rule, if it becomes law, will require more employees to be paid overtime. This is especially important for those employees who are required to work on holidays. Currently, law makers are working to finalize the rule for approval.

An official publication has been made in the Federal Register and closes for public comments on May 21, 2019. Submit your comment before the deadline is up.

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How to conduct a proper informational interview

(CAREER) Informational interviews comprise a technique in which you ask an employer or current employee to explain the details of their job to you. Try doing this before you transition into your next occupation!

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At some point in your career, you may ask for someone’s time to do an informational interview — a process in which a job-seeker asks questions about a field, company, or position in hopes of receiving information which will inform both their decision to go into the field and their responses to the specific job’s actual interview. Since the power dynamic in an informational interview can be confusing, here are a few tips on how to conduct one. Not how to obtain one, but how to conduct one once both parties agree to connect.

The process of an informational interview typically starts with finding a person who works in your desired field (and/or location if you have a specific company in mind) and setting up a time during which you can ask them a few questions about things like their job responsibilities, salary, prerequisites, and so on. Once you’ve set up a time to meet in person (or via Skype or phone), you can proceed with putting together a list of questions.

Naturally, you should understand the circumstances under which asking for an informational interview is appropriate before requesting one. Your goal in an informational review should be to ask questions and listen to the answers, NOT pitch yourself as a potential hire. Ever. Nobody appreciates having their time wasted, and playing on your contact’s generosity as a way into their company is a sure way for your name to end up on their blacklist.

Once you’ve set up an informational interview, you should start the conversation by asking your contact what their typical day is like. This is doubly effective: your contact will most likely welcome the opportunity to discuss their daily goings-on, and you’ll be privy to an inside glance at their perspective on things like job responsibilities, daily activities, and other positive aspects of their position.

They’ll also probably detail some drawbacks to the position — things which usually aren’t explained in job postings — so you’ll have the opportunity to make a well-informed decision vis-à-vis the rigors of the job before diving head-first into the hiring process.

After your contact finishes walking you through their day, you can begin asking specific questions. However, unless they’ve been unusually brief in their description of their duties, your best course of action is probably to ask them follow-up questions about things they’ve already mentioned rather than asking targeted questions you wrote without context. This will both indicate that you were listening and allow them to expand upon information they’ve already explained, ensuring you’ll receive well-rounded responses.

You should save the most specific questions (e.g., the most easily answered ones) for the end of the interview. For example, if you want to know what a typical salary for someone in your contact’s position is or you’re wondering about vacation time, ask after you’ve wrapped up the bulk of the interview. This will prevent you from wasting the initial moments of the interview with technical content, and it may also keep the contact from assuming a strictly material motive on your part. And be willing to ask “what does someone with your job title typically earn in [city]?” instead of their specific take-home salary which might not be reflective of the norm (plus, it’s rude, and akin to asking someone their weight).

This is also a good time to ask for general advice regarding breaking into the field, though you may want to avoid this step if you feel like your contact isn’t comfortable discussing such a topic or if you’re intending to apply as someone with experience.

Of course, you won’t always be able to meet with your preferred contact directly, especially if they work in a dynamic field (e.g., emergency services) or have a security clearance which negates their ability to answer the bulk of your questions. If this happens, you have a couple of back-up options:

1. Send an email with a list of questions to the contact, or send them your phone number with a wide-open calling schedule. This is useful if your contact has a random or on-call schedule.

2. Ask your contact if there is someone else you could connect with (it could even be their assistant).

3. Speak to the company’s HR branch to see if you can request a company-specific job requirement print-out or link. These will usually be more particular than the industry requirements. But don’t ask for something you can find yourself on the company’s Careers page online.

Nothing beats an in-person interview over a cup of coffee, but — again — wasting someone’s time isn’t a good way to receive useful information about the position in which you’re interested.

Before transitioning to your next position or career field, consider conducting an informational interview. You’ll be amazed at the amount of insider information you can glean from simply listening to someone discuss their day in detail.

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The sad truths you missed about the US Women’s Soccer Team lawsuit

(NEWS) The US Women’s Soccer team dominated headlines by suing for equal pay, but there was so much more to the lawsuit that could have a ripple effect in the business world.

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womens soccer lawsuit

Recently, on International Women’s Day, the United States Women’s Soccer Team (USWNT) filed a lawsuit against the US Soccer Federation. The timing of the suit is not only a sign of the team continuing their decades long fight against the organization (only three months before they are set to defend their World Cup title in France), but a recognition of the symbol that they have become in the larger battle that women and other minorities are waging in order to be given the same resources as the men leading in their fields.

It should go without saying that the women’s soccer team is unparalleled in its athletic success: over the past twenty years they have won three World Cup titles and four Olympic gold medals. These players, as ESPN acknowledges, are among the most accomplished and best known women athletes in the world.

Their counterpart, the Men’s National Soccer Team, leaves much to be desired (they failed to qualify for last year’s World Cup, for example) yet they consistently receive much more support from the US Soccer Federation.

Although the pay disparity between the USWNT and the male soccer team is certainly stark, the “gains” that the women athletes are fighting for go beyond monetary compensation.

According to Mashable, “This [suit] includes how women frequently play on a dangerous artificial surfaces when the men do not, fly commercial when the men travel by more convenient, comfortable charter flights, and the alleged allocation of fewer resources to promote women’s games compared to men’s.”

As if being the best players in your sport in the world and having to share hotel rooms after getting torn apart by the seams astroturf and receiving less-than-world-class medical care wouldn’t be infuriating enough, it’s truly this final point that highlights the glaring mistreatment of the USWNT.

Without support from the US Soccer Federation, not only in the form of payment but in promotion of their games and general good-will toward their players, the USWNT will not be able to grow their following so that they can establish a consistent revenue near what the men’s team attracts. This “lack” of revenue continues to create the chicken/egg excuse that the Federation has for not propping up the USWNT like they deserve.

It’s simply the opposite of “sportsmanship” for the US Soccer Federation to use these players’ love of playing the game (that, again, they are the best in the world at) and their country as a way to gaslight them into playing for less.

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