Business Management

Relevant Government Regulations Small Business Owners Should Know

Last updated on April 21, 2021

Over the years, government regulations in business have tightened, and it’s become increasingly crucial that small business owners understand how these laws affect their operations. The realm of government regulations is far-reaching and can include federal, state, and even local statutes. These may include how businesses report income, pay taxes, dispose of waste or handle materials — the list can go on and on.

It’s no surprise that tackling every government regulation would be nearly impossible. In fact, just taking a quick glance can leave you with a mind-splitting headache. Regardless, if you’re just starting a business or you’re a seasoned veteran — it’s important to get a general lay of the land to safeguard your company and put you in a position to succeed.

We recommend digging deeper and further into your specific industry and location to better understand government regulations that could affect your business. For now, we’re going to cover the basics here to get you started.

Government Regulations to Get Your Feet Wet

As mentioned, the wide world of government regulations can be intimidating. With that being said, getting your feet wet and gaining good footing with the foundations can set you and your business up for navigating more complex regulations.

Now, not every one of these regulations will pertain to your business, while others may be incredibly important to your industry. However, it’s important to remain compliant with those on this list. Compliance with government regulations is one of the many reasons why you need a business lawyer. They will help you navigate the complexities and dynamic statutes surrounding your industry so that you won’t have to worry about problems down the road.

Tax Codes & Regulations

When most entrepreneurs and small business owners think about government regulations, taxes are always top of mind. There’s a lot that goes into tax codes and regulations, including questions such as:

  • Which business taxes should I pay?
  • When’s the best time to pay my business taxes?
  • How do I set up a business account for future taxes

Uncle Sam won’t forget about tax codes, which means you can’t either. Every single registered business within the U.S. must pay federal taxes. Additionally, most companies will have to pay state taxes (depending on the state). Small business tax rates are on the rise, which means you’ll have to prepare in order to achieve your goals. Here are some planning tips for small business tax increases.

Now, you might be wondering what type of taxes you’ll need to pay for your business. Well, this all depends on the formation of your business. We’ve covered this in-depth, so if you’re curious, check out our tax rate breakdown.

You’ll most likely run into these taxes as a small business owner:

  1. Income tax
  2. Estimated tax
  3. Employment tax
  4. Excise tax
  5. Sales tax

Employment and Labor Regulations

Employment and labor laws protect workers and independent contractors. For small business owners, these are incredibly important and should be complied with at all times. While there are dozens of employment and labor laws, here are some of the most common that are likely to affect your company.

Wages & hours fall under the Fair Labor Standard Act (FLSA), which develops standards for wages and overtime pay guidelines. This is the entity that safeguards federal minimum wage and overtime pay. You can be certain that at least some of your employees will be familiar with these regulations, which means you should be as well.

Equal opportunity employment is for any and all businesses that house at least 15 employees. The Equal Employment Opportunity Commission (EEOC) has certain guidelines for hiring practices that protect those of all genders, races, religions, ages, disabilities, and other protected identities.

Safety in the workplace is also highly regulated by OSHA. This organization develops and enacts inspections, investigations, and reports to dictate whether a business provides its employees with a safe workplace.

Medical leave and family leave pertain to somewhat larger organizations (those with 50 or more employees). This includes 12 weeks of job-protected unpaid leave for childbirth, adoption, serious illness, or family illness.

Shared and visible posters aren’t necessarily regulations in of themselves, but they are a part of other regulatory statutes. These may include hand-washing reminders, OSHA posters, certifications, and a wide range of other displays to stay compliant with regulations.

Additionally, if your business has union employees, you may have to complete certain reports or communicate with union members differently.

Marketing & Advertising

Marketing plays a crucial role in your business, helping you reach new customers and retain existing ones. However, there are regulations that stipulate the claims certain industries can make, along with guidelines forbidding deceptive claims.

To remain compliant, follow labeling laws, especially with ingredients and chemicals. Similarly, using customer phone numbers or email addresses in your marketing efforts is also regulated. If you’re wondering what claims you can make or what type of advertising is compliant, we recommend speaking with a business lawyer. A business lawyer can do a lot for your business, helping safeguard your company from possible liabilities.

Privacy and Cyber-Security

Data and personal information have become lucrative currencies for businesses, but the same can be said for hackers. For this very reason, regulations and rules have are in place to protect employer and customer data.

Whether it’s social security numbers, addresses, credit card numbers, banking information, personal history, health conditions, and so on — sensitive information is protected by law. One such regulatory force is HIPAA, which protects health data from being released without patient or guardian permissions.

Data breaches can be costly, so make sure to know your responsibilities when it comes to employee and customer information to stay protected from fines and possible legal actions.

Environmental Guidelines

While these guidelines certainly don’t pertain to every business, there are countless companies that deal with high volumes of waste, make organic claims, or state that their business is eco-friendly.

A great resource for knowing whether or not your business falls into these guidelines is the EPA Small Business Gateway.

Insurance

From the moment you make your first hire, you are required to purchase workers’ compensation insurance. In 49-50 states (excluding Texas), you must have this insurance to remain compliant as a business.

It will protect you and your employees if there is an unfortunate accident while at work. This will help with their medical care and compensation, and the insurance company will pay the costs of lawsuits that may ensue.

Approaching Government Regulations the Right Way

As a business owner, it can be overwhelming to see how many government regulations impact your company. On one side of the coin, many owners are just fine with the compliance and guideline standards. However, the other side of the coin is steeped with additional steps, costs, and ever-changing regulations that seem like a nightmare to keep up with.

Regardless of how you feel about government regulations for your small business, you must remain compliant to protect your company and livelihood. If you’re unsure, check with the SBA, talk to fellow business owners in your industry, and continue researching to ensure that you are up to par.

* All loans made by either WebBank, an FDIC-insured Utah industrial bank, or Bank of the Internet Federal Bank, an FDIC-insured federally chartered thrift located in California. In connection with the loans, the Banks' underwriting conditions and terms apply.