Obama 2011 Budget - Potential Impacts for Employers and PEOs

Commentary from StaffMarket Services - February 2010

Obamas Budget Proposal for 2011 contains major items for employers and PEOs. If the 2011 budget gets approved as proposed, PEOs will expand their business services to assist business owners with significant changes to their employment and accounting practices. Employer related subjects will include the following areas.

Classification of Independent Contractors
Plans include requiring employers to withhold taxes for 1099 service providers if requested to do so by the provider.

Tax Credits for Small Employers
Provisions to allow tax credits for new hires and employers who increase wages could be a challenge to determine and administer.

Employee Leasing
Federal legislation recognizes employee leasing and its role as a service provider to businesses.

Automatic IRA Enrollment for Employees
Automatic IRA enrollment and payroll deduction at an employee's request creates a new administrative burden for employers.

Expanding Saver's Credit for Employees
The Saver's Credit may be easier to administer for business and PEOs.

Each of these subjects if enacted could require significant administrative changes for businesses operating in the USA. Business managers should be aware of potential regulatory impacts an anticipate how their company will demonstrate compliance.

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