Update | This is a breaking story and has been updated to reflect the changes. Most recent change: 4.9.2020

A Trump administration request for quick approval of $250 billion to replenish a new loan program for distressed small businesses stalled in the Senate on Thursday (4.9) after Republicans and Democrats clashed over what should be included, according to NYTimes.com

With Congress in recess and lawmakers scattered around the country, Senator Mitch McConnell, Republican of Kentucky and the majority leader, attempted to push through the small business loan funding during a procedural session, a maneuver that would have required all senators to agree.

But Democrats objected, proposing to double the size of the emergency relief bill by adding $100 billion for hospitals and $150 billion for state and local governments.

Read earlier story on NYTimes.com | With Demand Soaring, Congress Weighs Adding $250 Billion in Small-Business Aid

Google announced last week (September 12, 2019) that it has updated its search-rater guidelines to better-recognize original reporting in both its news and general search results. “This means readers interested in the latest news can find the story that started it all, and publishers can benefit from having their original reporting more widely seen,” said Richard Gingras, VP, Google News. However, it may also mean that Google will be searching less for a small business website that doesn’t carry news.

Why small business owners should care

If you produce news content, it might not just be enough to do a “value-added” type of reporting. “You may need to work harder to be the original news source of the topic to get real traction and traffic from Google,” says Schwartz.

Original reporting will not only rank better in Google Search but soon will also rank better in Google News, including Google Discover, according to Barry Schwartz, news editor of Search Engine Land. According to Schwartz, original reporting will reward news results both higher and for a longer longer period of time

In addition to recognizing individual instances of original reporting at the page level, Google has also asked its raters to consider the publisher’s overall reputation for original reporting.

Gingras said Google Search and Google News are more and more using the same algorithms and concepts for rankings. So while the search quality raters guidelines were originally specific to just web search, it has now been updated more and more to also rate the more news-related search results.

How does Google determine original reporting?

Schwartz believes that Google is not just looking at the first page and earliest timestamp of a page for a specific topic — it is probably looking for news sources that are more well-known for original reporting.

While much has been reported about the economic impact of the partial federal shutdown on federal workers, coverage of the impact on large and small businesses that are federal contractors has been limited to anecdotal examples. Why? Such statistics are hard to gather due to the shutdown.*

The partial federal shutdown, now in a record fourth week, means missed paychecks for more than 800,000 government workers. But it also is having a similar, negative impact on workers in private companies, large and small, that do business with affected agencies.

The larger federal contracts go to the larger contractors who can weather the shutdown storm. However, shutdowns may be creating more stresses at smaller companies.

66% | About two-thirds of contracts with federal agencies affected by the shutdown are less than $10,000 a week

According to a limited analysis* of government contractor data by The Washington Post, there are 10,000 companies that hold contracts with federal agencies affected by the government shutdown.

$200 million | The estimated weekly value of the work by federal contractors impacted by the partial shutdown.

Quote from the Washington Post

“No one knows how many workers are affected, and overall estimates of total federal contract workers range from hundreds of thousands to millions. It’s also unknown how many have had to stop work, but company and industry officials say financial pressures on contractors are building.”

What do federal contractors do?

Federal government contractors are the source for nearly every item and service the government purchases, including vehicles, books, and furniture.

Contractor-supplied services can involve supporting government offices and programs, from clerical and keyboarding work to budget analysis and specialized studies. Other contracts for services range from housekeeping and security for government-owned properties to research and development for space exploration.

Top five services and goods contracted by weekly dollar amount

*(Via Washington Post: Estimates for contract amounts with federal agencies affected by the shutdown are based on analysis of contracting data from USAspending.gov. The data is incomplete and not being updated during shut down.)

Chart: WashingtonPost Photograph: GettyImages

Update (1.18.2019): Updated to clarify that the number 10,000 refers to the number of companies that have contracts with the federal government. It is not he number of employees at those companies.

The NFIB Small Business Optimism Index reached 108.8 in August, a new record in the survey’s 45-year history. The previous high was July 1983 when the index reached 108. According to NFIB Chief Economist William C. Dunkelberg, “the record-breaking figure was driven by small business owners executing on the plans they’ve put in place due to dramatic changes in the nation’s economic policy.”

August index highlights

• Job creation plans and unfilled job openings both set new records.
• The percentage of small business owners saying it is a good time to expand tied the May 2018 all-time high.
• Inventory investment plans were the strongest since 2005 and capital spending plans the highest since 2007.

Labor | After posting significant gains in employment in July, the velocity of job creation slowed some among small firms in August. Still, the survey hit a 45-year record in job openings

3.2 workers | Average need of workers per firm
62% | Percentage of surveyed businesses that reported hiring or trying to hire
55 % | Percentage of owners reporting few or no qualified applicants for the positions they were trying to fill.
25% |  Record high percentage of owners citing the difficulty of finding qualified workers as their Single Most Important Business Problem
38% | Owners reported job openings they could not fill
17% | Percentage of owners using temporary workers (up 4 points). CAPITAL SPENDING

Sales 

10% | Reported higher nominal sales in the past three months compared to the prior three months
35%| Percentage of owners in construction, manufacturing, the wholesale trades and transportation who reported sales volumes gains.

Compensation and Earnings |  Reports of higher worker compensation remained unchanged at a net 32 percent among all firms (3 points shy of May’s record reading of 35 percent)

Credit | Only 5 percent of owners reported that all their borrowing needs were not satisfied, unchanged and just 1 point above the record low. “In short, credit availability and cost are not issues and haven’t been for many years, even with the Federal Reserve raising interest rates,” said Dunkleberg.

33% | Reported all credit needs were met (up 1 point)
51% | Said they were not interested in a loan (up 1 point and historically very low)
2% | Reported that financing was their top business problem (unchanged).
5% | Reported loans “harder to get.”

Source | NFIB Research Center, Chief Economist William C. Dunkelberg and Director of Research and Policy Analysis Holly Wade

You can download the full report at NFIB.com

GettyImages

Update: On Monday, January 22, the Senate voted to break the filibuster and reopen the government…for at least a few weeks. Later in the day, the House approved the measure and the President signed it into law. The temporary measure lasts until February 8.

A shutdown of the United States federal government began at midnight on Saturday, January 20, 2018, after a failure to pass a relevant legislation funding bill for government operations and agencies. If the shutdown continues, here are some ways certain small businesses may be impacted.

(Partial list. Will be updated.)

Taxes | The IRS expects to keep just over 35,000 employees, or about 43.5 percent of its workforce, on the job during the shutdown. That cut to staffing could have an impact as the tax season kicks into high gear, potentially delaying refunds to taxpayers, or not being available to answer questions.

Postal Service | The U.S. Postal Service receives no tax dollars for day-to-day operations so deliveries will continue.

Business Travel | Airline passengers are not expected to feel much impact. The Transportation Security Administration (TSA) plans to have 53,865 of its 58,295 employees working during the shutdown. Air traffic control will not be affected.

Courts | U.S. Courts, including the Supreme Court, can continue to operate normally for about three weeks without additional funding.

SBA Loans | The processing of loans in some cases could be impacted. On its website, the SBA has warned that transactions may not be processed and that its staff will not be able to respond to inquiries until its funding is restored.

Food Inspections | Department of Agriculture food inspectors will continue to stay on the job.

Patents | The United States Patent and Trademark Office (USPTO) can remain open for a few weeks after the shut down since it will have access to fees already collected in prior years

Washington DC | Unlike in previous shutdowns, the local government in Washington, D.C. will continue operating through the shutdown, due to a provision enacted in the previous year’s appropriations legislation.

Military | All 1.3 million military personnel on active duty will remain on normal duty status. Civilian personnel in non-essential operations will be furloughed. Defense Secretary Jim Mattis said a sustained funding impasse would cause ships to go without maintenance and aircraft to be grounded.

During shutdowns, non-essential government employees are furloughed, or placed on temporary unpaid leave. Workers deemed essential, including those dealing with public safety and national security, keep working. The last shutdown, in October 2013, lasted more than two weeks and more than 800,000 federal employees were furloughed.

Update: On Monday, January 22, the Senate voted to break the filibuster and reopen the government…for at least a few weeks.

SmallBusiness.com Stories from the 2013 Shutdown

A Government Shutdown Tale of Two Restaurants

Government Shutdown Causing Pain for Small Businesses

Wannabe Craft Brewers Are Hopping Mad Over Shutdown

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Update (4.17.2018) | The Supreme Court heard arguments in the case today. For an indepth overview, visit SCOTUSblog.com. We will update this post when the Court hands down its decision.

On Friday (1.12.2018), the U.S. Supreme Court announced it will take up a case that could require online retailers to collect state sales tax on purchases made online. In a previous 1992 case (Quill v. North Dakota), the court ruled that a direct marketing company cannot be forced to collect sales tax in states where it has no physical presence. While the Quill decision was made prior to the explosion in online e-commerce, the court has used it as the reason to avoid taking up a case specific to internet “e-commerce.”

By deciding to consider the current case (South Dakota v. Wayfair), the court is heeding calls from traditional retailers and dozens of states that contend that the 1992 ruling is obsolete in the e-commerce era. As part of the 1992 decision, the court indicated that Congress should take up the matter. The full Congress has not addressed it, however.

Main Street merchants vs. online e-commerce

Traditional Main Street small and local retailers have long argued that it’s unfair to not require online retailers to collect state sales tax. However, many major online retailers like Wayfair Inc., Overstock.com Inc. and Newegg Inc. are opposing South Dakota in the court fight. Each collects sales taxes from customers in only some states. (Amazon.com is not involved in this case, as explained below.)

“If Quill is overruled, the burdens will fall primarily on small and medium-sized companies whose access to a national market will be stifled,” the companies have argued in court documents. “Sales tax laws across the country are too complicated for retailers to know how much tax to collect unless they were physically present in the customer’s state.”

While this may have been true in the past, the National Retail Federation (NRF), a supporter of overturning Quill, now says that computer software has made that concern obsolete. The NRF says that Congress “…should not sit on the sidelines as the Supreme Court considers this case. It’s time to pass legislation to settle this critical issue once and for all. Even if the court rules in favor of a modern sales tax policy, legislation will still be needed to spell out how that would work.”

Why state and local governments support overturning Quill

State lawmakers may be ready to take up the legislation because 45 states with income taxes are seeking ways to make up the revenue they have lost due to provisions in the recently-passed tax reform act.

According to a report by the non-partisan congressional Government Accountability Office, state and local governments could have collected up to $13 billion more in 2017 if they’d been allowed to require sales tax payments from online merchants and other remote sellers. Other estimates are even higher. All but five states impose sales taxes, according to Bloomberg.

What about Amazon.com?

While Amazon.com is by far the largest online retailer in the U.S., it isn’t directly involved in the current court review.

In the past, Amazon used Quill to avoid collecting sales tax at all. The company has gradually changed its position as it has built warehouses — and thus, created a greater physical presence — all over the country. The company now says it backs a nationwide approach that would relieve retailers from dealing with a patchwork of state laws.

When selling its own inventory, Amazon charges sales tax in every state that imposes one, but about half of its sales involve goods owned by third-party merchants. For those items, the company says it’s up to the sellers to collect any taxes, and many don’t.

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(See earlier article for the background of and provisions in the earlier versions.) According to the New York Times, here are some of the business-related parts of the bill the Senate-House conference committee has agreed on. Note: Before becoming law, the legislation must now be sent back to both the house and senate for approval. To become law, each chamber must past identical bills which then must be signed into law by the President.

Update below: Friday | 11.15.2017 | 11.45 p.m.

Corporate Tax | Agreement drops the corporate tax rate to 21 percent from the current 35 percent rate and will go into effect in 2018, rather than 2019, as the Senate bill originally called for.

State & Local Tax Deduction | Allows individuals to deduct up to $10,000 in state and local taxes, split between property taxes and either income or sales taxes paid.

Corporate Alternative Minimum Tax | Rescind the corporate alternative minimum tax tucked into the Senate bill at the last minute as a way to pay for the $1.5 trillion bill.

Individual Income Tax Rates | Top rates will drop to 37 percent, down from the current rate of 39.6 percent. Rate will kick in for income levels below the $1 million cutoff outlined previously in both the House and Senate bills.

Pass-through Companies | Negotiators agreed to keep the Senate’s approach to provide a tax deduction for pass-through companies, whose owners pay taxes on profits through the individual code. However, that deduction will likely be lower than the 23 percent deduction in the Senate-passed bill. The conference bill will include a House provision that would allow some pass-through owners with few employees — but large amounts of investment in their businesses — to bypass a limit on how much income qualifies for the preferential deduction.

Update: Friday | 11.15.2017 | 11.45 p.m.

According to Bloomberg, here are key changes to U.S. tax law for individuals and businesses that have emerged from the final Republican bill that’s headed for votes in the House and Senate.

Corporate Tax Rate
Current law: 35 percent
Proposed: 21 percent, beginning in 2018.

Individual State and Local Tax Deductions
Current law: Individuals can deduct the state and local taxes they pay, but the value is subject to certain limits for high earners.
Proposed: Individuals can deduct no more than $10,000 worth of the deductions, which could include a combination of property taxes and either sales or income taxes.

Obamacare Individual Mandate
Current law: An individual who fails to buy health insurance must pay penalties of $695 (higher for families) or 2.5 percent of their household income — whichever is higher, but capped at the national average cost of the most basic, low-premium, high-deductible plan.
Proposed: Repeal the penalties.

Mortgage Interest Deduction
Current law: Deductible mortgage interest is capped at loans of $1 million.
Proposed: Deductible mortgage interest for new purchases of homes would be capped at loans of $750,000.

Medical Expense Deduction
Current law: Qualified medical expenses that exceed 10 percent of the taxpayer’s adjusted gross income are deductible.
Proposed: Reduce the threshold to 7.5 percent of AGI for the tax years 2017 and 2018.

Child Tax Credit
Current law: A $1,000 credit for each child under 17. The credit begins phasing out for couples earning more than $110,000. The credit is at least partially refundable to qualified taxpayers who earned more than $3,000.
Proposed: Double the credit to $2,000 and provide it for each child under 18 through 2024. Raise the phase-out amount to $500,000, and cap the refundable portion at $1,400 in 2018.

Estate Tax (Also called “Death Tax”)
Current law: Applies a 40 percent levy on estates worth more than $5.49 million for individuals and $10.98 million for couples.
Proposed: Double the thresholds so the levy applies to fewer estates. The higher thresholds would sunset in 2026.

Wikimedia | CC-BY-SA-3.0

President-elect Trump’s plan to invest about $550 billion in new infrastructure projects across the country was a central theme in his campaign. No doubt, small businesses will play an important role in such a massive program if Congress approves Trump’s plans. The maps below show how far-flung the infrastructure needs of the U.S. are and how much opportunity there is for small businesses in trades related to construction, engineering, finance and more — and the vast network of businesses that will be needed to supply and serve them.

The maps were created by the Washington Post’s Graphics Reporter Tim Meko and display the massive scope of America’s infrastructure. More details and insightful annotations for each map can be found on the Washington Post website feature, “Six maps that show the anatomy of America’s vast infrastructure“

The Electric Grid

There are more than 3,300 power utilities and about 7,700 power plants that produce and distribute electricity to homes, businesses and other consumers.

Ports and Inland Waterways

The U.S. Army Corps of Engineers estimates that more than 95 percent of overseas trade produced or consumed by the United States moves through our ports.

Bridges

A 2016 study by the American Road & Transportation Builders Association found that nearly 10 percent of the 600,000 bridges in the United States are structurally deficient.

Pipelines

There are about 150,000 miles of oil pipelines and more than 1.5 million miles of natural gas pipelines in the United States.

Railroads

More than 160,000 miles of track, 76,000 rail bridges, and 800 tunnels across the nation are shared by hundreds of operators moving freight and passengers.

Airports

Our airways are the busiest in the world. In a three-day span in early November, Flightradar24, which tracks live air traffic, showed more than 160,000 flights arriving or departing U.S. airports.

VIA | WashingtonPost.com

Photo: Howard Mattinson via Flikr

As we reported last week, a federal judge in Texas has blocked the Department of Labor’s (DOL’s) new federal overtime rule, which would have raised the Fair Labor Standards Act’s (FLSA’s) salary threshold for exemption from overtime pay from $23,660 to $47,476. Whether one thinks the judge’s action is correct or not, one thing is certain: Thousands of business owners across the country are confused because they had already taken steps to comply with the threshold exemption slated to begin two days from now (Thursday, December 1, 2016). (However, as we reported in September, almost half of small businesses weren’t aware of the new regulations.)

According to Lisa Nagele-Piazza of the Society for Human Resource Management, from a legal standpoint, until a final decision is reached, employers may follow the existing rule. However, as an employer-employee relationship issue, the most common answer one receives when asking the experts is this: “It depends.”

It depends on whether or not an employee has already received a raise or change in employee status that would make them eligible for (or, stated differently, “not exempt from”) overtime pay.

If you’ve done nothing in anticipation of the change, it’s your lucky day: Continue doing nothing.

If you have done something, your choices are not as good: Once an employee believes more money will be coming into their pocket, it is a blow when they learn it’s being removed. So it depends, ultimately, on management decisions rather than pure legal or business decisions.

Here are some quick answers Lisa provides on the SHRM website. (The link at the bottom of this article provides more in-depth explanations.)

Q | Does a company have to do anything by the Dec. 1 deadline?
A | No.

Q | Is the judge’s ruling the final step?
A | No. A preliminary injunction isn’t permanent and will be reviewed by the court. However, the judge wouldn’t have granted the preliminary injunction unless he thought the challenge had a substantial likelihood of succeeding.

Q | Can the Labor Department challenge the decision?
A | Yes. The department said in a statement that it is currently considering all of its legal options.

Q | Does this ruling apply to all employers nationwide?
A | Yes.

What should a company do that has already either raised exempt employees’ salaries to meet the new threshold or reclassified employees to nonexempt status?

Employers will likely want to leave decisions in place if they have already provided salary increases to employees in order to maintain their exempt status, according to Alfred Robinson Jr.,a former acting administrator of the DOL’s Wage and Hour Division. It would be difficult to take that back. If there are exempt employees who were going to be reclassified to nonexempt, but haven’t been reclassified yet, Robinson said employers may want to postpone those decisions and give the litigation a chance to play out. “This should be a welcome sign for employers, even if they’ve already made changes,” Robinson said. “They can at least hold off on further changes.”

Also on SmallBusiness.com

Overtime Pay Rule Overturned: Federal Judge Rules in Favor of States, Business Groups | 2016

VIA | SHRM.Org The Overtime Rule Has Been Blocked. Now What?

Yesterday, on November 22, 2016, a federal judge in Texas blocked implementation of a change in the Department of Labor’s “overtime rule.” SmallBusiness.com has tracked the rule change process for nearly two years. Scheduled to go into effect Dec. 1, the change would have required employers to pay time-and-a-half to their employees who work more than 40 hours in a given week and earn less than $47,476 a year. (Scroll to the bottom of the page for more background on the regulation and the definition of “exempt worker” and “salaried employee.”)

Tuesday’s decision, by U.S. District Judge Amos L. Mazzant III in Sherman, Texas, is a victory for 21 states and dozens of business groups (Nevada vs. U.S. Department of Labor). The plaintiffs argued that expanding the number of employees subject to the overtime rule would increase state government costs dramatically.

Dozens of business groups that joined in the suit with the states said the overtime rule would have hurt retailers and other small businesses by adding to labor costs. They also said the change would have forced employers to convert full-time jobs to part-time. The U.S. Chamber of Commerce said the requirement would have added $1 billion in costs and “cause many disruptions in how work gets done. … The rule would have reduced workplace flexibility, remote electronic access to work, and opportunities for career advancement,” the chamber said in a statement.

Putting the genie back in the bottle

The timing of the decision was just in time for many employers faced with the challenge of making decisions that could have meant lay-off of many employees. U.S. employers have spent months adjusting employee schedules, job duties and pay ahead of a new overtime rule.

Employers that made big changes in their workforce ahead of the rule’s Dec. 1 effective date—either by raising managers’ salaries to the newly set threshold for overtime pay or eliminating job categories like assistant manager—told the Wall Street Journal they aren’t yet planning to reverse course, while others are taking a wait-and-see approach.

On Tuesday, the Labor Department said  that it is considering “all of our legal options.” With a new administration taking over the White House in January, there is little chance for the ruling to be challenged.

Background: What are salaried employees? Exempt workers?

Currently, workers who are paid by the hour receive “time-and-a-half” overtime pay if they work more than 40 hours a week or more than eight hours in one day. Salaried employees (those paid by the year) are not covered by overtime regulations. Such salaried employees can include a wide range of professionals, administrative workers and executives. (The term “exempt workers” is sometimes applied to this group, as they are exempt from coverage of overtime regulations.)

To keep companies from calling every employee an exempt worker, the law includes an exception for salaried workers whose salaries have been less than $455 a week, or $23,660 a year—they must be paid time-and-a-half for overtime.

The new rule would have increased the “earning threshold” to $913/week ($47,476 per year). Increasing the exemption to that amount would have expanded time-and-a-half overtime pay to an additional 4.2 million workers.

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