January 6, 2023: Banner News—Minimum Wages Are Increasing in 2023
January 6, 2023
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Welcome to 2023
Happy New Year from Gusto! Let’s start this year right.
4 economic trends influencing small business in 2023
Before you can look forward, sometimes you have to look back. To close out 2022, Gusto economists pinpointed four key patterns that shaped this past year—and will continue to influence the year ahead. Here’s a peek into the major developments they uncovered:
- Growth in the tech sector slowed down, matching the overall average across companies.
- Bonuses are getting smaller in professional services businesses, with the biggest decreases in finance, communications, real estate, and technology firms.
- Job growth shifted away from the West Coast; seven of the 10 slowest-growing cities were located in California or Oregon, while eight of the 10 fastest-growing cities were located in the East or Midwest.
- After two years of nonstop growth in remote jobs, things are leveling off.
To see more insights into the data, read the full trends report here.
Minimum wages are increasing in 26 states
Exciting news for job seekers, employees, and business owners looking to attract more talent: minimum wages are increasing this year. Twenty-six states have announced that they’ll be introducing higher minimum wages in 2023. Meanwhile, 23 states—plus Washington, D.C.—already implemented higher minimum wages that took effect on January 1, 2023. The increases range from 23 cents to $1.50 an hour.
Raising minimum wages has multiple benefits. Not only do higher hourly rates better support your workers—especially as record-high inflation persists—they can also keep your business competitive, reduce employee turnover, and ultimately protect your bottom line.
To find out which states are increasing their minimum wage—and by how much—see CNBC’s complete list here.
How to use the federal R&D tax credit
Tax season is fast approaching, which means it’s prime time to review your tax credit options. One of the most common business tax credits is the Credit for Increasing Research Activities, otherwise known as the federal Research and Development Tax Credit (R&D).
The R&D tax credit rewards you for improving your business’s products, services, or operational processes. Common R&D activities include developing prototypes, seeking patents, and testing products.
If you qualify for the credit, you can apply a percentage of your qualifying expenses to offset your tax liability dollar for dollar—and end up saving thousands. That includes your income tax, payroll tax, and alternative minimum tax (AMT). Learn more about the credit qualifications and tax details by reading our full article. Gusto will also be hosting webinars about this handy tax credit this month, complete with tax credit experts answering questions live—registration details below.
Fresh from Gusto (and friends)
Employ’s Quarterly Insights Report
Recruiting Resilience: Embracing a Scalable Recruiting Function for 2023 & Beyond explores how employers can navigate the softening hiring environment and unprecedented labor market with talent strategies that are always in season.
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- What Is a CP-575 Letter?
JAN 18: How to Save Your Business Thousands with the R&D Tax Credit
If you’re improving your business’s offerings or processes using data, you may qualify for the Research & Development Tax Credit (R&D), which could reduce your payroll taxes by up to $250,000 a year—and your income tax by an unlimited amount. In this webinar, Gusto’s Head of R&D Tax Credits breaks down everything you need to know, including what it takes to qualify for the credit and how to claim it. Register here.
Accountants, we’re also hosting an R&D tax credit webinar just for you on Jan. 19. Register here.
JAN 18: How to Quickly Increase Your E-Commerce Sales
Building an engaging ecommerce website is only half the battle; to generate consistent sales, you also have to sharpen your marketing tactics. Whether you’re just getting started with your e-commerce store or want to increase sales after a lull, this webinar is for you. Andrew Maff, e-commerce expert and founder of BlueTuskr, is going to share tips and advice on everything from email campaigns and SEO to drop shipping and social media. Register here.
JAN 24: How Your Company Can Be More Strategic About its Tech Spending
Investing in tech is no longer just a smart business move—it’s an operational necessity. But with an endless array of options and near-constant advancements, how do you ensure you’re spending money on tools that will actually improve your business? In this webinar, The Harvard Business Review is gathering three experts to discuss just that. You’ll learn how to connect your tech spending to value-based outcomes, how to balance your investments for optimal results, and how to factor in your people along the way. Register here.
FEB 14: Managing Cash Flow During Periods of Uncertainty
Effective cash flow management is a more critical skill than ever, helping you cushion your bottom line and keep operations steady in times of economic uncertainty. That’s why The National Association of Women Business Owners (NAWBO) is hosting this webinar and workshop. You’ll learn to recognize the early signs of cash flow problems and pick up valuable strategies for managing cash flow. Register here.
Find the latest relief options in our Small Business Relief Finder.
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