November 6, 2020: BREAKING—Here Are the State Props That Passed This Week

Gusto Editors

November 6, 2020

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The state of the local

While the presidential election has been the main focus for many of us this past week, state and local ordinances can also have a sizable impact on small businesses and their teams. Here’s a summary of state and city measures that have passed and can impact businesses in the coming year.

  • California
    • Prop 24, known as the California Privacy Rights Act (CPRA), provides additional privacy rights to California consumers and extends the employer exemption for California’s existing Consumer Privacy Act (CCPA) to 2023. 
    • Prop 22 designates app-based transportation and delivery drivers as independent contractors and allows for labor and wage policies specific to app-based drivers and companies.
    • San Francisco Prop F eliminates the city’s payroll expense tax, increases the business registration fee, and incrementally increases gross receipts tax rates for certain business activities.
    • San Francisco Prop H streamlines the process to open small businesses in San Francisco by requiring businesses’ permits to be reviewed within 30 days, allowing different city departments to review a business’s application simultaneously, and expediting inspections when permits require them.
    • San Francisco Prop L, or the “CEO tax,” places an additional tax on some businesses in San Francisco when their highest-paid managerial employee earns more than 100 times the median employee compensation.
  • Colorado
    • Prop 116 decreases the state income tax rate for individuals, estates, and trusts from 4.63% of federal taxable income to 4.55% as of January 1, 2020. The measure also reduced the tax rate for C corporations operating in Colorado from 4.63% of net income to 4.55%.
    • Prop 118 allows for 12 weeks of paid family and medical leave funded through a payroll tax paid by employers and employees in a fifty-fifty split.
  • Florida
    • Amendment 2 increases the state minimum wage from $8.56 in 2020 to $15.00 in 2026. The rate will increase on September 30 of each year until 2026.
  • Oregon
    • Measure 26-218 authorizes the Metro Council to impose a payroll tax up to 0.75% on employers with 26 or more employees (not including local governments) beginning in 2022 to fund infrastructure improvements and transportation programs.

Businesses in some states may need to prepare for changes in the next year. The Gusto team is creating guides to help these employers stay on top of the new regulations that can impact their businesses.

Visit our blog and sign up for notifications to get notified as soon as our guides are available.

New year, new form

If you pay any independent contractors, heads up: Starting with the 2020 tax year, instead of reporting non-employee compensation (NEC) through Form 1099-MISC, you must complete and file Form 1099-NEC by January 31, 2021 (or the next business day).

It’s a relatively small change, but you’ll want to avoid penalties from filing the wrong form or giving your contractors an incorrect statement. For a little help with that, see our full guide on the new 1099-NEC form and process.

Headlines from the week

  • A federal judge has ruled that all Paycheck Protection Program (PPP) borrower names and loan amounts must be released. (Wall Street Journal)
  • During the pandemic, women workers were furloughed at a rate 24% higher than men. (Gusto)
  • The future of food in San Francisco: food hubs. (San Francisco Chronicle)

Top relief options for the week

  • Ohio’s Small Business Relief Grant program has been allocated $125 million in funds to provide $10,000 grants to small businesses impacted by COVID-19. Applications are open as of November 2.
  • Iowa City Downtown District announced a new “Winter Up Program” to support social distanced dining this winter. The program includes a Patio Winterization Guide and $25,000 in grants. Applications are open through November 30, 2020.
  • Milwaukee’s #Back2Business program has been extended to November 9, 2020. Grants of $10,000 will be awarded to Black- and minority-owned businesses that have been impacted by COVID-19 and social unrest. Milwaukee is the first of six locations where the program will be implemented.
  • Wisconsin Women’s Business Initiative Corporation’s COVID-19 fast track loan program offers lines of credit up to $10,000 and term loans up to $15,000 for existing businesses looking for business financing during COVID-19.
  • See more relief options in our Small Business Relief Finder.

Want more small business news and resources? Check out past editions in our archive.

Gusto Editors Gusto Editors, contributing authors on Gusto, provide actionable tips and expert advice on HR and payroll for successful business management.
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