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Policy and Taxes: A Review and Look Ahead

2017 was a surprisingly light year on tax regulations as Congress prepares for a wave of tax reform in 2018. OSHA made up for this limited tax policy change, however, with several new health regulations.

One regulation many people are watching is the once again delayed Crane Regulation. This marks the second time that the requirement has been pushed back since 2014. One of the largest ramifications of this rule will be the mandate that all cranes will need to be stored when winds reach an excess of 20mph. Not only would this be a blow to the productivity of crane operations, but it would also halter the growth of many cities like Chicago which has used 60 fixed cranes this year alone.

However, despite its potential burden, the regulation has its merits as several recent incidents have caused some valid concerns. In February of 2016, a crane collapse in Manhattan killed one and injured three while in September one construction worker was killed when a crane collapsed in Boston. This Operator Certification Financial Rule also would help with the growing concern over natural disasters like when Hurricane Irma hit the coasts of Florida. The Miami region alone had 25 cranes that could not be brought down in time.

September 23, 2017 marked the beginning of OSHA’s enforcement of the respirable crystalline silica rule (Silica Rule). This  rule requires the capture of dust or adequate respiratory protection for any construction worker who deals with the cutting or grinding of concrete and brick. The Silica Rule requires a company to provide these protective measures for every job dealing with concrete or brick grinding and have begun issuing citations as of Oct 23rd. Despite these new requirements being implemented, there is no step-by-step guide on how to comply with the Silica Rule because of how frequently jobs can vary. If you are unsure how to comply, you can contact OSHA directly at 800-321-6742 or trade associations like the Associated General Contractors of America.

The Final Rule to Improve Tracking of Workplace Injuries and Illnesses (Electronic Recordkeeping) for submitting and recording all workplace injuries to took place December 1st amid a maelstrom of controversy. The new requirement would not only force employers to log every workplace injury and illness online, it would then place that information into a public database for contractors who work government contracts. This would be one of methods OSHA would monitor the safety of companies in the field and try to improve the enforcement of their regulations. Given that the opioid epidemic has hit the construction industry especially hard this past year, this already controversial bill has even more employers upset with its “anti-retaliation” measure. As written, the bill forbids employers to automatically perform drug tests after an employee has an incident; instead, the employer must actively suspect drugs were a reason for the incident

With all of these changes implemented by OSHA this year, perhaps the most significant of all was the increase in OSHA’s maximum penalty limit at the very end of 2016. This saw a tremendous spike in the amount OSHA can fine you for violating its Health and Safety Regulations by 78% leading to a greater potential to cripple a company with fines. Unchanged since 1990, these new rates were to both account for the two-decade gap and serve as a large deterrent for those willing to ignore OSHA Safety Standards.

Despite the a lull of regulatory changes in 2017, it seems many new changes to our taxes, procedures, and regulations are on the horizon for 2018 as the Republican party looks to push forward their tax bill before Christmas.

To be honest, there’s too much to break down of Congress’s GOP Tax Cuts and Jobs Act within this article alone and will be handled in a separate article posted on our website at cepayroll.com once the bill in signed into law. Everything from deductions, rates, 401K, and even the tax brackets themselves are being altered with this broad bill. In a brief review, the bill currently would result in $1.5 trillion in tax cuts for businesses and individuals and does not seem to have a method of making up this initial deficit in government revenues. In its nearly 450 page form the most significant impact for companies would be drop of the corporate tax rate from 35% to 20%.

Following up the tax legislation, the Trump administration’s next  step will be its much-anticipated infrastructure bill. The administration has been incredibly reluctant to release any details so far but with the construction industry consistently growing and an aging infrastructure system it has been a key talking point of 2017. One of the primary ways this $1 trillion pledge is going to be funded is through a mixture of taxes and private investment. The main tax being considered is a 7-cent hike in the federal gas tax that would be funneled into the Highway Trust Fund for state transportation projects. Despite legislative hesitation to raise taxes after efforts to reduce tax rates, as much as 75% of the public reported that they do not mind paying more per gallon to fund much needed infrastructure projects. Beyond that, the prediction is that most funding for infrastructure projects will come from tax benefits to companies investing in public projects and a focus on private-public relationships.

2018 is going to be a busy year full of predicted growth, tax change, legislative change, and OSHA regulations. In order to stay ahead of these changes and reduce your risks there is a need to stay vigilant on those issues which can most affect your business. With the increased penalty rates from OSHA and missed tax payments which will result in staggering fines, the first thing you need to develop is a way to stay on top of these risks and to prosper. We suggest setting a calendar reminder once a month to check your local OSHA website to keep on top of any developments or continue to read this newsletter month after month. We also post interesting articles on our LinkedIn page if you don’t want to do the searching yourself.

Much like the implementation of the Affordable Care Act, this massive legislation is going to cause a lot of confusion in the early days and will have unseen consequences for the construction industry. The key is going to be frequent contact with your accountant or payroll provider. CE Payroll will help you manage the changes of taxes and eliminate your need to worry how these changes will affect your day-in and day-out tasks. While not a substitute for your accountant at the end of year, we stay on top of regulatory changes and inform you about any policy changes that sweep across the industry. We can manage your state and local filings and let you get back to managing your business for another year.