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Overtime Rules Simplify Regulations
New overtime rules issued by the U.S. Department of Labor, which went into effect August 23, 2004, simplify regulations for small businesses.

“One of the pillars of President Bush’s small-business agenda is to reduce regulatory barriers for small businesses,” said SBA Administrator Hector V. Barreto. “These new rules will make it easier for small businesses to comply with overtime regulation.”

The new rules guarantee overtime protections to 6.7 million workers earning $23,660 per year or less. About 1.3 million salaried white collar workers will gain up to $375 million in additional earnings per year. Another 5.4 million salaried workers will get a guarantee of overtime rights.

“With these new rules, small-business employers will have more clarity should they decide to hire more employees without the fear of additional litigation,” added Barreto.

Learn more at www.dol.gov.

Business meals tax deduction is big benefit for small business

The tax deduction for meals and entertainment expenses is a bigger break for small businesses than it is for large corporations, according to a study conducted for the Small Business Administration’s Office of Advocacy.

Small corporations that used the deduction reduced their effective tax rate by an average of 0.75 percent, the study found. By contrast, large companies that used the deduction cut their effective tax rate by only 0.11 percent.

“Small firms use the meals and entertainment deduction as their primary marketing tool,” said Tom Sullivan, SBA’s chief counsel for advocacy. “They don’t have the budget for big ad campaigns, but they can talk with their potential clients over lunch.”

The National Restaurant Association said the study provides another reason why Congress should make meals and entertainment expenses fully deductible, instead of 50 percent deductible as they are now.

“Restoring the business meal deduction creates an environment where entrepreneurs can flourish, and America’s small businesses can create more jobs and help strengthen the economy,” said Tom Kershaw, owner of Boston’s Hampshire House and a restaurant association board member.

Making business meals fully deductible also would add a lot of gravy to restaurants — $12 billion in increased sales, according to the association.

AFS encourages you to take action today and voice your support for important legislation that benefits you, the small-business owner. Visit the Advocacy area of www.afswebsite.org for links to Senate and Congressional Web sites. While you’re there, don’t forget to check out the latest AFS News form the Hill for more information on the issues that affect you.

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