Business & Biden: Changes Ahead?

By Matthew J. Roberts, Esq.

In the current political fervor, it appears to be official that Joseph Biden has won the presidency. That leads us to this question….will the new administration enact new business rules and regulations? With that prospect of enhanced regulation comes the trepidation of change relative to the way businesses have operated over the past four years. As we all know, President-elect Biden ran his campaign on a platform of protection for employees and consumers; and for keeping corporations accountable for any misconduct they may have committed. With potential new rules and regulations, companies face a substantial expense in appropriate corporate compliance. Some of the possible areas of concern include: employee relations; company disclosures regarding climate change and climate impact; disclosure of corporate advocacy strategies; and the ever-important corporate and individual tax rates.

It is interesting to note that one of the Trump administration’s late-term goals involved greasing the skids for companies to classify some workers as independent contractors. The Biden administration would immediately attempt to rescind this rule, noting their aim to further protect employees with regard to benefits previously attained or benefits available through eligibility. This would include the expansion of sick leave, as well as medical leave for all employees dealing with situations involving COVID-19.

Coinciding with potential changes to employee relations, the Biden administration will likely attempt to add to corporate disclosures as to how corporations operating in the United States handle consumer data as well as other consumer protection regulations.

Above all, the most significant change concerning the Biden administration would be an increase in the corporate tax rate and other individual tax reform. The new administration has hinted an increase in the corporate rate from 21 % to 28 %; and increasing the individual tax rate for those earning more than $400,000 per year to 39.6 %. This increase would certainly impact companies that “zero-out” at the end of their fiscal year, as well as pass-through entities like LLC’’s.

In addition, the Biden administration is likely to seek additional strict climate impact disclosures for companies that find themselves in the merger or acquisition mode.

Lastly, the Biden administration seems likely to seek increased protection surrounding consumer data. This would likely come in the form advocating on behalf of consumers relative to corporate handling of any consumer information. President-elect Biden has spoken in the past of his desire to see United States regulations regarding data privacy and protection of consumer data to model those of the European Union; the EU having very strict regulations regarding data breaches and data privacy. This could portend additional corporate expense for appropriate compliance and/or the risk of heavy fines for data breaches.

The Law offices of Burton A. Brown will keep informed of any new regulations and changes in an effort to better serve our clients. Should you have any concerns or questions regarding your corporate compliance issues please contact the law offices of Burton A. Brown.

babrown@burtonabrown.com