As we begin 2025, staying informed about compliance updates for small businesses is more important than ever. These regulatory changes can significantly impact your operations, and understanding them is key to staying compliant and prepared.
During a recent Maine SBDC webinar, Certified Business Advisors Peter Harriman, Ali Lane, and Dan Umphrey shared insights about key federal and state mandates, including the Corporate Transparency Act (CTA), minimum wage increases, the Paid Family Leave law, changes to reporting thresholds, the Pregnant Workers Fairness Act, and new I-9 form requirements. This blog provides a concise guide to help you navigate these updates.
Corporate Transparency Act and BOI Reports
The Corporate Transparency Act (CTA) introduces new reporting requirements aimed at preventing fraud and enhancing corporate transparency. However, the deadline to file Beneficial Owner Information (BOI) reports is currently on hold. A recent court ruling has paused the January 13, 2025, deadline, and further updates are expected as legal proceedings continue.
What Does This Mean for Your Business?
- The January 13, 2025, deadline is currently suspended. Businesses should stay informed as the situation evolves.
- While the deadline is uncertain, it’s still advisable to prepare your BOI reports in advance to avoid last-minute challenges when a new compliance date is announced.
What to Know:
- BOI reports require identifying the individuals who own or control an LLC or corporation.
- Filing is free via the Financial Crimes Enforcement Network (FinCEN website).
- You are not required to use a third-party service that charges fees for filing.
- Keep an eye on official updates from FinCEN and legal developments.
Minimum Wage Updates
Minimum wage rates are increasing in 2025:
- Statewide: $14.65/hour, tipped wage at $7.33/hour.
- Portland and Rockland: $15.50/hour, tipped wage at $7.75/hour.
For salaried, exempt employees, the minimum weekly pay increases to $843.51. However, potential federal legislation could push this threshold significantly higher, pending court decisions. Employers should monitor updates and budget accordingly.
Paid Family Leave Law
Starting January 2026, Maine’s Paid Family and Medical Leave (PFML) law will provide eligible workers up to 12 weeks of paid leave for family or medical reasons. Contributions to the program began on January 1, 2025, and the online PFML Employer Portal launched on January 6, 2025.
Employers Must:
- Register on Maine’s Department of Labor portal to file quarterly wage reports, designate payroll processors, and remit contributions.
- Notify employees about the program and their rights to take leave.
Contribution Details for Businesses:
- Fewer than 15 employees: 0.5% of payroll, which can be fully passed to employees.
- 15 or more employees: 1% of payroll, shared between employer and employee.
Employers must submit their first quarterly wage reports and premium payments between April 1 and April 30, 2025. The portal also supports self-employed individuals and tribal governments choosing to participate.
Changes to Reporting Requirements
Adapting to updated reporting requirements is essential for maintaining compliance and ensuring smooth business operations. These changes aim to enhance transparency and accountability, affecting thresholds for 1099-K forms and state tax reporting.
- 1099 Reporting Threshold: The threshold for receiving 1099-K forms is gradually lowering. For 2024, the threshold is $5,000. For 2025, the threshold will be $2,500. By 2026, it will drop to $600, increasing IRS scrutiny on online sales.
- Maine Tax Reporting: Businesses must now report to the state if they issue 10 or more combined 1099s and W-2s, down from the previous threshold of 200. Reports are completed using the Maine Tax Portal.
Pregnant Workers Fairness Act
The Pregnant Workers Fairness Act (PWFA) requires businesses with 15 or more employees to provide reasonable accommodations for pregnancy-related conditions unless it causes undue hardship. Reasonable accommodations may include modified schedules, seating, or remote work options. Maintaining clear communication and documentation with employees is crucial.
New I-9 Form Requirements
Employers must now use the updated I-9 form, which expires on May 31, 2027, for verifying employment eligibility. The I-9 form must be completed within three days of hire and retained for three years or one year after termination, whichever is later. A new I-9 form must also be completed for any workers whose work authorization has expired.
Next Steps for Small Business Owners
Adapting to these mandates may seem complex, but with proactive planning and reliable resources, your business can adapt and thrive. These steps will help your small business navigate the 2025 compliance updates with confidence. For a quick reference, here’s your 2025 compliance checklist:
To Stay Compliant:
- Understand Your Responsibilities: Review the mandates that apply to your business, including size-specific thresholds.
- Stay Informed: Visit the Maine Department of Labor website for updates, instructional resources, and registration requirements.
- Communicate with Employees: Ensure employees are informed about new policies, such as paid family leave, and their responsibilities under these laws.
- Consult Experts: Reach out to Maine SBDC advisors for guidance tailored to your business. Their no-cost, confidential advising services can help you navigate these changes.