In this article, I am going to touch on a few things to watch that are sure to affect every small to mid-size business as we enter 2023.

IRS rules requiring 1099K filings for payments through Venmo and other apps.

In my last article, I reported that the IRS was implementing new rules requiring the reporting of payments made through payment processors such as PayPal and Venmo. After a lot of controversy about how to differentiate between commercial and personal payments (for example, sending a dinner reimbursement via Venmo), the IRS has retracted the latest rules, and will reissue rules after studying how to effectively implement the payment reporting without snaring personal transactions. Stay tuned, but for now the 1099k requirement seems to be put on hold.

11th Court of Appeals ruled that school districts can require restroom use based on biological sex at the time of birth.

On December 30, 2022, the U.S. 11th Circuit Court of Appeals held, in a 7-4 opinion, that separating bathrooms in schools based on biological sex is constitutional and does not violate Title IX. The author of the majority opinion wrote, “St. Johns County School Board showed its policy restricting bathroom use by ‘biological sex’ was constitutional because it significantly furthered the student privacy interest the board claimed.” “That interest included allowing students to use the bathroom away from the opposite sex and to shield their bodies from the opposite sex—an interest courts have long deemed valid ‘in a variety of legal contexts.’”

While the ruling will only directly impact the states in the 11th Circuit, Florida, Alabama, and Georgia, I expect that it will be relied upon to obtain similar rulings in the 5th Circuit (which includes Texas) due to the 5th Circuit’s conservative lean. Further, even though it only addressed schools, the same arguments no doubt apply to the workplace so it will be worth watching.

Marijuana legalization

The trend toward legalizing marijuana for both medical and recreational use continues. Six states are set to either legalize it or put it to a vote in 2023. One of those states, Oklahoma, will vote on whether to legalize recreational use in March.

Perfecting hybrid work.

At the end of last year, we’ve seen a number of companies call their workers back to the office, with some of those workers voicing a desire to continue to work from home. 2023 is likely going to continue to require employers to navigate change in how their people work in light of talent shortages and the workers’ desire for engagement, compelling career paths, flexibility, and reported burn out. More and more employees are expressing the desire for a people first culture, a sense of shared purpose, humanized employee/management relationships, and a feeling of overall well-being. Those things will require employers to continue to rethink how they hire, compensate, and distribute work among their employees.