PRODUCTIVE DISRUPTION

I hope that 2025 is off to a prosperous start for all of you! If the pace at which we’ve been shot out of a cannon at NAPEO is any indication, it’s going to be a busy and productive year.

As I write this, Washington is recovering from a winter storm and bracing for a presidential inauguration, which is an exciting time to be here if you’re interested in American politics, history and/or major traffic disruption!

Anyone who lives here appreciates an old adage about your nation’s capital: it is a company town and the government is the company. The difference between DC and other headquarter locations is that every new Administration and Congress marks a significant transitional period for everyone. Hundreds or thousands of “company” people and their families move to and from Washington as the power shifts in one direction or another, impacting everything from who your neighbors are, your golf pairings, kids’ classmates, and oh yeah, who the decisionmakers are across the federal government.

And while change elections have become the norm, this one feels different.

In total, there are 75 new elected officials in the 119th Congress – 12 new senators and 63 new representatives.

60 percent of the House wasn’t in office in 2017, the last time the Congress worked on a comprehensive tax package like the one that will be taken up this year. 69 percent of House Ways and Means Committee members– and 63 percent of Senate Finance committee members– are new to the committee since that 2017 effort.

This kind of transition can be disruptive, but also incredibly productive.

As you likely know, NAPEO has invested significantly, both through direct lobbying and financial support through our PAC, to strengthen our relationships with key policymakers on both sides of the aisle. Because of this we are extremely well-positioned with influential legislators.

Since 2017, our industry has committed countless hours to raising the PEO profile to build political capital and accelerate the critical role we play in support of businesses across America. We want policymakers to understand that PEOs ensure timely payment of payroll taxes, assist with state and federal compliance for a new, sprawling workforce and enhance benefits that level the playing field for all employers.

Because of all of this, we’ve earned a seat at the proverbial table from which we can work with the Congress and the Administration to make meaningful progress on issues that have impacted our growth for years. We will approach our friends on Ways and Means about tax credit liability and statutory recognition of 199A deduction eligibility for PEO clients. We’ll work with the White House, IRS and even the new Department of Government Efficiency on IRS modernization efforts that bog down your business and your client’s credits (shouldn’t the fax machine be the poster child for government inefficiency!?). And we’ll keep pressuring the government across the board to pay earned credits to business owners who earned them, starting with PEO claims that have undergone additional layers of scrutiny.

The definition of inauguration is the beginning or introduction of a system, policy or period. Kind of perfect for the new era of PEO comprehension, appreciation and advancement we’re embarking on.