Small Business Protection Act
What Does Small Business Protection Act Mean?
Small Business Protection Act, also known as Small business job protection law, refers to the legislation passed in 1995 in the United States that mandated the increase of the minimum wage and changed pension or retirement plans for employees working for a company that employs one hundred people or fewer.
Insuranceopedia Explains Small Business Protection Act
The companies mostly affected by this act are the so-called S corporations in the US. S corporations are domestic business organizations that are not taxed like regular (and bigger) companies. An S corporation does not have more than one hundred stockholders. Prior to this act, the law on small business dictated that it only had thirty-five shareholders.
This law ensured the retirement benefits of the employees through its provision which is the Simple Retirement Plan. This plan gathers contributions from the employees and employers annually for the retirement pay of the former. When an employer fails to contribute, he or she will be penalized by the state.