The following column by NFIB/Tennessee State Director Jim Brown originally appeared in the Knoxville News Sentinel on Saturday, March 28, 2015.
Legislation (House
Bill 557/Senate Bill 663) that would authorize Tennessee’s Department of Labor to
study the feasibility of a paid leave program, subject to federal funding availability,
is on notice in a House subcommittee.
The efforts’ roots
are at the White House. In January 2015, President Obama proposed that Congress appropriate $2.2 billion for
states and cities to implement paid family leave programs,
as well as direct $1 million in existing federal funds for states and cities to study the issue.
Contrary to some claims, my
organization, the National Federation of Independent Business, has surveyed and
studied this issue extensively to discern its potential impact on small
business owners and their employees. Federally-funded
state studies are unnecessary and wasteful; much research already exists.
Studies from
the Society for Human Resource Management and WorldatWork demonstrate employers clearly have
been evolving over time to meet the needs of their workforces through
traditional leave and paid-time off (PTOs) plans, which combine these benefits into a comprehensive account for
employees to use as needed. Specifically:
- Almost every employer has a leave
policy of some kind. In 2010, 54% of employers offered traditional leave
plans with allocated vacation, sick and personal time, while 40% offered
PTOs. (WorldatWork) - In 2014, 98% of organizations offered vacation leave. PTOs made up 58%
of these policies, while 40% offered vacation through traditional leave. Also,
91% of organizations provided some form of paid sick leave to employees,
up from 86% in 2013. (SHRM) - More businesses are offering forms
of family medical leave, required for companies with 50 employees or more
since the 1993 federal law, and other types of leave.
Different businesses require varying amounts of flexibility.
What a mid-sized landscaper can offer his or her employees can be quite
different than what an independent grocer, collision repair center or smaller
landscaper can offer.
Mandates deny employers needed flexibility to manage their business
operations during all cycles, to meet essential customer needs and to work with
their employees on time schedules. They also can lead to abuse or overuse by
some employees.
Most importantly, mandates, even with exemptions, often lead to very
negative consequences for employees and the unemployed. Several surveys have found leave mandates
result in or will lead to delayed hiring and raises, reduced benefits and pay, or even layoffs.
According to the Employment Policies Institute, after
Seattle implemented its mandatory leave policy 16 percent of employers raised
prices, 17 percent required employees to pay more for benefits or eliminated
them altogether, and 18 percent reduced hours or cut jobs. One in five “surveyed
businesses reported taking at least one cost-saving or revenue-increasing
measure,” with the lowest-wage employees feeling the squeeze first.
A study by a pro-mandate advocacy group, the Institute
for Women’s Policy Research, found that nearly 30 percent of San Francisco’s
lowest-wage employees reported layoffs or reduced hours after that city’s
mandate took effect. The Urban Institute also found some San Francisco
employers scaled back on employee bonuses, vacation time and part-time help.
Another EPI study showed how Connecticut’s paid leave
mandate forced a significant percentage of employers to cut employee hours,
wages, and even jobs.
NFIB studied the issue in California in 2008. That’s state’s proposed $4.6
billion paid sick leave mandate would have resulted in 370,000 lost jobs within
five years of implementation. That’s good for Tennessee’s economic recruitment
efforts but awful for those California workers and families.
Paid sick leave
legislation was introduced in Tennessee several times by members of the
political party that previously controlled the executive and legislative
branches. It couldn’t pass then, and hopefully it won’t now.
Since those
efforts, leave policies have improved, without any government studies or
intervention, benefiting Tennessee’s risk takers and their employees.
The president
should keep his divisive harmful playbook at home and out of the hands of good Tennessee
people who mean well, as well as those looking to score points with his base.
Jim Brown is Tennessee
state director for the National Federation of Independent Business, the state’s
leading small business association with 8,000 dues-paying members in Tennessee
and 350,000 nationwide.
