Tennessee legislators agree with NFIB members that a paid leave study is unnecessary.
Sponsors introduced a bill that would study the economic impact of a paid leave program in the state. NFIB strongly opposed the legislation, which was taken off notice by both sponsors in recent weeks.
“NFIB has surveyed and studied this issue extensively to discern its potential impact on small business owners and their employees,” says NFIB Tennessee state director Jim Brown. “Federally funded state studies are unnecessary and wasteful; much research already exists.”
NFIB argued effectively with legislators that 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:
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In 2010, 54% of employers offered traditional leave plans with allocated vacation, sick and personal time, while 40% offered PTOs. (WorldatWork)
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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)
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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.
The Family and Medical Leave Act allows eligible employees to take unpaid time off to care for newborns, their own medical concerns or family members who are seriously ill. While this protected time off is unpaid, some states have started adopting their own paid leave programs for these same circumstances.
House Bill 557 and its counterpart in the Senate would not create a paid leave program, but it would enable the Commissioner of Labor and Workforce Development to ask for a one-time federal grant from the Labor’s Women’s Bureau and the Department of Labor to determine a comprehensive economic understanding of a paid leave program at the state level.
Others that have received such grants include Washington D.C., Montana, Massachusetts and Rhode Island, according to the DOL. The DOL has $1 million in existing funds to help states and municipalities conduct these feasibility studies in addition to the $500,000 the Labor’s Women’s Bureau has in existing funds. HB 557 would enable Tennessee to apply for a piece of the funding pie.
What This Means For Small Business
Small business is already faced with a tough regulatory environment from the burdens of the Affordable Care Act and more. A mandated paid leave program eliminates the flexibility that many small businesses depend on.
“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 schedules,” says Brown. “They also can lead to abuse or overuse by some employees.”
In past studies, mandates have been proven to create negative consequences, including layoffs, reduced hours for employees and higher costs, typically leaving the lowest earners to feel these hits hardest. After Seattle implemented its mandated paid leave policy, one in five businesses reported a cost-saving measure, exemplifying how negative these policies can be for both employers and employees. In Connecticut, an implemented paid sick leave program required 31 percent of businesses to scale back employee benefits to adjust for the new costs of the program.
“Paid sick leave legislation was introduced in Tennessee several times by members of the political party that previously controlled the executive and legislative branches,” says Brown. “It couldn’t pass then, and hopefully it won’t now or ever.”
