Small business owners know that employees are their most valuable resource. Small business owners work hard to train and retain employees by creating a rewarding workplace. Finding qualified employees has been small business owners’ top business problem since 2019. However, government mandates and regulations have made labor issues and the ability to fill open positions more complicated than ever.
Small businesses operate differently than large businesses; they do not have human-resources departments to track the changing standards and rules that affect their workforce and workplace.
NFIB urges Congress to eliminate burdensome mandates and prevent cumbersome regulations that inhibit job creation.
Paid Sick Leave and Paid Family Leave
Multiple proposals before Congress would mandate paid sick leave and paid family medical leave mandates on small businesses. The Build Back Better Act contains an inflexible four-week federal paid family leave program that would pose challenges to small employers trying to manage and maintain their workforce.
Other proposals would mandate ten days of paid sick leave and up to 12 weeks of paid family and medical leave on all employers, similar to the temporary requirements from the Families First Coronavirus Response Act (FFCRA) of 2020. These requirements are unfamiliar to smaller employers with fewer than 50 employees who are not currently subject to the unpaid leave mandates of the Family and Medical Leave Act.
The PRO Act will significantly restrict the rights of small business owners to contract freely, compromises the privacy of millions of Americans, and exposes small businesses to costly boycotts and protests.
Small business owners know that more than doubling the federal minimum wage would lead to increased labor costs and tough choices. They must either increase the cost of their product or service or reduce labor costs elsewhere. The reduction in labor costs would be achieved through reduced jobs, reduced hours, or reduced benefits.
NFIB opposes the Raise the Wage Act because 92 percent of NFIB members opposed an increase in the federal minimum wage to $15.00 per hour by 2024 and annual increases in subsequent years in a recent member ballot. In March 2021 the Raise the Wage Act was considered in the U.S. Senate as an amendment to the American Rescue Plan Act and the amendment was rejected in a vote of 58-42.
Independent Contractor Classification
It can be difficult to determine whether a worker should be classified as an “employee” or an “independent contractor,” but it is an important distinction to make to avoid fines and legal challenges. For small businesses that don’t have the same resources as larger corporations, this can be even more difficult when there are not clear rules for classification.
The National Labor Relations Board (NLRB) is considering its current standard for determining independent contractor status of workers in The Atlanta Opera, Inc. case. NFIB filed an amicus brief at the NLRB opposing a stricter standard that would make it more difficult for small business owners to comply.
NFIB is tracking updates to the classification process, as well as regulations being proposed. To learn about the latest action on this issue, click here.
Build Back Better Act
The Build Back Better Act legislation proposed to substantially increase fines on small employers for overtime, minimum wage, OSHA, and National Labor Relations Act violations. These fines would have been large enough to put a small employer who made a one-time mistake out of business. Fortunately, while this legislation passed the House, it was dramatically changed in the Senate and these fine increases were dropped. They could come back in future proposals.