>>>>> NFIB PAYCHECK ELIMINATION PACKAGE BILL SUMMARY <<<<<
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NFIB testified in the Capitol on April 13th before the House Labor Committee in opposition to 16 new bills announced and introduced only the day before, HB 4390 – HB 4406, that would drastically hike penalties against small business owners for violations of wage and benefits laws, limit the use of independent contractors, and significantly encourage whistleblower allegations, among other onerous provisions. The package includes $5 million for the attorney general to hire 25 new employees for enforcement.
“Governor Whitmer and the legislative majorities seem to think moving Michigan forward means not only reverting to the failed economic policies of the past with their recent Right-To-Work repeal and costly prevailing wage regulations, but also breaking new ground with additional anti-business legislation on the wish list of Big Labor,” said NFIB State Director Amanda Fisher after her testimony on behalf of the more than 10,000 small and independent business owners in Michigan who are NFIB members “The latest bill dump is not the agenda of lawmakers who value Michigan’s Main Street businesses and their workers. This legislative package is harmful to small business, free enterprise, and Michigan’s economic health. This so called ‘payroll protection act’ should be named the ‘payroll elimination act.’”
During her testimony, State Director Fisher spoke about aspects of the bill package related to lawmakers’ concerns with wage theft and the misclassification of independent contractors. Fisher told the committee that, “NFIB and its members believe that employers should absolutely pay their employees according to the law. However, these bills aren’t holding those bad actors accountable. These bills narrowly constrict the definition of an independent contractors. Currently, small business owners who cannot afford or do not have enough work for fulltime employees are able to use independent contractors as long as they meet the standards established by the Department of Labor. In fact, many small business owners work AS independent contractors. The new definition taken from California Law would make it nearly impossible for anyone to be an independent contractor in Michigan, even if that is what they want to do.”
Fisher noted that this issue is often considered a construction issue, but the proposed law is broad and would include truck drivers, medical professionals, hair stylists, and gig workers such as ride share and grocery delivery, among others.
“In addition, this bill and others in the package presume the employer is guilty, and they must prove they were in compliance and are all subject to civil action,” Fisher testified further on the proposed bills. “This increases fines and penalties from a maximum of $1000 to $10,000 and includes some violations as felonies. Two bills in the package create laws that block employers from having the opportunity to know who has filed a complaint against them, preventing a small business owner from being able to defend themselves. Another bill would require employers to provide employees and prospective employees with the salary and benefit information of other employees in similar positions.”
“All told, this new assortment of bills will place onerous new burdens on small businesses that will cost time and money, and ultimately jobs and closures,” remarked Fisher after the hearing. “If passed into law, Michigan’s small business owners and entrepreneurs will be presumed as bad actors to regulate and investigate and sue. That is not an environment that creates jobs, innovation, and recovery. NFIB will work tirelessly to educate lawmakers about this harmful legislation.”