October 9, 2023
NFIB California Main Street Minute, October 9-13
Welcome to the October 9-13 edition of the Main Street Minute from your small-business-advocacy team in Sacramento.
Yesterday’s Games Not the Only Passing and Blocking Going On- Gov. Gavin Newsom spent a good part of his Sunday (October 8) signing or vetoing bills, two of which were on NFIB’s bill list. One bill, Assembly Bill 258 (Reyes), a rare good one for small business, will bring a bit more transparency to the Go-Biz website. The other measure, Assembly Bill 647 (Holden), he signed into law is not such good news for grocers buying a previous grocer’s establishment. More about the bills can be read by clicking the bill links.
- Speaking of NFIB’s bill list, of the 58 NFIB narrowed down as the most impactful on small businesses from the 3,030 measures introduced this year, the fate of all but 12 are now known. NFIB will report on the outcomes of the dozen measures in next week’s Main Street Minute. Spoiler Alert: None of them are good for small business. This Saturday, October 14, is Governor Newsom’s last day to sign or veto bills—or, as is sometimes forgotten, let them become law without his signature.
- With Gov. Newsom’s signing of Senate Bill 616 into law on October 4, employers will now be required to offer five days of paid sick leave, up from its current three days. The new law also changes accrual calculations.
- Given the dynamics swirling around California’s political climate now, the signing was not a surprise to business groups, including NFIB, which, along with its coalition partners had asked for a veto of SB 616, arguing “that those businesses that can afford to offer more than three days of sick leave are doing so, but many, many businesses cannot absorb that cost. These mandated, increased labor costs will inevitably either be passed on to consumers as higher prices for goods and services, or force employers to reduce jobs or cut wages or other benefits.”
- California is one of 16 states with a paid sick leave law, and one of 11 states with a paid family leave law, according to the National Conference of State Legislatures. Seven California cities (Berkeley, Emeryville, Los Angeles, Oakland, San Diego, San Francisco, and Santa Monica) have their own paid leave laws offering even more time off.
- As a reminder, the federal Family Medical Leave Act (FMLA) offers up to 12 weeks of leave time, but that is unpaid.
- NFIB thanked Governor Newsom for vetoing Senate Bill 799, the horrendously bad idea to extend unemployment benefits to workers who are already employed but want to make sure their meal tabs are covered should they go out on strike.
- The idea may be dead for the year but doesn’t look dead for the session and may make a comeback next year if this tweet from Lorena Gonzalez Fletcher, the state’s top Labor leader, is any indication:
“Don’t get distracted.
“Gov Newsom has vetoed 3 important labor bills, including labor’s collective highest priority bill – #SB799.
“We must continue to organize & fight & demand respect for all workers, especially those who are striking to fix an economy that has failed us.”
- Should the idea, in the form of a bill, resurface in 2024, NFIB will put up the same vigorous fight against it that it did in 2023. But in the interest of spirited debate, let us suggest to proponents that their idea might have a little more salability if California showed some interest in paying down, or off, the more than $18 billion in UI loans it still has outstanding with the federal government. We’ll see about that, but we’re not holding our breath.
- Worth remembering. From CalMatters’ Dan Walters:
— “The state borrowed money from the federal government during the Great Recession because its Unemployment Insurance Fund, or UIF, had virtually no reserves. When the state didn’t repay the loan, the feds hiked payroll taxes on employers and it was finally retired in 2018.
— “Two years later, when Newsom ordered businesses to shut down during the pandemic, unemployment soared and once again the state borrowed about $20 billion to pay benefits, most of which is still owed.
— “California’s unemployment insurance program is running an operational deficit even during this period of relatively high employment and is the least solvent of any state unemployment fund. The UIF has been unable to build reserves because of a chronic political stalemate between unions and employers over benefits and the payroll taxes to pay for them.
— “It began when former Gov. Gray Davis and the Legislature drained what had been a healthy UIF reserve to sharply increase benefits, leaving it incapable of handling an economic downturn.
— “If another recession hit the state, it would almost certainly be forced to borrow even more money to maintain benefits, even though it still has heavy debt from the previous recession.
— “This political mismanagement of a system that protects millions of Californians from economic ruin is – or should be – a huge embarrassment.”
- A Recession?
— From CalMatters’ economy reporter Levi Sumagaysay:
— “The Legislative Analyst’s Office isn’t ‘necessarily in the business of calling a California recession,’ said Brian Uhler, deputy legislative analyst — but it is sounding an alarm about a looming downturn.
— “The office wrote this week: ‘Our primary indicator, which combines data on unemployment, inflation, home sales, and bond markets, has been giving a warning signal for a little over a year.’”
NFIB California in the News- Because the clock is ticking away on the deadline for the governor to sign or veto bills, NFIB California has been busier than usual providing the media with small businesses’ side of the story on legislation.
- What happens in California has national import, which is why of late, the Associated Press, Fox News, Bloomberg Law, and The Epoch Times – just to name a few media whose stories reverberated around the nation — have been interested in getting NFIB California’s opinion on the affairs of the day.
- For a sampling of the media NFIB has earned locally and nationally, click here.
- On October 5, NFIB’s Research Center released the September jobs report, which showed 43% of small business owners (seasonally adjusted) reported job openings they could not fill in the current period.
— Chief Economist Bill Dunkelberg said, “Small business owners have spent the first three quarters of 2023 working to recruit and retain qualified employees for their businesses, but it still remains a top challenge. Owners continue to raise compensation to attract the right employees.”
- On October 4, the U.S. Supreme Court heard oral arguments in the case Acheson Hotels, LLC v. Laufer.
— NFIB filed an amicus brief in the case. Executive Director of NFIB’s Small Business Legal Center Beth Milito said, “Small businesses do everything in their power to provide for their customers’ needs while operating within the parameters of federal and local regulations, including the Americans with Disabilities Act (ADA). Despite their efforts to comply, most small business owners do not have the resources to navigate the unclear requirements for business websites where the ADA is concerned, nor do they have the resources to combat costly litigation brought by self-appointed ‘testers’ based on arbitrary, hypothetical non-compliance. NFIB asks the Supreme Court to stop the weaponization of the ADA against well-intentioned Main Street businesses.”
- On October 3, the U.S. Supreme Court heard oral arguments in the case Consumer Financial Protection Bureau v. Community Financial Services Association of America, Limited.
— NFIB filed an amicus brief in the case. Executive Director of NFIB’s Small Business Legal Center Beth Milito said, “Small businesses are disproportionately affected by onerous regulatory costs and burdens, such as those imposed by the Consumer Financial Protection Bureau. The CFPB can operate its wide authority through federal funding outside the traditional congressional appropriations process, without any oversight. NFIB urges the court to provide targeted and meaningful relief by affirming the lower court’s ruling.”
Next Main Street Minute October 16.
NFIB is a member-driven organization advocating on behalf of small and independent businesses nationwide.
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