One of the biggest concerns of small business owners continues to be the paid and unpaid leave bills passing out of committee. In the Senate, the Healthy Workplace Act S.B. 2147 would require all employers to provide up to 7 paid sick days each year. The House passed H.B. 3297, creating the Employee Paid Health Care Time Act, requiring any employer of one or more to provide paid healthcare time at a rate of one hour for every 22 hours worked for an employer of 50 or more and one hour for every 40 hours worked for employers with fewer than 50 employees.
The Federal Government isn’t the only governmental body pushing paid leave. Several states and even the City of Chicago are considering paid leave for a variety of hardships, from bereavement to bone marrow and organ donations. A 2015 survey by NFIB shows that the vast majority of small businesses already offer some type of paid leave, with many offering up to 2 weeks per year.
New rules mandated by the Department of Labor could affect many small businesses, driving up labor costs and creating more red tape. These rules, effective on December 1, 2016, raise the salary threshold for eligible workers from $23,660 to $47,476 and to $134,004 for highly compensated employees. This means that salaried workers earning less than $47,476 will now be eligible for time-and-a-half for every hour they work beyond 40 hours per week. While the rules were intended to help millions of workers, they assume that every business will absorb the increased costs and pay overtime, rather than limiting hours for salaried employees.
Research by the National Federation of Independent Business shows that nearly half of all small businesses will be affected by the mandate. NFIB foresees a slowdown in productivity if salaried employees are forbidden from exceeding 40 hours per week. Another concern is that some employees may be converted from salaried to hourly, effectively receiving a demotion.
The rules also include a mechanism to automatically update the salary and compensation levels every three years in order to ensure that they continue to provide useful and effective tests for exemption.