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Monday, November 17, 2008
Family Leave Act to expand and include very small businesses—Do you agree or disagree?
I recently spoke at the Sumner's Public Policy Conference in Dallas, TX where some of the brightest young men and women engaged in public policy discussions. To name just some of the attendees: students from the University of Dallas, University of N. Texas, Howard Payne, Schreiner University, and Austin College all responded during Q&A with intelligent and insightful dialogue. I lectured about the work I am currently doing with the Family Policy Center.
During the panel discussion with Dr. Betty Spence, President of the National Association of Female Executives, the discussion turned to the Family and Medical Leave Act (FMLA). Dr. Spence informed the students that the Obama Administration wants to expand the act to cover businesses with 25 or more employees and she believes this is a great move (the FMLA to date, applies to all private-sector employers who employed 50 or more employees in 20 or more workweeks in the current or preceding calendar year and who engaged in commerce or in any industry or activity affecting commerce, and public agencies, including: state, local, & federal employers, local education agencies-schools). The act provides employees with 12 weeks of unpaid family or medical leave during any 12 month period.
Obama desires to expand the FMLA and make some modifications to include: allowing workers to take leave for elder care needs; allowing parents up to 24 hours of leave each year to participate in their children's academic activities at school; allowing leave to be taken for purposes of caring for individuals who reside in their home for 6 months or more; and expanding FMLA to cover leave for employees to address domestic violence and sexual assault.
President-Elect Obama wants to expand paid sick days. Half of all private sector workers have no paid sick days and the problem is worse for employees in low-paying jobs, where less than a quarter receive any paid sick days. Barack Obama and Joe Biden will require that employers provide seven paid sick days per year. Finally, Betty informed the students that Obama wants to encourage states to adopt paid leave. As president, Barack Obama will initiate a 50 state strategy to encourage all of the states to adopt paid-leave systems. Obama and Biden will provide a $1.5 billion fund to assist states with start-up costs and to help states offset the costs for employees and employers.
My response during the Sumners lecture to Betty was noted in this way: At a time when the country's economic stability and financial institutions stability is in question and unemployment is rising, the last thing small business owners need to face from government is more cost to their bottom line. I believe MOST EMPLOYERS want to do what is right for their employees. They want the flexibility to negotiate time off with their employees AND they want to allow their employees some of the same benefits that federal government workers enjoy…for example, allowing the private sector workers the choice to choose between compensatory time off in lieu of overtime wages. If the FMLA is expanded to include a business with 25 employees, we will become the 24 Society. Small employers will hire up to 24 workers and utilize temporary employees to cover the work load or spread the load on two or three employees. This causes stress in the workplace and allows for minimum flexibility.
How do you feel about being required to pay employees 7 days of sick leave? Any predictions about what modifications of FMLA will have on small business? Please share your thoughts…Your voice matters!!!
November 17th, 2008 at 3:00 pm
You are so correct, and the 24 Society is exactly what will happen, as will inefficiencies created by having to run a business that way.. In addition to the already burdensome expense of even having employees, the small business employer is now often, and would be for sure under this new plan, forced to hire an additional employee(s)- or professional services - to handle the overwhelming bookkeeping associated with these rules. Of course, employers want to do the right thing for their employees, but they need to be able to make money for themselves as well, and these proposed rules amount to being confiscatory.
November 17th, 2008 at 4:43 pm
I intend to keep my company small enough to avoid being covered by FMLA.
November 18th, 2008 at 12:11 pm
I agree totally with you, Terry. And it may get even worse.
In a conference call last week with Society of Human Resource Managers National Legislative Director, Mike Aitken, he said that the President-elect wants to have 8 weeks PAID FMLA.
Small businesses are already hurting and the last thing we need is more mandates. To pay for these mandates, we will have to cut staff or other benefits. What would help would be tax credits for various benefits. Reward rather then punich.
November 18th, 2008 at 3:50 pm
Well, call me a contrarian, but I actually think it may be a good idea to lower the threshold. As it is, firms with employees represent less than a quarter of all businesses in the country. According to Census data, firms with 50 or more employees comprise less than 1% of all businesses in the country - although they employ 72% of all workers. Lowering the threshold to 25 employees would affect 1.6% of the business population (370,000 firms) but would extend leave benefits to an additional 11 million workers (1% more of the workforce). I do agree with Joan, though, that incentivizing rather than requiring would be a more palatable approach.
November 19th, 2008 at 1:19 pm
I agree with you Terry. Why are we even discussing this topic as it has nothing to do to improve the economy. It is silly. Thank you.