What’s keeping small business owners up at night? New bills in the Capitol
September 21, 2023
SBAM member survey shows trepidation for paid leave legislation that could decimate small businesses across Michigan
LANSING – Michigan’s small businesses already facing continually rising costs and a major talent shortage have a brand-new threat to contend with: mandatory paid family leave up to four months per year for all employees – a mandate that could decimate thousands of small businesses. Paid family leave policies, while good in theory, are especially punitive for businesses who employ a very small number of people. Those small employers are very worried about the financial and operational implications of the bills percolating in Lansing, according to a new survey released today by the Small Business Association of Michigan.
“Michigan’s small businesses have been through the wringer over the past several years, yet here they are facing a significant impediment to their continued success,” said SBAM President and CEO Brian Calley. “Most policymakers are quick to say they support small businesses – we need their actions to meet those words in the policies they pursue at the Capitol.”
More than 80 percent of survey respondents reported they cannot support a proposal to mandate paid leave of up to 15 weeks per year for all employees through a new tax. 70 percent of those respondents said if enacted, this paid leave policy would be extremely detrimental to their operations, with 20 percent indicating somewhat detrimental. 75 percent of respondents indicated they already voluntarily offer some paid leave for their employees.
“Voluntary paid leave for employees is something many small employers offer as they grow and are able to pay for increased benefits,” said Ginny Sherow, Owner of Fenton Winery and Brewery. “But in early stages, that’s not possible for most small businesses. If this one-size-fits-all mandate is put in place, it will guarantee many of Michigan’s would-be small business success stories never make it to reality.”
Jada Paisley, Executive Director of the Michigan Golf Course Association, said: “Many small businesses, especially those with seasonal workers, do not have the financial capability or employee reserves to be able to offer extensive paid leave policies. The paid leave proposal in Lansing as introduced would guarantee many businesses who employ seasonal workers in the tourism industry would be greatly impacted.”
The survey, conducted Sept. 13-18, of nearly 500 small businesses also revealed that 77 percent oppose proposed bills in Lansing to increase the weekly cash benefit for unemployment benefits and 80 percent oppose increasing the duration of unemployment, from five months to six.
In terms of other policy priorities during the abbreviated legislative session this fall, surveyed members were asked: what areas should state government prioritize to make Michigan a better place to operate a small business? The number one answer was tied between “lower taxes” and “improving our educational system.” Other major priorities were reducing regulations, expanding the workforce, increasing access to secondary education, including the trades, improving infrastructure, and expanding childcare options, respectively.
More than 75 percent of small businesses surveyed also stated they have increased compensation by 5 percent or more over the past year.
Michigan already mandates paid medical leave for employees, however the law exempts small businesses. Eleven states have laws that mandate paid family medical leave.