The National Federation of Independent Businesses/New York, the state”™s largest small-business organization, is fighting two state initiatives that it claims would be detrimental to its members: the proposal by Gov. Eliot Spitzer to resurrect a 12-week paid family leave bill, which despite his support failed to pass the Senate last year, and legislation introduced by Assembly Speaker Sheldon Silver to increase the state”™s minimum wage.
NFIB/NY recently conducted a poll among its 10,000 members on the two initiatives, which indicated overwhelming opposition to both measures. Ninety-two percent of respondents opposed the paid leave proposal. “Most of the businesses we represent have five or less employees, and they can”™t afford to have 20 percent of their workforce gone for a fourth of the year,” said NFIB/NY director Mike Elmendorf. “We think it”™s bad public policy. It”™s one more burden on business.”
As proposed by the governor and passed by the Assembly, the paid family leave bill would have required every private employer to allow an employee who needs time off to care for a newborn child or seriously ill family member to take up to 12 weeks of paid leave. The bill basically piggybacks on the federal Family and Medical Leave Act, passed during the Clinton Administration, with an important difference, said Elmendorf: While the federal leave act exempts companies with fewer than 50 employees, the state proposal would apply to every small business.
Another difference: The federal leave act is for unpaid leave only. While it protects an employee”™s job during a forced personal absence, it doesn”™t include any compensation. Only two other states have implemented a paid-family leave mandate: Washington and California.
The paid leave proposal would be an extension of New York”™s Temporary Disability Insurance (TDI) program, which currently covers paid leave in instances where workers themselves are unable to work due to a disability. Workers would pay a small tax on their paychecks to fund the initiative. The proposed family paid leave would be limited to $170 a week.
Elmendorf said one issue for his organization is that the bill loosely defines the circumstances under which a worker would qualify to take paid time off. “That”™s a real problem for a small employer,” he said. “I think (the proponents) are underestimating the number of people who would take the benefits.” He said as it is, small businesses are able to work out satisfactorily their own arrangements with an employee. Small business owners “are reasonable people and value their employees. They make an accommodation 90 percent of the time.”
But Jen Fuentes, coordinator of the Hudson Valley Area Labor Federation based in Newburgh, said mandating paid family leave is critical to working-class people. “The reality is workers need to take medical and family leave,” Fuentes said. “We see people needing to care for an elderly parent or very young children. Employers have to address this reality with some type of accommodation.”
Furthermore, the paid leave would be funded by employees, so there would be no fiscal impact on employers, she said.
But Elmendorf said there would still be a cost to businesses. “There are costs beyond the weekly benefit,” he said. “Businesses would have to pay for the record-keeping and reporting that are necessary if it becomes law.” He also cited the standard costs of making up for the employee”™s absence.
The NFIB/NY also polled its members on a proposal by the Assembly to increase the state”™s minimum wage. The proposed legislation would increase the wage to $7.75 per hour in 2009, $8 in 2010, $8.25 in 2011, and thereafter index it to the consumer price index.
Eighty-three percent of respondents opposed increasing the minimum wage above the federal minimum wage, and 67 percent oppose yearly increases in the minimum wage by indexing it to the consumer price index.
The current state minimum wage is $7.15, which exceeds the federal minimum wage of $5.85. The federal minimum wage will go up to $6.55 this July and be increased in 2009 to $7.25.
“The minimum wage increase would up the cost of labor,” said Elmendorf. “Workers who aren”™t making the minimum wage would think they should be making more. It would put us at a disadvantage compared to other states.” Thirteen states currently have minimum wages that equal or exceed the New York amount.
Elmendorf said the higher wage would also negatively impact the economy, since “when you increase the minimum wage, you”™re decreasing employment. Fewer people are hired.”
Fuentes countered that the minimum wage needs to keep pace with the cost of living. “So many people are working for the minimum wage that it should be tied to a basic standard of living,” she said. And by indexing the wage to inflation, “you don”™t have to fight the same battles over and over again.”
She said the business lobby”™s dire predictions about the impact from increasing the minimum wage last year didn”™t pan out. Since the wage went up, “I don”™t know of one case study in which a business was driven out because of the new minimum wage law,” she said. “The sky is falling every time we ask for basic dignity and respect for workers. We need to balance that with the needs of business. This bill accommodates both sides.”
