April 19, 2019
Contributors Latest News | Mueller Investigation | Bangor Metro | Opioid Epidemic | Today's Paper

Paid sick leave will raise costs for small businesses — and they can’t afford it

George Danby | BDN
George Danby | BDN

Sen. Rebecca Millett’s Dec. 20 BDN column promoting mandatory paid sick leave represents what many businesses fear as we enter the upcoming legislative session — an opening salvo onto Maine’s small business community that will further increase the cost of doing business for our struggling rural employers, yet another effort that forces us to expend resources battling a proposal that sounds good on the surface but in reality would hurt a lot of Mainers.

Let’s be clear at the outset: Most Maine businesses provide their employees with some kind of leave, paid in most cases, such as vacation, holiday or sick time. Some of that leave is designated as “paid time off,” or PTO, which workers are free to use in any manner. More businesses are adopting this form of leave as they are freed from managing worker leave while providing their employees with greater flexibility. Additionally, Maine passed a law in 2005 that allows employees to use any type of employer-provided paid time off to care for a sick family member.

So if a business is not providing paid sick time, it’s either because they provide PTO or they cannot afford to do so. The Legislature mandating they do so isn’t going to make it any more affordable.

We don’t know exactly what the new mandatory paid sick leave proposal will look like, but we know from experience that it will present problems, not the least of which is the law will apply to all employers regardless of size. It likely will allow full- and part-time employees — like the 16-year-old bagging your groceries — to accrue the leave, something many businesses don’t do.

It should not be lost on anyone that starting Jan. 1, Maine’s minimum wage will increase once again. Since 2016, wage and hour costs have increased $3.50 per hour for all Maine businesses. The blow has been particularly hard for Maine’s small mom and pop businesses. And as predicted, the hourly threshold is having a negative impact on small businesses and nonprofits. In conversations with small businesses, problems cited include reducing hours open for businesses, reducing hours for employees, and layoffs — not to mention an increase in the costs of goods and services to consumers.

On top of these wage and hour costs is the skyrocketing cost of health insurance premiums experienced by small employers and their employees. The fact is, our businesses’ resources are limited. They will not be able to absorb the costs associated with mandatory paid sick leave. The options they will face are: eliminating or reducing other forms of leave currently, and voluntarily, provided to workers; reducing costs in other benefit areas, like employer contributions to health care premiums; putting off creating a new job or returning a laid-off worker to work; or, laying off employees to cover their costs.

Millett is correct. Maine is competing for jobs, workers and opportunities with the rest of the nation. But to attract workers here, it is about more than offering them benefits; it’s about offering them jobs first. And if Maine businesses have to reduce hours worked, benefit packages or the number of available positions they have to offer to accommodate the costs associated with mandatory paid sick leave, then what good does the benefit do in the first place?

We agree with Millet that Mainers work hard. But often forgotten in the discussion is who those Mainers are. They are thousands of small business owners across the state who right now are struggling to make ends meet under current economic conditions, in addition to paying their employees. We all want businesses and their workers to prosper. So while it’s easy to point to some national statistics to justify a new and expensive cost of doing business here that sounds good on the surface, those think tanks simply do not understand Maine or Maine small businesses.

Peter Gore is executive vice president of the Maine State Chamber of Commerce.

 



Have feedback? Want to know more? Send us ideas for follow-up stories.

You may also like