So Much for Spurring Small Business Growth
On the heels of Governor Gregoire’s announcement last week of her strategy to spur small business growth comes legislation that, if passed, would render the Governor’s commendable efforts futile.
SB 6229 and its companion, HB 2508, mandate paid sick leave and “safe” leave. The bills, scheduled to take effect January 1, 2013, require businesses that employ between four and 249 full time workers to give one hour of paid sick leave for every 40 hours worked per week, and businesses employing 250 or more to offer one hour for every 30 worked. Depending on the size of the business, workers could use anywhere from 40 hours of paid sick leave in a calendar year up to 72 hours. Employees could use these paid sick days for their own medical care, or to care for a child, grandparent, parent-in-law or spouse. Victims of domestic violence and stalking could also claim the paid time-off as “safe days.”
The costs associated with state-mandated paid sick leave would be staggering. A WPC analysis of Seattle’s new ordinance mandating paid sick days pegs the costs of implementation anywhere between $30 million and $90 million a year, and that is just the direct costs; indirect and compliance costs could be much higher. Now extrapolate those costs to every business in the state.
The added financial burden of this legal mandate would weigh most heavily on small businesses already struggling to survive Washington’s costly business climate.
The Governor wisely stated last week that, “If we can make it easier and cheaper for them [employers] to do business, they can afford to add more employees. This is the key to our economic recovery and to our social fabric.”
Mandating a costly employee paid sick leave benefit, over and above all the other top-down regulations, would not make it easier or cheaper for employers to do business or to afford to add more employees. Nor would it, as the bill claims, help businesses “operate competitively.” Only one state, Connecticut, currently mandates paid sick leave. Imposing sick leave rules would put Washington State businesses at a considerable competitive disadvantage.
The state’s small businesses agree. In September 2011 small business owners, entrepreneurs and policymakers from around the state participated in the Washington Policy Center’s Statewide Small Business Conference. The conference attendees identified 7 key policy reforms needed to improve the state’s small business climate, which will spur job creation and speed economic recovery.
On the list of 7 key recommendations by the state’s small businesses was the rejection of mandatory paid sick leave. The small business participants warned the one-size-fits-all mandate could come at the cost of a reduction in other valuable benefits, such as health insurance, telecommuting or a flexible work schedule.
