Proposed Sick Time Law Could Impact Small Businesses

Proposed Sick Time Law Could Impact Small Businesses

In his recent State of the Union address, President Barack Obama called on Congress to pass a bill that would ensure some paid sick leave for all workers regardless of their job status. However, experts generally say that this could be a major issue for employers, particularly ones that do not have many employees.

Specifically, Obama called for a bill that would guarantee every American worker seven days of paid sick leave per year, so that if they had an illness – or one of their family members did – they could be assured of missing work to care for them without facing a financial hit, according to a report from National Public Radio. Those in the business sector see this as problematic because many companies might not have the flexibility to extend workers that kind of leeway, even if it’s federally mandated and they can plan for it, without facing a significant impact to their bottom line.

Consequently, it may prompt companies – particularly smaller ones – to scale back other benefits they extend to their workers as a means of covering the added cost, the report said. That, in turn, could make them less competitive when it comes to trying to attract new employees down the road.

The other side of the argument
However, those outside the business sector say that this kind of thing is often vital for workers, particularly those who have lower incomes to begin with, the report said. And while no one is discounting the impact that this could have on companies’ bottom lines, the fact of the matter is that studies show small businesses aren’t affected nearly as much as they might think.

“With paid family leave, there was all this same sort of alarmist rhetoric about how this was going to be a disaster, especially for small businesses,” Ruth Milkman, a sociologist at the City University of New York who has studied this issue specifically, told the news agency. “Actually, in that study we found that small businesses were more positive than the larger ones about the program.”

That doesn’t mean such issues don’t need to be planned for from a financial point of view. As a consequence, owners might want to consider the ways in which their companies approach all their costs, including those for small business insurance. For instance, if they can cut their premiums for general liability insurance, that could free up thousands of dollars annually.