Family leave law is big news for small businesses – Twin Cities

Things are starting to get a little easier for Minnesota families balancing work and life issues. The state’s first family medical leave law passed Congress last week after a never-ending series of amendments.

Conversely, things are becoming a little more complicated for companies balancing workforce and productivity issues.

The new law grants up to a total of 20 weeks of paid leave per year for eligible medical and family reasons for individuals, with weekly pay ranging from about $200 to $650, depending on the worker’s salary. becomes.

The payments themselves come from payroll tax state funds raised for this purpose and are paid by state government agencies, similar to the unemployment insurance payment process.

As the whole FMLA landscape is still relatively new, it is difficult to predict the long-term impact of the program. The US government mandated his FMLA 30 years before him, but federal law excludes many employers and makes wage substitution optional. (For more information: https://www.dol.gov/agency/whd/fmla/faq#1)

Meanwhile, only a few other states (including California, Colorado, Connecticut, Delaware, Massachusetts, Maryland, New Jersey, New York, Oregon, Rhode Island, Washington, and the District of Columbia) have their own FMLA laws. This is uncharted territory. .

In Minnesota, private sector opposition to the bill comes primarily from leaders representing small businesses.

Their concerns don’t seem to center on the relatively modest payroll tax of 0.7%. For a worker earning $50,000, the annual cost would be $350. This amount can be paid in full by the employer or split 50/50 with the worker. Minnesota employers with fewer than 30 employees can also apply for “premium relief” and will probably not be paid for this at all.

A greater concern for smaller employers centers around the length of leave allowed and the requirement to rehire employees at the end of leave, although this standard is not exempt regardless of employer size.

That’s the situation.

And here’s the question: Is this good or bad for Minnesota? As an employer and worker adviser, my answer is:

Assuming we use powerful data analytics to determine what happened in the years after this law came into effect, we may find the answer sometime in the future. That said, there are some things I can now predict with certainty.

First, proponents of the bill have used historical data to argue that the FMLA is underutilized and that the average US protective leave is six weeks, but not based on Minnesota law. I am confident that utilization will be higher than the national average. It is a matter of course. Leave is paid, not unpaid, and employers are not exempt.

Second, as career advisors to help workers make difficult decisions, we can predict that some will probably not return from vacation longer than expected. This just happens. Leave reasons such as pregnancy or the weakening or death of a parent are often life-changing, and workers gain a different perspective through these experiences.

Third, small businesses will really struggle. Imagine a marketing company where an employee has 12 to 20 weeks of paid vacation, he has 10. The company has a highly skilled employee in charge of a very specific customer task, and they must fill in for this employee while also securing a job to return to work.

how to do You can hire contractors, but can you quickly find one with the skills you need? Uka You can hire new workers, but what do you do with the original workers when they come back?

These are big issues for small businesses, where owners are likely to be paid less than their staff while serving as HR-Finance-Compliance-Client Services Director. Companies with fewer than 10 employees make up about 20% of Minnesota’s employer base. Having been to rodeos before, I would expect that if this gets too complicated there will be even more reliance on contract or outsourced workers or other workarounds that limit permanent employment.

Going back to my earlier question, is this a good thing or a bad thing for Minnesota? As an employer, I really don’t know. As a career adviser, I can only say so. I would like to learn this law firmly and advise my clients. As their advocate, I will help them get the most out of her FMLA. No doubt they would benefit from additional support in dealing with this thorny problem at a crossroads. I am grateful for that. The rest? Ask me again in a few years.