Small Business Commission: Worker Protections Shouldn’t Hurt Businesses

Neil Ballard/Ingleside-Excelsior Light

The focus of the April 11 meeting of the Small Business Commission was the tension between social protections for workers on one hand and the cost of doing business for small and independent operators on the other. The issue was brought to the fore by newly instated paid parental leave legislation.

The passage of the legislation by the Board of Supervisors makes San Francisco the first city in the country to provide fully paid parental leave to workers by requiring employers with 20 or more employees to offer full paid leave to workers who are new parents. The State of California operates a worker-funded program that covers 55 percent of parental leave and the new legislation will make up the difference to offer full leave.

Governor Jerry Brown signed a bill this week that will raise the worker-funded coverage to 60 percent, and to 70 percent for workers making less than $20,000 annually. But members of the Small Business Commission argue that requiring employers to fund the gap is the wrong way to achieve a worthy goal.

Small Business Commission President Mark Dwight remarked at the March 28 meeting that paid parental leave, like the $15 minimum wage, is something that the commission supports but should be handled at the State or even Federal level. At the April 11 meeting, the commission adopted clarifying language to their statement of opposition.

That language in part reads: “Parental leave is a benefit that should be extended to all employees, no matter what size company they work for. Furthermore, the cost of the benefit should be funded collectively—not imposed selectively only on companies with employees qualifying for the benefit.”

“What I’m trying to get away from is putting San Francisco County—its small little walled garden—in a competitive disadvantage with all our regional counties,” Dwight said.

Dwight expressed disappointment that the commission was put in a position where it was advocating the exemption of small companies from the legislation.

“That was completely the wrong thing to be arguing about,” Dwight said.

The universal benefit of paid family leave should be available to all workers, just not the financial responsibility of certain employers, according to Dwight. For example, those employers with younger workforces who would be more likely to avail of the benefit.

Ted Egan, the city’s chief economist from the Controller’s Office of Economic Analysis, spoke about a possible alternative to the paid parental leave funding mechanism that could alleviate the financial burden to individual businesses.

The existing worker-funded state program works by collecting payroll tax into an insurance pool that is big enough to fund all valid claims, according to Egan. An employer-funded program could work the same way.

“An alternative funding mechanism could be a broader based business tax […] that would replace the employer’s individual responsibility” for compensating workers on leave, Egan said.

Other Business

  • Small business advocates Scott Hauge and Stephen Cornell spoke about their ideas for a proposed outreach program to better connect government and business people.
  • The Office of Small Business has hired a new Small Business Commission Secretary, Menaka Mahajan.
  • Muni is working with Mission Street merchants to address concerns related to the “red carpet” bus-only lane for the 14R line.

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