October 21, 2020

The Agenda: Paid Sick Leave Has Some Business Owners Feeling Ill

The Agenda

How small-business issues are shaping politics and policy.

When the advocates at Family Forward Oregon sought to muster support among businesses in Portland for a local paid sick leave ordinance, they found a sympathetic ear in Tony Fuentes. Mr. Fuentes and his wife operate Milagros Boutique, which sells cloth diapers and clothing for babies and children on Portland’s northeast side.

“The idea that 80 percent of low-income workers don’t get a minute of protected time was not in line with my view of the country, or of the social compact,” Mr. Fuentes said, who testified in favor of the bill at a council hearing.

But to judge by the efforts of local business organizations in Portland and in New York City, which is poised to pass its own paid sick leave law, as well as from interviews with a handful of businesses, the more common response is hostility, or at least wariness.

Portland’s new law, which passed the City Council in March, follows a template set by a handful of other cities, and Connecticut, in the last seven years. (In Philadelphia, a similar proposal could not overcome a veto by the mayor.) Businesses with at least six employees have to provide one hour of paid sick leave for every 30 hours an employee works, up to 40 hours a year, as well as protect the employee’s job. Companies with five or fewer employees must offer the same amount of unpaid, job-protected time off. An employee must work at least 240 hours before becoming eligible. In Portland, the law takes effect in January.

Mr. Fuentes said that he already offered paid time off to all of his employees (the number fluctuates between five and seven). They can use the time for any purpose, he said, and he has found that offering the time has added just 1 percent to his total labor expense. “The costs are pretty minimal,” he said, “and, talking with other businesses in Portland doing the same thing, our costs are line with theirs.”

Because Mr. Fuentes has a paid time-off policy that is at least as generous as what the city will soon require for sick leave, he will not be affected by the new law. But whether a business owner supports the law does not necessarily turn on how much strain the law will put on the company. Family Forward Oregon also tried to press Lisa Schroeder, owner of Mother’s Bistro and Bar into service for paid sick leave. Ms. Schroeder also offers paid time off and may have seemed a promising candidate to be a public face for the measure, since she is well known for her liberal views on other issues. But Ms. Schroeder demurred.

“I believe in it,” she said. “However, in my business, there’s a lot of ‘brown bottle flu,’ so you have people who call in because they had a rough night the night before.” Ms. Schroeder said she offered paid sick leave in addition to vacation days for employees who are “legitimately sick” — “I have the right to reserve judgment” — and she had hoped the ordinance would require a doctor’s note, but others called that a hardship for employees.

In the end, she said, “I just chose to stay neutral and let the chips fall where they may.”

Debbie Kitchin, a contractor who runs Interworks, a Portland remodeling business, worries about the paperwork associated with the law. Ms. Kitchin provides paid time off for her three full-time workers, but not for her crew of part-timers, which this year has ranged from one to three — she said she wasn’t sure whether the law would require her to offer paid leave. (Lisa Frack, spokeswoman for Family Forward Oregon, said that question would be resolved when the rules to carry out the law are written this summer.)

“For some of our people that we’ve brought in part time, they might work 20 hours one week and four hours the next week,” she said. “And our payroll software doesn’t really track the benefits by cumulative hours. It tracks them by pay period, or by month, which adds to the cost.

“By itself, it’s not the end of the world. But do you know how many other things there are like this? It’s the cumulative effect of all these little things,” she continued. “In my field, there are contractors who not only won’t do this but don’t even pay payroll taxes, liability insurance. They don’t get licensing and bonding. So this is just one more burden to businesses that are trying to follow the rules.”

Ms. Kitchin, who testified against the ordinance in a council hearing, said that next year, she might rely on a staffing agency or have her current employees work longer hours rather than hire additional part-timers, though she acknowledged that both of these alternatives would add to her costs as well.

For businesses like Ms. Kitchin’s, the bill in New York City promises a somewhat lighter touch than the Portland ordinance. Should it become law — it is likely to come up for a vote in two weeks — only businesses with at least 20 employees will be required to offer paid leave when it takes effect in the spring of 2014. A year and a half later, the threshold will drop to 15 employees. Businesses with fewer employees would still have to offer unpaid leave and job protection.

Jason Chung, who owns a Key Food supermarket in Forest Hills, Queens, that employs about 35 people, called the proposal undue interference. “Lawmakers should leave those kinds of things to the business people,” he said. Mr. Chung does not offer paid sick leave or time off now, but, he said: “If somebody’s sick — they have a legitimate excuse, a doctor’s note — oftentimes we give them full pay. So we don’t have to be told to do it.”

When asked if the rule would raise his costs, Mr. Chung, who is considering opening a second store, paused. “Not as much as Obamacare,” he said. “But I know Obamacare will have a big impact on the business.”

Article source: http://boss.blogs.nytimes.com/2013/04/29/paid-sick-leave-has-some-business-owners-feeling-ill/?partner=rss&emc=rss

You’re the Boss Blog: Among Small-Business Advocates, Reaction to President’s Plan Is Mixed

The Agenda

How small-business issues are shaping politics and policy.

Advocates for small business — including those in Congress — had near uniformly mixed reactions to President Obama’s proposal Friday to temporarily elevate the Small Business Administration to a cabinet agency but then fold the S.B.A. into a super trade and commerce department. Uniformly mixed in that most people The Agenda contacted praised the decision to make the S.B.A. part of the cabinet but expressed caution about the consolidation proposal.

The president called for merging the S.B.A. with the Commerce Department and four trade-related agencies into, as the president put it in a speech on Friday, “one department, with one Web site, one phone number, one mission: helping American businesses succeed.” In a conference call with reporters, Jeff Zients, deputy director for management at the Office of Management and Budget, said the prospective new department would comprise four broad “pillars.” Small business and economic development would be one of those pillars, and the S.B.A would be combined with economic development programs at other agencies into one of those mission areas. (The other pillars would be trade, technology and innovation, and statistics.)

As for concerns that the new agency might dilute the S.B.A.’s authority to speak for small business inside the government, Mr. Zients seemed to suggest that all American businesses might have to ally in a global economy. “This integrated department will be about serving America’s businesses — small, medium and large — as they compete in the global marketplace,” he said.

Once the agencies are merged, Mr. Zients added, the S.B.A. would lose its seat at the president’s table. “Once we have consolidation authority, once this specific proposal passes,” he said, “we will have one integrated department that is led by a secretary who will be on top of all of the important assets and services that serve businesses.” The United States trade representative, whose office would be merged into the new department, would retain a separate cabinet position.

Leaders of the small-business committees in Congress said in separate statements that while they supported streamlining government, they would review the president’s plans carefully. “The details will be critical,” said Senator Olympia Snowe of Maine, the top Republican on the Senate Small Business Committee. “Of particular concern will be ensuring that entrepreneurs do not face new hurdles in obtaining assistance in starting, operating or expanding their small businesses — whether accessing capital, pursuing exporting opportunities, or contracting with the federal government.”

Outside Congress, most small-business advocates treaded with similar care. “On the one hand, reorganizing federal agencies to create a ‘one-stop-shop’ for America’s small businesses could streamline processes and make accessing information and assistance much easier,” Todd McCracken, chief executive of the National Small Business Association, said in a statement. “On the other hand, such a reorganization could minimize the emphasis placed on small business by the federal government and lead to an even greater imbalance toward promoting the interests of large businesses over those of small business.”

John Arensmeyer, chief executive of the Small Business Majority, a group initially formed to back the administration’s health care reform, said: “Right now small business has an independent agency that reflects its needs. The obvious concern is that by bringing this into larger agency there’s a risk that some of that voice gets lost. We know that government is held in very low esteem by small business, but the S.B.A. is an exception to that right now.”

There were some stronger views. For example, the American Small Business League, which protests the diversion of federal contracts for small business to large corporations, sided firmly with the other hand. “This is not a move to save money,” said the league’s president, Lloyd Chapman, in a statement. “This is a move to eliminate federal small-business contracting programs.”

But the head of one trade association for S.B.A.-backed lenders was optimistic. “The lending policies and centralized loan operations of S.B.A. are among the more sophisticated in the federal government,” said Chris Crawford, president of the National Association of Development Companies, which represents lenders in the S.B.A.’s 504 loan program. In a reorganization, “they become the model for the collapse of the far-flung bureaucracies into one unit called small-business lending — worldwide. If anything, even in a larger reconstituted Commerce Department, access to credit for small businesses becomes a primary mission goal with much higher visibility.”

But opposition from the small-business constituency and its Congressional representatives, should it materialize, is only one obstacle for the administration to overcome — many interests, and Congressional fiefdoms, are at stake. Just a few hours after the president spoke, Sen. Max Baucus, the Democratic chair of the Finance Committee, and Dave Camp, the Republican chair of the House Ways and Means Committee, jointly rejected any effort to relocate the Office of the U.S. Trade Representative, an agency under their purview: “Making it just another corner of a new bureaucratic behemoth would hurt American exports and hinder American job creation.”

And if the consolidation were to fail, those small-business advocates just might get the best of both worlds: an independent S.B.A. but with cabinet-level status.

Article source: http://feeds.nytimes.com/click.phdo?i=dcfc9dcb3fc2d273cb9508ef0696e4d6

Bucks Blog: A Proposal to Simplify Credit Card Agreements

Bloomberg News for The New York Times

Credit card agreements are typically something you’d want to read only if you suffered from insomnia. A glance at a few lines of the dense type, printed on filmy paper, is sure to help you drift off.

But buried in all that fine print are important provisions that affect you financially. So the federal Consumer Financial Protection Bureau is proposing a new, simplified form, to help make the agreements more readable and useful to card holders.

“The bottom line is that many credit card agreements are confusing and most consumers don’t understand them,” said Raj Date, the agency’s temporary leader, in prepared remarks announcing the effort on Wednesday.

The prototype is short — about 1,000 words, compared with roughly 5,000 for the average industry agreement — and it does away with much of the legalese that is too dense for most consumers to digest. “Consumers won’t drown in page after page of difficult-to-understand terms,” Mr. Date said.

Instead, that language has been edited out and moved into a list of standard definitions that can be made available separately — online, for instance.

The resulting plain-language document, Mr. Date said, should do a better job of explaining how the credit card actually works, including what fees apply and when, and what to do if there is an error on the account.

The suggested form is meant as a “thought starter” and will be modified in response to feedback from card companies and the public.

At the same time, the agency is making available a database of existing credit card agreements from more than 300 card issuers, searchable by the name of the issuer as well as by specific terms. (If you have any doubt that the forms could use some simplifying, take a look at any one of the agreements.)

What do you think of the suggested form? What changes would you propose?

Article source: http://feeds.nytimes.com/click.phdo?i=e5b1c7e1fc3d85488aed8816d1ad070d

Bucks: How Would You Shore Up Social Security?

This week’s Your Money column discusses a proposal that would tinker with one of the most beloved features of Social Security: the cost-of-living adjustment.

The new index would rise more slowly over time, since it takes into account that people tend to change their buying habits when prices rise, substituting more expensive items with cheaper ones. Over time, that would amount to a cut in benefits — because monthly checks would not rise as quickly as they would with the current index.

Some Social Security advocates don’t think that’s the best way to bolster the program, whose reserves are now projected to be exhausted in 2036, a year earlier than last year’s estimate.

Advocates for the elderly also want to see the program addressed separately from the deficit discussions — as a self-financed program, it doesn’t contribute to the deficit.

How do you think the issue of Social Security solvency should be addressed? A new inflation-adjustment? Raising the cap on the pool of income that is subject to the payroll taxes that pay for the program? Raising the retirement age?

Article source: http://feeds.nytimes.com/click.phdo?i=84453567c43240fe06544d29486b4664

Higher Reserves Proposed for ‘Too-Big-to-Fail’ Banks

After nearly two years of political jousting, a panel of global regulators said on Saturday that banks deemed too-big-to-fail would have to set aside an additional cushion of capital reserves in what is the centerpiece of their efforts to avoid a repeat of the 2008 financial crisis.

The chief oversight group of the Basel Committee on Banking Supervision proposed that the world’s largest and most complex banks would need to hold a reserve of high-quality capital of between 1 and 2.5 percent of their assets to cope with any unforeseen losses. That would be on top of their proposed minimum capital levels for all banks, currently set at 7 percent of assets.

Regulators plan to impose the surcharge on a sliding scale, based on several factors including the bank’s size, complexity and the closeness of its ties to other large trading partners around the world.

And in what appears to be a nod to regulators pressing for even higher requirements, the committee proposed an additional surcharge on banks who grow larger or engage in risky activities that would “increase materially” the threat they pose to the financial system. The surcharge could raise the requirement to 3.5 percent of assets.

The process is only just beginning. The Basel committee will put out a more detailed proposal in late July, giving banks and policymakers a final chance to weigh in on the new rules before formally approving them. Then, regulators must begin the process of identifying these so-called “systemically important” global banks. The banks, meanwhile, will not have to fully comply with the new rules until January 2019.

The proposed capital requirements are perhaps the most important banking reform since the crisis erupted three years ago and are being followed closely in the world’s financial and political capitals. If banks are forced to hold bigger cushions of capital, they can more easily absorb financial shocks and avoid the need for taxpayer bailouts. But setting aside more capital means that banks also have less money available to lend out — a move that could dampen economic growth and potentially hinder an already anemic global recovery.

Amid aggressive lobbying by some of the largest banks for weaker capital requirements, international financial regulators have spent the last two years trying to strike the right balance. They also are trying to bridge different national standards, which might give countries with more favorable requirements a competitive advantage.

In a statement Saturday, the panel of regulators said the new measures would create strong incentives for large banks to curb risky behavior that could endanger the financial system. “This will contribute to enhancing the resiliency of the banking system and help mitigate the wider spill-over risks,” said Nout Wellink, a central banker from the Netherlands who is chairman of the Basel Committee.

American regulators pushed for a higher surcharge and better loss-absorbing capital, while European regulators, especially those in Germany and France, preferred a lower surcharge and broader definition of capital.

Article source: http://www.nytimes.com/2011/06/26/business/26banks.html?partner=rss&emc=rss

Bucks: Thursday Reading: The Mixed Results of Designing Clothes Online

May 12

Thursday Reading: The Mixed Results of Designing Clothes Online

Web sites let you design your own clothes, a proposal to tax parents of obese children, Google’s Chrome laptops and other consumer-focused news from The New York Times.

Article source: http://feeds.nytimes.com/click.phdo?i=4ec21e9690598af2a59a72d3652ef52c