Dear Neighbor,
Between what Democrats did with full control of the Capitol last year and what they are looking to do this year, their attack on small businesses keeps coming in waves.
The new Earned Sick and Safe Time law began on Jan. 1, and we immediately began hearing stories of employees losing their superior benefits as employers were forced to change their existing benefit structure to comply with the new law.
Meanwhile, the build-up to the Paid Family Medical Leave plan already is more expensive than expected, with reports showing the tax rate will need to be 31 percent higher by the second year than what Democrats originally projected. This projected additional cost could very well increase as the state builds out the IT system and creates the 400+ person government bureaucracy to administer this program.
I think most people would agree this is a good time to take a step back and give businesses time to get back on their feet before pushing any radical new proposals. Instead, we keep seeing more extreme, damaging bills introduced. Just a few of note being pushed through the process include:
More burdens for contractors (HF 4444)
This bill primarily impacts construction contractors who are independent contractors. They’ll now need to ensure they meet the qualifications of an independent contractor – now a 14-point test that used to be a nine-point test.
Additionally, penalties will be increased for general misclassification of employees (non-construction). In the past, there were few penalties for misclassifying employees in various industries and this will provide greater penalties for those individuals. Under this bill, penalties are harsher – some fines/penalties will be imposed per incident, per day.
This bill also permits a stop work order across many project sites depending on the infraction; not only will there be a work stoppage at the site where the violation occurred but across the various sites of the same contractor.
Earned Sick and Safe Time ‘fix it’ (HF 3882)
The ESST bill was passed into law during the 2023 legislative session. It took effect on January 1, 2024, but many employers were not prepared for nor understood implementation of the new provisions.
Here’s the problem: This latest bill does little to assist employers as they navigate the implementation.
We offered an amendment that would carve out small businesses with 25 or fewer employees; the DFL voted it down.
We also offered an amendment that would carve out part-time or seasonal workers, but the DFL voted that down as well.
We offered an amendment to have the Dept. of Labor not impose a monetary penalty for initial violations until after January 2025 when the ESST law had been in effect for a year (to give businesses time to adjust and implement) but the Democrats voted it down.
The upshot is there’s a fix-it bill that doesn’t seem to fix much of anything for this new burden Democrats placed on Minnesota’s small businesses.
Restrictive Employment Covenants; Void in Service Contracts (HF 3456)
This bill would damage smaller businesses by stipulating companies are not allowed to restrict or prohibit customers from hiring an employee away from service providers.
A prime example of an impacted business is a childcare facility who may have a teacher/employee poached by a parent wanting that teacher to be their private nanny or childcare provider. For some of the daycare facilities, there may be a contract between the parent and the facility that in the event they do hire away a teacher, they would pay the daycare facility a significant fee (it’s somewhat of a deterrent from the poaching).
These contracts will be nullified by this bill. In that scenario, if a daycare provider/teacher leaves their job and works for the private employer, in their home, they’ll likely be paid less as they’ll lose retirement, health benefits and paid time off. This policy impacts the very employees they set out to assist last year with childcare legislation.
Democrats have full control of the Capitol and seem more interested in pushing their extreme agenda ahead full steam by moving bills like these – and a whole lot more – through the committee process than listening to reasonable concerns from the people they are impacting with these bills.
Needless red tape for painters/paint (SF 3554)
Democrats propose a bill that would require all painting to be done by or under the supervision of a licensed painter. They even want to create a paint contractor board to oversee the licensing.
But, wait, there’s more: The legislation also restricts the mere sale of paint, except in small increments, to licensed individuals. Not just the state, but Home Depot, would enforce that law if it becomes one.
This doesn’t apply just to a professional artist painting a fresco in a new church but also any Tom, Dick or Harriet who paints decks on the weekend to make extra money. The law applies to anyone “engaged in paint contract labor who, through negotiations or competitive bidding, enter into contracts to furnish paint and painting services.”
The list is long and we haven’t even gotten to H.F. 4050, which treats all businesses small and large the same regarding minimum wage levels, and H.F. 3980, which alters the journeyworker/apprentice ratio in ways that could be dangerous by, for example, treating the nursing as a less-hazardous industry than, say, construction.
All these bad bills make you shudder to think Democrats also now are moving a bill to make Minnesota a full-time Legislature. Just think how many more bad ideas they could come up with if there were no deadline to adjourn.
If I’ve said it once, I’ve said it 1,000 times: We need more balance in St. Paul because this one-party control is bad for Minnesota.
Sincerely,
Shane