Lots of new laws may hamper recovery.
What we think:
Lawmakers need to consider flexibility.
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Timing is everything.
We’re nearing two months into the new year and many businesses across Colorado have felt the effects of new legislation that took effect Jan. 1.
There are now laws regarding equal pay, changes to job openings and announcements, new tenant rights. There are new rules about paid time off and family leave, as well as overtime regulations coming from the federal government. There will be more coming from the feds, including a push for raising the minimum wage. And small businesses should be given some leeway as the learning curve is steep.
Businesses are struggling and many wonder if now is the time to add more regulatory burdens that could slow reopening and rehiring. There is a time and place for adding new regulations, but jacking up business costs during a pandemic seems particularly tone-deaf to the struggles of Main Street. (Wall Street seems to be rocking along just fine, and the wealth of American billionaires has only grown during the coronavirus.)
Some of the new rules make sense and don’t come with extra costs. For equal pay assurance, for example, businesses must post a salary range so applicants know what they can expect to be paid. It’s an attempt to make sure there’s equity in pay — but seems somewhat ineffective. A business can always pay a male employee higher on the range than a female employee, or a white prospect more than a Black or Hispanic prospect. The state needs to do more work on pay equity, which benefits everyone. Think about it: Paying employees what they are worth equals more money circulating in the local economy. Equal pay will help middle-income Americans tremendously, especially considering that there are few single-income households any longer.
One change that creates a big learning curve for businesses: Employers are prohibited from asking applicants about their salary history. No longer can businesses base current compensation on past pay. The goal here is to make sure employees are paid based on the skills and experience they bring to the job, not on past salaries.
Colorado’s SB20-205, which has its roots in the COVID crisis, requires 48 hours of paid sick leave, which means many small businesses already in survival mode will struggle to meet that expense. It’s a balancing act. Employers don’t want their workers to spread COVID, but paying people for quarantining can be expensive and could drive down employment.
Unemployment insurance has been expanded to include the immunocompromised who feel they can’t work safely; employees who are primary caregivers for children; and workers who feel their workplace isn’t following enough safety protocols to keep employees safe from COVID.
But who gets to decide if a company is being safe or not? With enhanced unemployment benefits, can workers just decide it’s unsafe and choose not to work? The General Assembly created a mess with this law, and it won’t help people get back to work. In fact, it does the opposite, by encouraging people to quit jobs, stay home and collect higher unemployment.
Businesses are struggling, and these new regulations can make the fight for survival even tougher. There’s not much that can be done now since the laws are already on the books, but the legislature should consider offering temporary relief to help businesses that are hardest hit adapt to the new legal realities.
There’s always been a tension between workers’ rights and business needs — and during the pandemic, that gulf has grown wider. But the state’s small businesses don’t need more rules; not right now.