[US] Paid family medical leave mandate will hurt New Mexico’s small businesses

Following the pandemic, record inflation, a 60 per cent higher minimum wage and recently required paid sick leave, a new mandate in New Mexico has the potential to impact small businesses once again; a legislative proposal on “paid family medical leave”, Albuquerque Journal reports.

Under the proposal, the state would collect a portion of every worker’s paycheque (.5 per cent) and employers would have to nearly match each employee’s contribution. A government office of up to 200 employees would be created to oversee and manage a new paid-leave mandate, with the funds.

Businesses would reportedly be required to grant up to three months of paid leave per year to each employee for a long list of qualifying circumstances; from the birth or adoption of a child to a serious illness, to being a victim of stalking. Financed by workers and employers, the fund would be used to pay people a substantial portion of their salary while they’re not working, leaving businesses to foot the bill for adjusting to extended or repeated absences in the workplace.

This new tax on workers and employers could reportedly be raised by the Secretary of Workforce Solutions whenever the fund needs more money. Employees could “stack” various types of company-provided and state-mandated leave, extending their absence even longer than three months. And concerns are being expressed over the prospect of an individual being permitted to take leave for situations relating to non-family members as under the proposal this simply needs to be someone “related by blood or affinity” who has a “close association” with the employee or their spouse/partner.

The Albuquerque Journal says it cannot understate how hard it would be to manage a small business under circumstances where so much leave, under such loose conditions, could be taken with such frequency by employees.

Ninety per cent of New Mexico businesses have 20 or fewer employees and thus lack the flexibility to absorb long-term vacancies, move employees around to fill gaps or quickly hire new employees; all in a state with the nation’s third-lowest labour force participation rate. Workplace disruptions, staff shortages and the subsequent impacts on customers, employees and managers alike could potentially exacerbate an already fragile post-pandemic economy.

New Mexico doesn’t currently have a robust and thriving private sector. The Journal says that inflation and supply chain problems continue to take their toll and the population isn’t growing. New Mexico doesn’t have the luxury to pass laws that make it harder to run a business and create jobs.

Each time a new cost or burden is added to the back of a small business, New Mexico’s economic diversity takes another hit and the Journal fears that costly and bureaucratic mandates won’t create stronger workplaces but will instead lead to fewer jobs, fewer entrepreneurs, fewer companies offering generous employee benefits on their own and more challenging work environments for everyone.

Source: Albuquerque Journal

Following the pandemic, record inflation, a 60 per cent higher minimum wage and recently required paid sick leave, a new mandate in New Mexico has the potential to impact small businesses once again; a legislative proposal on “paid family medical leave”, Albuquerque Journal reports.

Under the proposal, the state would collect a portion of every worker’s paycheque (.5 per cent) and employers would have to nearly match each employee’s contribution. A government office of up to 200 employees would be created to oversee and manage a new paid-leave mandate, with the funds.

Businesses would reportedly be required to grant up to three months of paid leave per year to each employee for a long list of qualifying circumstances; from the birth or adoption of a child to a serious illness, to being a victim of stalking. Financed by workers and employers, the fund would be used to pay people a substantial portion of their salary while they’re not working, leaving businesses to foot the bill for adjusting to extended or repeated absences in the workplace.

This new tax on workers and employers could reportedly be raised by the Secretary of Workforce Solutions whenever the fund needs more money. Employees could “stack” various types of company-provided and state-mandated leave, extending their absence even longer than three months. And concerns are being expressed over the prospect of an individual being permitted to take leave for situations relating to non-family members as under the proposal this simply needs to be someone “related by blood or affinity” who has a “close association” with the employee or their spouse/partner.

The Albuquerque Journal says it cannot understate how hard it would be to manage a small business under circumstances where so much leave, under such loose conditions, could be taken with such frequency by employees.

Ninety per cent of New Mexico businesses have 20 or fewer employees and thus lack the flexibility to absorb long-term vacancies, move employees around to fill gaps or quickly hire new employees; all in a state with the nation’s third-lowest labour force participation rate. Workplace disruptions, staff shortages and the subsequent impacts on customers, employees and managers alike could potentially exacerbate an already fragile post-pandemic economy.

New Mexico doesn’t currently have a robust and thriving private sector. The Journal says that inflation and supply chain problems continue to take their toll and the population isn’t growing. New Mexico doesn’t have the luxury to pass laws that make it harder to run a business and create jobs.

Each time a new cost or burden is added to the back of a small business, New Mexico’s economic diversity takes another hit and the Journal fears that costly and bureaucratic mandates won’t create stronger workplaces but will instead lead to fewer jobs, fewer entrepreneurs, fewer companies offering generous employee benefits on their own and more challenging work environments for everyone.

Source: Albuquerque Journal