Small business owners across Michigan no longer optimistic, as new law makes future uncertain

Survey of 300+ SBAM members shows new Earned Sick Time Act will upend their operations, cause ripple effects across the state

Lansing, Mich. – Small business owners are sounding the alarm, as changes coming to how they operate are bearing down, sans legislative action within the next couple of weeks. The Small Business Association of Michigan’s (SBAM) quarterly survey shows nearly unanimous concerns about the coming effects of the Earned Sick Time Act, with less than half saying they’re optimistic about their business prospects over the next six months.

“With the inflated costs of our economy, workers are looking for increased compensation – and small businesses are responding,” said Brian Calley, President and CEO of SBAM. “While some groups claim to speak for all workers, the reality is that this policy will force employers to divert resources in ways that employees do not prefer.”

Seventy-five percent of SBAM survey respondents said higher compensation is the most common employee request with seventy-nine percent reporting that they have raised wages in the last year to attract more employees. Just 17 percent of employers said more paid time off is the most common employee request and two-thirds of members already offer 80 hours or more of paid time off per year.

Only a quarter of those surveyed currently offer paid time off and sick time as separate time banks – a policy reflective of employee wishes, as most workers prefer one bank of time off. Yet under ESTA, employers will be required to separate PTO from paid sick time and track accruals for each, rather than offering a set number of hours at the start of the calendar year. Upfront time is preferred by both employers and employees, due to the ability for advance planning.

ESTA also allows for a three-day no show, no call policy for workers without any ramifications, a policy which 94 percent of SBAM members call problematic in the survey.

“This Act allows employees to no call, no show for three days, which will make our staffing challenges even worse and prohibit us from providing care to some of Michigan’s most vulnerable residents,” said Russ Knopp, owner of Comfort Keepers in Traverse City, a home care provider serving Northern Michigan. “In the case of health care businesses like ours, a lack of staff has a ripple effect on whether the business can even operate, leaving people without services that are actually life-sustaining.”

Most survey respondents also said their business is facing ‘substantially higher cost increases’ compared with past years. Despite those increases, 79 percent say they have increased wages within the past year.

The survey was conducted from Nov. 12 – 29. 83 percent of respondents have 50 employees or less.