Alternative D.C. Paid Family and Medical Leave Bill Hurts Small Businesses

A coalition of business organizations and associations is backing a weakened alternative to the D.C. Council’s paid family and medical leave bill that cuts out small businesses.

Today, a consortium of business organizations and universities presented an alternative to the D.C. Council’s proposed paid family and medical leave policy in a letter to Mayor Bowser. This weakened bill fails to meet the needs of small businesses, and, if passed, would fail to help Main Street businesses match the offerings of their larger competitors and ensure coverage for their staff members.

The D.C. Council’s initial bill proposed a paid family and medical leave policy that was accessible to all employers--large and small-- in the District. This bill relied on a citywide insurance pool as its funding mechanism, requiring employers to contribute 1 percent of their payroll costs to the pooled fund. Using this funding mechanism allows small businesses to provide their employees with a paid family and medical leave policy that was previously out of reach. The alternative plan, in contrast, shifts the funding source to an employer mandate model. Under this model, each employer is responsible for absorbing the cost of their employees’ paid leave, rather than utilizing the insurance pool.

While some large businesses may prefer this model, an employer mandate is simply unaffordable for the small businesses that sit at the heart of our communities. D.C. small businesses want to offer their employees paid leave, but they cannot afford to. An employer mandate does nothing to change that reality. If enacted, large employers would retain a competitive edge, while the employees of small businesses would remain without coverage.

Touting their plan as one that takes D.C. government out of the picture and preserves the sanctity of the employer-employee relationship, the business coalition insists their proposal is better for both employee and employer. But, for the thousands of in-district businesses with fewer than 50 employees, the plan falls flat. No large businesses embrace the employee-employer relationship more than a small business, and few are as closely tied to the wellbeing of their communities and their customer base.

To level the playing field for all businesses, and to equip small companies to match the offerings of their competitors and to ensure all employees in the District have access to paid family and medical leave the D.C. Council’s plan must move forward without an overhaul.

“With a paid family and medical leave policy on the books, one funded by employer contributions of just 1 percent of payroll, we will all have the opportunity to provide a benefit that helps our employees, our businesses, and our community,” said Doron Petersan, the owner of Sticky Fingers Sweets and Eats in Columbia Heights and a member of the DMV Small Business Alliance, a project of Main Street Alliance.  “Policy that is socially conscious, accessible and cost effective is a no-brainer for small business owners in the District.”

“The business lobby’s proposal for employers to pay directly for their employees’ leave may sound nice, but it’s motivated by a desire to save money for the city’s largest employers and corporations, hanging small and medium size business owners like me out to dry,” said Fatima Nayir, the owner of Mama’s Pizza in Anacostia and a member of the DMV Small Business Alliance, a project of Main Street Alliance.