The National Federation of Independent Business (NFIB) was among the groups requesting Gov. Newsom delay a scheduled wage increase through 2022 but it was announced last week that he is declining to exercise his authority in the matter.
As a result, the minimum wage for workers will increase on January 1 to $13 per hour for businesses with 25 or fewer employees and to $14 per hour for businesses with more than 25 employees.
“Not allowing this increase to go forward will only make life harder for those Californians who have already borne a disproportionate share of the economic hardship caused by this pandemic,” Gov. Newsom said in a statement online. “Many of them are on the front lines of the pandemic, providing child care, working in our hospitals and nursing facilities and making sure there’s food on grocery store shelves.”
The NFIB, which represents 15,000 independent and small businesses statewide, is none too happy about the snub.
“A dollar may not seem like a lot but multiply that with many employees, many hours and the fact that the well is dry,” said John Kabateck, state director of NFIB California. “Many of our members are still getting their Paycheck Protection Program loans accepted, approved and forgiven. So, they are still scraping by trying to make that work.”
A two-year delay would have given small business owners gradual steps and a chance to crawl out from under COVID-19-induced economic hardship, according to Kabateck.
“Gov. Newsom disappoints us in not giving small business and not giving Main Street some level of support,” he said. “It appears that every single policy these days coming out of the Capitol has been pro-union, pro-employee without any thought process about how a small employer is going to make that work and that’s got us furious.”
For example, the NFIB had been pushing to enact AB 1035, which will exempt small businesses with 25 or fewer employees from liability for a COVID-19 related injury or illness in a claim that a person contracted COVID-19 while on their premises or due to the actions of the business, according to Open States.
However, NFIB's efforts have been thwarted.
“We found that the Chair of the Senate Committee, Hannah Beth-Jackson, was not putting AB 1035 on the schedule,” Kabateck said. “She wasn't even going to let it be taken up in committee and we're trying to get it on committee. We are just very sore that policymakers, time and again, are failing to enact even the smallest legislation that would give small business owners a level of comfort, relief and hope.”
In response, Kabateck said, small businesses in California are shuttering or in some cases relocating out of state.
"So what is the Golden State doing to stanch the flow of the carnage? It hits them with increased costs in paid family leave programs, increased workers’ compensation premiums via rebuttable presumption, zero fixes to a deeply flawed independent contractor law, and now a scheduled increase in minimum wages," Kabateck said. "We have an official economic policy in California, which is to completely annihilate small businesses.”