Big Labor Agenda

“Card Check” – The Employee Free Choice Act of 2009 (S.560/HR. 1409)

On March 10, 2009, the deceptively named Employee Free Choice Act (EFCA or “Card Check”), was reintroduced in the U.S. House and Senate. This legislation mandates that employers recognize labor unions without first holding a private-ballot employee election. The current election process, which is guaranteed by law and administered by the National Labor Relations Board, protects employee rights by ensuring that neither a union nor an employer may coerce, harass or restrain employees as they decide whether to support a union. Employees cast their votes in the privacy of a voting booth, and neither the union nor the employer knows how any individual voted.

But in the last 10 years or so, as union support has lagged, card-check agreements have become a critical component of labor’s organizing strategy. Under a card check system, a union gathers “authorization cards” signed by workers that supposedly express their desire to unionize. Union officials often pressure employers into accepting card checks by picketing, threats or comprehensive corporate campaigns to discredit or smear the employer publicly.

A more frightening and less obvious consequence of the card check system is the fact that employers could face binding arbitration contracts if benefit negotiations with a union stall. This means if an employer and union officials can’t reach an agreement in a newly unionized business, then (at the request of one party) federal bureaucrats would be allowed to enter small businesses and set wages and benefits for two years.

The Senate is expected to act on the legislation first this time, and supporters are pushing hard to bring the bill up for a vote in the fall. With several senators still indecisive, it is critical that we increase outreach to Capitol Hill. This legislation is an egregious assault on free enterprise with the potential to permanently cripple our economy.

“Mandated Paid Sick Leave” - The Healthy Families Act of 2009 (H.R. 2460)

On May 18, 2009, The Healthy Families Act was introduced in the U.S. House. This legislation mandates employers with more than 15 employees to provide workers with up to 7 days of paid sick leave each year. Furthermore, workers would accrue paid sick leave at the rate of one hour for every 30 hours worked, begin using leave time with little or no notice, and could roll over unused sick leave into the next calendar year.

This legislation has the potential to cause small business billions of dollars and make it more difficult for small companies to expand and create jobs. In fact, a recent study by The NFIB Research Foundation of an identical proposal in Ohio, estimates that 75,000 Ohio workers will lose their jobs due to mandated paid leave laws. To make matters worse, the bill would also invite excessive and harmful litigation, imposing significant costs on small businesses.

Most small-business owners provide flexible leave for family situations and do so in a way that meets the needs of both the employee and the business owner. Nearly 96 percent of small business owners surveyed by NFIB already provide flexible working hours for their employees when they need them. The federal government should not have the right to mandate the benefit package you offer your employees. You and your employees know best how to shape the benefits that correspond to your workplace needs, and your bottom line.

Changing Independent Contractor vs. Employee Distinctions

There is a difference between an independent contractor and an employee when it comes to taxes. Misjudging this important distinction could prove costly for a small business. The current 20 common-law factor test for determining who is an employee vs. an independent contractor has for too long handcuffed small businesses. These instructions are vague and unclear, making it difficult for small employers to know whether they are complying with the rules.

We are closely monitoring the 111th Congress for the introduction of legislation that would change the current independent contractor rules and make it harder for a business owner to classify workers as independent contracts. We oppose any proposals by big labor that would:

• Eliminate safeguards in the law protecting business owners from liability when classifying workers as independent contractors based on accepted industry standards.

• Allow independent contractors to go directly to the IRS and ask to be reclassified.

• Require the IRS to work in conjunction with the Department of Labor about misclassification violations, exposing small-business owners to additional audits and legal actions. Increase reporting and paperwork requirements on small business.