Despite cost debate, some MN businesses intrigued by paid-leave law
Monday, December 4, 2023
Minnesota is two years away from enacting its new paid leave law and while the debate over costs has resurfaced, some in the small business community are not worried.
The law was adopted in the most recent legislative session with plenty of fanfare, following debate over the potential effects on businesses. It allows up to 12 weeks of paid family leave or 12 weeks of medical leave. It's capped at 20 weeks for those needing both, and will be funded through payroll premiums split between employers and employees.
A new state-commissioned analysis suggested the expected rates should be slightly higher to cover costs.
Dan Swenson-Klatt, owner of the Butter Bakery Café in Minneapolis and member of Main Street Alliance, still backs the law.
"It's still about 10 times less than I pay when I'm paying out of pocket to be able to pay that kind of premium level," Swenson-Klatt explained.
Organizations such as the Chamber of Commerce, as well as Republican lawmakers, said the new findings underscore their concerns about the law being a costly endeavor. But Democratic sponsors welcomed the new analysis, saying the new projections are still in line with what they had envisioned when pushing through the plan.
In trying to compete with larger chains and other big businesses, Swenson-Klatt argued the new law gives smaller operations a recruiting resource they lack.
"I'll be able to have money that I'm not spending out of my pocket to do other things for my business and have a benefit that's valuable to my staff," Swenson-Klatt pointed out.
He also disagreed with fears workers will take advantage of the law by consistently maxing out the benefit. While some smaller businesses are unfazed by the latest projections, the National Federation of Independent Business called on Minnesota lawmakers to revisit the issue next year and implement caps and reductions to reduce costs.
The analysis showed overall program cost increases could exceed $600 million.
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