As a kid growing up in Las Vegas in the '60s and '70s, my father was the owner of a small business. He usually never had more than 10 employees at any given time. I remember that he pretty much ran his business as he wanted. There was very little, if any, interference from any governmental agency. Of course there were rules back then and of course he had to comply, but I don't ever recall him complaining about government's intrusion into how he ran his business. If they did I would have heard about it, believe me! The only time I remember any contact with a state or federal agency was when the Secret Service visited our home to ask my dad his advice as a part of their investigation into money counterfeiting in the Las Vegas area.
Back then small business owners were able to devote most of their time to running their business, creating jobs, helping the local economy and providing for their family. My dad didn't have a human resources staffer, he didn't need one! The few laws that existed back then either didn't apply to my father due to the number of employees he had or were clear enough that most business owners could understand without having an advanced degree in personnel administration.
But oh my, how the times are changing!
I was recently talking with the CEO of a sister employer association and the topic of politics came up. I mentioned that when I came to NAE 14 years ago I already had several years of lobbying experience and that when I became the executive director of NAE in 1999 I was going to attempt to keep NAE out of the legislative arena. That didn't happen! The legislative environment over the past decade has literally sucked NAE back into the fray. I think it's fair to say that most of my time these days is staying on top of what legislation has passed, what legislation is being considered and what the sense is from our legislators regarding future legislation. And let me tell you, there is a lot on which to stay current!
Business owners hate the word "mandate." They hate being told how to run their business. Yes, we all realize that we need to operate within certain guidelines, but for the most part let us run our business so we can succeed in creating those jobs, stimulating our local economy and providing for our families. New laws and regulations that strangle our ability to run a successful business does no one any good in the end. But yet, it seems that all that's coming out of Washington lately are in fact laws that hamper our efforts to be successful and grow.
In January 2009, the first piece of legislation that newly inaugurated President Barrack Obama signed was the Ledbetter Fair Pay Act. This bill made it easier for complainants to file gender based pay discrimination charges against their employer or past employer. The fact that the first law President Obama signed was an employer/employee related bill should have and did send a signal about the things yet to come.
Other pieces of pending legislation such as the Healthy Families Act (which mandates 7 paid sick days each year for businesses with 15 or more employees) and the Employee Free Choice Act (which makes it significantly easier for a union to organize workers) makes it very clear as to the intent in Washington. At a time when all businesses are doing all they can to simply stay in operations, the last thing we need is for the government to place more burdens on how we operate or to make it easier for third parties to come in and speak on behalf of our employees. We need a Washington that steps up to help business, to help create jobs and to promote business growth, not to stymie it.
The list of pending issues in Washington goes on and on. And when added to the myriad existing employment laws, it is easy to see how now, more than ever, employers need to be cognizant of their responsibilities.
Not to be overlooked are the increased enforcement efforts of the many federal agencies responsible for ensuring employer compliance. For example, the Department of Labor will be hiring close to 1000 additional investigators to enforce wage/hour and child labor laws. The Immigration and Customs Enforcement will be auditing thousands of employers I-9 practices. The Internal Revenue Service will be doing thousands of random tax compliance audits mainly looking for employers who misclassify workers as independent contractors. The U.S. Citizenship and Immigration Services will inspect worksites that employ workers on H-1B visas making sure the worker is properly employed. Secretary of Labor Hilda Solis said it all shortly after she was sworn in as Labor Secretary, "...there's a new sheriff in town..." Indeed, there is a new sheriff in town and like it or not, all employers need to be mindful of that.
Up to this point this discussion has been mostly about the federal government. However, what's happening at the state level should also be mentioned. The Nevada labor commissioner has for years wanted to write some new regulations regarding the state's wage and hour laws. Not everything the labor commissioner wants will be welcomed by business. For example, he wants to compel employers to pay salaried employees for workweeks in which the employee does not work as long as the employee is ready, willing and able to work. So, for businesses that close for two weeks over the holidays they would have to pay their salaried employees for that time as long as the employees are ready, willing and able. This goes against the concept of closing shop for those two weeks and saving payroll. What about closing for several weeks due to an act of God? Remember the Reno floods a decade ago? Another regulation would be for those hourly employees who work at two different rates of pay in the same workweek in which overtime is worked. The new regulations would require employers to pay overtime at one and one half times the hourly rate in effect at the time the overtime is worked. This state regulation would be in conflict with the federal requirements of averaging. Seems like a lot for an employer to have to know just to maintain compliance.
Yes, the times they are changing.
Running a business in the year 2010 is beyond comparison from running a business in 1970. If my dad were alive today there's no doubt in my mind that he'd throw his hands up in disgust and rue the day he ever opened up shop. I get that feeling from many business owners today. There's just too much to know and too many regulations to follow. And knowing that there's more, much more, to come doesn't exactly foster much comfort. Running a business in the year 2010 requires more than just providing a product or service to clients, it also requires knowledge of all the laws and regulations that surround us. My attorney friends have told me that during a down economy the litigation rates usually go up. Just doesn't seem fair, does it? All we as do as businesses is create jobs, provide opportunity, put back into the community, pay our taxes and help grow our economy. It seems to me that Washington and Carson City would do everything they could to ensure the success of all businesses not challenge them.
Yes, the times are changing. There's so much for us to now consider as we go through the daily operations of our companies. The slightest mistake can be costly. It is no longer good enough to think we are doing the right thing, we must know we are doing the right thing.
James V. Nelson is executive director of the Nevada Association of Employers. Contact him at jnelson@nae-online.org or 329-4241.
