The Small Business Case Against Proposition 118

Date: October 06, 2020

Why NFIB opposes the Paid Family and Medical Leave Insurance Program ballot initiative

NFIB CO PAC, the political action committee for NFIB Colorado, the state’s largest small-business association has endorsed a ‘No’ vote on Proposition 118, the Paid Family and Medical Leave Insurance Program. The following information explains why.

Top Three Reasons NFIB Opposes Prop. 118

  • Research from NFIB shows that 73% of small businesses already offer paid time off—and for any reason the employee chooses: sickness, care for a family member, parental duties, domestic violence, etc. This allows the employee and employer to tailor the time off to the employee’s needs instead of forcing them to wriggle around in a state-imposed straitjacket.
  • As an added layer of security, the federal Family and Medical Leave Act “provides certain employees with up to 12 weeks of unpaid, job-protected leave per year. It also requires that their group health benefits be maintained during the leave.”

Highlights from the No on 118 list of reasons

  • Proposition 118 is a $1.3B tax increase on employers and employees of all sizes that is used to create a large, new, state-run family and medical leave insurance program.
  • Proposition 118 creates a new, state-run insurance program that is managed by a political appointee that will provide 12-16 weeks of paid medical leave benefits to eligible employees in Colorado.
  • To fund the $ 1.3 billion program, the measure requires employers and employees to pay a 0.9% payroll tax that is deducted directly from employee wages – like a FICA tax.
  • Employers and employees split the cost of the tax 50/50. That deduction will grow to 1.2% at the discretion of the political appointee that will head of the new Family and Medical Leave Department. (As an example, an employee making $75,000 per year would have $675 a year placed into the fund. That tax will grow to $900 per year…Regardless of whether the benefit is used or not.)

Editorial Comment

The Daily Sentinel, Grand Junction

“But the larger point is that the initiative process often sidesteps a more collaborative approach. The analysis and the give-and-take of the legislative process is more suited for something this complex. Voters, too, have the right to reject this measure and demand something a little more polished with better assurances that we aren’t creating a new bureaucracy and entitlement program with unforeseen consequences … 118 creates costs for businesses and employees to establish a $1.2 billion government apparatus that might otherwise be funneled into benefits for workers.”

From the Secretary of State

 

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