Great Lakes Wire

The National Federation of Independent Business (NFIB), a prominent advocate for small business interests in Michigan, voiced opposition to proposed Senate Bills 6 and 7 in testimony before the Senate Labor Committee. The organization highlighted significant concerns regarding the financial penalties and potential jail sentences outlined in the bills for violations of wage and benefits laws. These measures, according to NFIB, threaten the viability of small business operations by severely curbing the use of independent contractors and mandating the disclosure of private employee wage information.

The NFIB pointed out that amendments to narrow the scope of independent contractor restrictions were not available at the time of testimony, leaving discussions to focus on the broader implications of the proposed legislation.

Amanda Fisher, NFIB Michigan State Director, remarked on the challenges faced by small businesses in the current economic climate. Fisher stated, “Given the economic stresses facing Michigan small businesses, introducing bills that would essentially eliminate independent contractors and threaten employers with massive fine increases and the threat of jail time and felonies seems rather tone-deaf.”

Presently, small business owners rely on the flexibility of hiring independent contractors under the "economic realities test" by the Department of Labor, especially when they cannot afford or justify hiring full-time employees. Fisher cited California’s experience with similar legislation, noting the need for numerous exemptions and questioned the rationale for Michigan to pursue analogous policies. She highlighted the broad reach of the proposed law, including its impact on various professions such as truck drivers, medical personnel, and gig economy workers.

Senate Bill 6, aside from affecting independent contractor usage, would prevent employers from identifying complainants and require disclosure of peer salary data upon request. The bill proposes increasing fines from $1,000 to $10,000 and categorizes some violations as felonies. It presumes employer guilt in contractor misclassification cases unless proven otherwise.

“Many small business owners serve in multiple roles in the business, including HR, and may make unknowing mistakes. These bills would expose them to massive fines that could include jail time. At a time when policymakers want to limit time spent incarcerated for violent offenders, these sanctions are disproportionate at best and, at worst, offensive,” Fisher added.

Fisher also warned that the legislative measures would impose burdensome requirements on small businesses, jeopardizing their ability to create jobs and contribute to economic recovery. She argued that the bills do not reflect the priorities of lawmakers who understand the importance of supporting Main Street businesses.

In conclusion, Fisher stated, “These bills are not on the agenda of any lawmakers who value Michigan’s Main Street businesses and their workers. These bills are harmful to small businesses, free enterprise, and Michigan’s economic health.”