Mandated Sick Leave, the Next Challenge?
California is among 4 states considering legislation to mandate employers pay sick leave benefits. While you may already offer sick leave in your compensation, it's worth considering if all your vendors and customers do as well. Companies affected by this may create ripples through your organization.
The arguments for mandating sick leave suggest permitting employees to go to work creates a public health hazard. Also proponents claim it is unfair to withhold paid sick leave from some employees. Predictably, opponents argue that this will force reductions in pay, other benefits, and may even cause businesses to close.
It's important to remember this one is coming from Sacramento.
Let's get real....
Whether it's mandates like this, or the changes to COBRA, or the possibility of the Employee Free Choice Act (a.k.a. "card check") becoming federal law, it's obvious the environment for employers is becoming increasingly treacherous. What strategies are you devising to contend with these threats to your stability or even your survival?
Our purpose in informing you of these changes is straightforward: outsourcing your labor risks to Bolt Staffing may be the key to your company's future. The more change we see, the more we are convinced that our services are vital to you.
Consider these alternate approaches to hiring:
Company "A" thinks the 70% premium paid to an agency for a temporary-to-hire employee is ridiculous. On April Fools Day, "A" decides to hire Joe, a qualified job applicant, for $15/hr. On July 1, Company "A" realizes that they will have to let Joe go. Joe, now unemployed and financially strapped, takes advantage of the new COBRA regulations and now costs Company "A" $800 per month for the next 9 months. Company "A" attempts to collect the 35% Joe is supposed to contribute, but Joe is unable to pay. Company "A" is now out of pocket $7200. Hopefully Company"A" is making enough to pay taxes so they can at least claim 65% of it in the tax credit.
Also on April 1, Company "B" hires Fred through an agency on a temp to hire basis. Fred will earn $15 per hour and the agency will charge $10.50 per hour (70% mark-up). Of that $10.50, $3.75 goes to pay Fred's payroll taxes, federal and state unemployment insurance, Worker's Compensation and liability insurance. Company "B" understands these are costs that they would have to pay anyway. They realize that the remaining $6.75 the agency earns each hour insures them against the shifting sands of law. On July 1, Company "B" no longer needs Fred. They call the agency and Company "B" and Fred part on excellent terms. Company "B's" actual cost? $3456 in gross profit to the agency. COBRA $0, SUTA $0, health care $0, risk of union organizing: not even a thought.
On the other hand, if business was good, Company "B" could keep Fred another 3 months as a temp and their actual cost would still be less than Company "A's" cost of COBRA alone for Joe. Our $800 per month health insurance premium for Joe is low for one person, what if Joe has a family? How about unemployment insurance rates? While Company "A" may expect an increase in his, Company "B" lets Bolt Staffing worry about that for them.
We could go on and on, but the reasons staffing agencies exist has always been economic. However, today it's not just a strategic advantage, it could be a matter of survival. If springtime is bringing a thaw in your business, don't be "Fooled", call us today. Let us carry the water for you!
