By Ken Monroe, FBA Chairman
California’s 1.4 million family-owned businesses are in the fight of their lives.
Some have been shuttered since March, still waiting nervously for an all-clear from state officials. While their revenue stopped, the bills kept coming. And many voluntarily kept paying wages, health benefits and other costs to take care of their greatest asset: their employees.
Other businesses benefited from the “essential” tag (or so they thought) and were allowed to continue operations. But staying open during the stay-at-home order meant limited operations and large drops in revenue, yet higher costs to modify how we work to protect workers and customers.
With California reopening, there seems to be a light at the end of the tunnel. The question now at hand is this: will state lawmakers allow that light to shine and help business power an economic comeback? Or will our prospects dim under short-sighted policies that throw more burdens and new costs on employers, slow job creation and kill future growth?
There are several areas where lawmakers can show whether they are friend or foe to family-owned businesses, including how they deal with new taxes, restrictive contracting rules and predatory lawsuits.
Another threshold test will be workers’ compensation. California employers have historically paid among the highest costs for workers’ compensation insurance. A lot of these costs do not benefit the workers who truly need it – instead money is skimmed away by lawsuits and outright fraud.
As a result of COVID-19, a new workers’ compensation threat has emerged: a “presumption” that all COVID-19 cases should be blamed on work and, therefore, eligible for workers’ compensation benefits.
Let me be clear: employers support – and pay for – our workers’ compensation system as an important safety net. We do our best to keep workers safe and healthy. When accidents or illnesses occur because of work, our workers should get the medical care and benefits they need.
Presumptions turn the system inside out. Instead of providing these benefits for work-related injuries or illnesses, employers will pay for any instance when a worker gets sick – even if the illnesses was caught a home from a family member or out in public from a stranger.
In early May, Gov. Gavin Newsom enacted an emergency presumption, when most of our state was still closed down.
As Californians get back to work – and back to their own personal lives – blaming all COVID-19 cases on work is unfair and unjustifiable. Worse, it will cost employers billions of dollars to pay benefits that have nothing to do with work.
If lawmakers expand or extend the workers’ compensation presumption – as several have proposed – it would deal a devastating blow to family-owned businesses. Jobs will be lost, or not brought back. Economic recovery and growth will be dampened. And, ironically, it will depress the tax revenue our state leaders need to restore public services, such as education and community health.
Business will be the engine of the economic recovery. For state lawmakers, the choice is clear: are they friend or foe?
Ken Monroe is president and CEO of Holt of California, a major Central Valley Caterpillar dealer, and chairman of the Family Business Association of California. This op-ed first appeared in the Bakersfield Californian.