FBA Executive Director Robert Rivinius was invited by Assembly Member Cottie Petrie-Norris, D-Laguna Beach, to be on a panel at today’s Select Committee on Small Business and Entrepreneurship hearing. Following is a letter sent to committee members afterwards summing up FBA’s views.
Dear Assembly Member Petrie-Norris
Thank you for the opportunity to participate on the California Comeback: Pandemic Recovery for Small Business panel today. Many excellent points were raised and discussed by you and the panelists. I will summarize my recommendations here for the committee members not attending the hearing:
- A most critical problem facing family businesses is workforce development. Due to federal and state programs, many workers can make more money not working than they make working. Our members report that when employees are called to ask them to come back to work, the reply often is that they are making more money not working and might consider coming back when the benefits end. It is important not to implement new programs or extend existing programs that create this outcome.
- The regulatory system in California is crushing many small businesses. The large California Labor Law Digest published by the Cal Chamber contains over 1,000 pages of fine print. How can anyone be expected to comply with that? And this is just one form of the massive and costly regulatory system in California.
- Something must be done to curb Private Attorneys General Act (PAGA) lawsuits. This allows employees to sue on behalf of the state. PAGA was originally enacted to help the state regulate its underground economy – those businesses that operate unlawfully outside of tax and licensing requirements. But PAGA also allows employees to sue for almost every Labor Code violation, not just serious violations or those dealing with health and safety — even something as innocuous as listing the corporate name on a pay stub instead of a company name. The average settlement in these cases is a staggering $1.2 million and attorney’s fees average more than $405,000 per case.
- CTE funding is critical to create and fund vocational training programs at the K-12 and community college levels to teach skills that will help graduates get better jobs.
- Due to the COVID crisis, the state now has a UI fund debt to the federal government of about $22 billion. Nothing has been put in the state budget to begin paying off this debt. This could result in a dramatic increase in unemployment insurance fees to California’s employers.
Thanks again for the opportunity to comment. We always stand ready to provide input from California’s family businesses.