ILLINOIS NEWS NETWORK
Business groups in Cook County say they are being hit with a perfect storm of regulations and tax hikes this summer, putting a damper on hopes for business expansion and jobs growth.
A county ordinance that requires employers to provide workers with at least five paid sick days per year took effect July 1. That comes on top of Chicago’s minimum wage rising to $11 an hour on the same day, as well as the Illinois House last week voting to increase corporate taxes by 33 percent after overriding Gov. Bruce Rauner’s budget vetoes.
“Earning a profit is getting to be a dirty word,” Mark Grant, Illinois state director of the National Federation of Independent Business, told Illinois News Network.
Grant acknowledged that the county had good intentions in extending the benefit to workers, but the ordinance is creating numerous headaches for employers, he said. The policy goes against the trend of small and medium-sized firms offering workers a set amount of paid time off per year, as opposed to earmarking specific time periods for vacations and sick days, according to Grant.
“They’re looking at big labor cost jumps immediately,” he said.
Other complications include a requirement to roll over paid sick leave accrued from one year to the next in some cases. That runs counter to many employers’ benefits policies, Grant said, adding that surveys of his members show strong opposition to the idea.
“The vast majority – over 90 percent – are against government saying you must provide this kind of paid leave,” he said.
Combined with state lawmakers supporting a $5 billion annual tax hike to balance the state budget, the paid-leave ordinance adds to businesses’ cost burdens and sets up the possibility of firms scaling back hours and reducing positions, Grant said.
Michael Reever, vice president of government relations for the Chicagoland Chamber of Commerce, sees the new regulations creating a culture of uncertainty for businesses and causing them to wonder about what else might be coming down the pike.
“If the legislative bodies continue on the course they are on, it’s going to be difficult for employers to make the decision to open a news busines,” Reever told Illinois News Network. “You will be at the whim of a legislative body that has no problem raising your costs.”
Cook County businesses also continue to be under a property tax system that taxes commercial properties at a higher rate than residential, he said.
Businesses have not had enough time to implement the new paid-leave rules with precision, according to Reever. The rules were released just before the Memorial Day weekend, leaving only about a month for employers to get their plans in order before the ordinance took effect.
“We were opposed for a variety of reasons,” he said. “One is that it would create a patchwork.”
Indeed, scores of municipalities in Cook County have opted out of the policy, making it difficult for businesses with multiple locations around the region to determine how it affects them, Reever said.
In a letter to the Cook County Board last month, Reever urged the county to delay the implementation date to Jan. 1, 2018, to allow businesses to adjust to the new policy. And he also expressed concern about how the ordinance will open companies up to future lawsuits.
“We have great concern because of the private right of action included in the ordinance, which could be used to sue employers through no fault of their own and open them up to even more costs and legal problems unnecessarily,” Reever said in the letter.
The paid-leave policy would likely slow economic growth in struggling areas of the county that need it the most, he said.