Minnesota Chamber workplace regulations priorities for 2017

Minnesota Chamber workplace regulations priorities for 2017

Oppose new labor mandates. Encourage all employers to share and adopt best practices for providing employee benefits.

·       Ensure consistent, statewide laws by prohibiting local governments from enacting a patchwork of employer mandates.

Minnesota businesses say: 'Don’t mandate one-size-fits-all'

The Minnesota Chamber is challenging workplace mandates at the Legislature and in the courts. At the Legislature, we are advocating for passage of the Uniform State Labor Standards Act that would explicitly preempt local governments from enacting their own wage and benefit mandates on private employers. In the courts, we are challenging the Minneapolis paid sick time ordinance as unlawful on the grounds that it conflicts with existing state law. The action also asks a judge to prevent Minneapolis from enforcing the ordinance. Graco Inc. is a co-plaintiff in the lawsuit.

Q&A with David M. Ahlers

Vice President, Human Resources and Corporate Communications
Graco Inc.

David Ahlers is a member of the Minnesota Chamber Board of Directors.

Why is the proposed Uniform State Labor Standards Act important to Graco?
Graco supports decisions being made by legislators at the state level rather than on a patchwork basis at the city level. We move our employees between our locations around the metro. We’re able to do that because our pay and benefits are the same. When cities enact different rules, it’s no longer an option to move employees due to these differences in pay and benefits packages. We believe the Uniform State Labor Standards Act will help to preserve a flexible work environment and a vibrant business community in this state.

Other cities in other states have enacted local ordinances governing employee wage and benefits. What’s the big deal?
There are also cities, such as Pittsburgh, that have rejected this concept. The fact that Minneapolis, St. Paul and Duluth are already passing or considering their own rules underscores our concern about a patchwork approach to pay and benefits, especially when cities are right next to one another.

Each state or city may address compensation issues differently. The Minnesota Legislature has indicated that these are matters to be reserved by our state, not each of our cities. We believe a city mandating sick leave is a slippery slope; if this stands, then we have no ability to predict what the next mandate will be. Businesses cannot make informed long-term investment decisions in an uncertain environment.

Why are you against local municipalities trying to improve benefits for employees in their communities?
Graco respects that employees may need to take time off with pay. But there are many ways to deliver the value of paid time off. In fact, in 1997, we eliminated factory paid sick leave in Minnesota and increased base pay by 2.3 percent, providing the equivalent of 48 hours of paid sick leave to our employees. Employee needs vary and business dynamics are different, so both employees and employers need the flexibility to define what they need in compensation and benefits programs, allowing businesses to be competitive in their respective markets.

"Manufacturing and, frankly, Minnesota business, have a long history of treating their employees fairly.  In a tight labor environment, it is to my advantage as a business leader to create a work environment that my employees want to be in over that of my competition. Please don’t let individual cities tie our hands as a business and create burdensome regulations with the promise of treating employees fairly when we already do. Even if we have programs that are better than those required by a city or state, we end up spending time collecting data and reporting out to show we are already doing what is right."

Eric Gibson, President
UMC, Inc. Monticello


"Our challenge with city mandates is that we don’t offer PTO to our hourly consultant employee group, which makes up the majority of our employee population. There are two main reasons. First, they are project- and finite-based employees; our clients need them to be present as they are working for the client for a limited time, under a limited budget, working under very tight time schedules. The world of project consulting is not conducive to long vacations; it’s what our employees choose. Second, at the request of our consultants, we maximize their pay rates as a percentage of the total client bill rates based on the assumption that they won’t be taking any time off during their project. This empowers our consultants to maximize their earnings, to save, and to plan for time off between engagements if they so choose.

"These local mandates are especially challenging for professional service organizations. The majority of our clients are national firms with offices in different cities, states and, at times, countries. Our consultants may work in multiple locations and live in another, and the administrative complexity of keeping track of what hours were worked in what location would be incredibly burdensome. Pricing our services based on different local laws is also incredibly difficult, and frankly not something our clients will allow. Imagine a different pay rate if a consultant bills for a few days in Minneapolis, a day in St. Paul, and a few days in Atlanta while working virtually from their St. Paul condo. Understandably, our clients will tell us to ‘figure it out’ or they will buy the services from suppliers located in more business friendly climates.

"We are also in a unique situation where a majority of our employees are our revenue producers. We must compete with our compensation and benefit package to attract the top talent necessary to grow our business. Having outside influences dictate our compensation policy is incredibly backward, especially when the free market already works. The IT services market is already efficient. Adding costs without a corresponding increase in production could throw the market out of equilibrium, resulting in less demand. Simply said, fewer Minnesota jobs.

"Artificial limits seem like a good idea when people don’t understand how markets work. The employment market in the IT world is incredibly efficient (experts believe unemployment is close to 1% in the IT industry), and I think most everyone involved in the IT industry would agree. These well-meaning, far-reaching mandates will restrict and inhibit a very efficient market and cause a long-term shift of well-paying jobs out of Minnesota."

Molly Jungbauer, CEO
Hollstadt and Associates, inc.
Mendota Heights