NFIB California Main Street Minute

For the legislative and political week December 20-24

Happy Holidays and welcome to the December 20-24 edition of the NFIB California Main Street Minute from your NFIB small-business-advocacy team in Sacramento. We are thankful for our friendship with you as NFIB members, supporters and small business leaders.

Cal/OSHA Extends COVID Standards

• Last Thursday (December 16), the California Occupational Safety and Health Standards Board re-adopted its COVID-19 Emergency Temporary Standards with some changes, which can be read here. Warning! Twenty-six pages ahead. 
• The extension will be in effect from Jan. 14, 2022, through April 14, 2022. Gov. Gavin Newsom wasted no time giving his approval in an executive order issued the same day. The executive order also leaves open the possibility of a third readoption. 
• Veteran Cal/OSHA watchers, however, say it’s likely a permanent regulation might be set before the 90-day extension. 
• Two days prior, NFIB California joined with 59 other organizations in sending this letter to Cal/OSHA regarding the proposed second re-adoption of its COVID-19 Emergency Temporary Standard. 
• “Overall, we are glad to see that consistency is largely maintained from the ETS to the 2nd Readoption ETS,” said the letter. “However, we are concerned with multiple provisions of the 2nd Readoption ETS which, broadly speaking, eliminate distinctions between vaccinated and unvaccinated individuals in the regulation, as well as complicating return to work provisions.”

Masks Are Back On

• Last Monday (12/13) the California Department of Public Health ordered masks back on for all Californians. “With case rates increasing 47% since Thanksgiving, the California Department of Public Health will require universal masking to increase protection to individuals, families, and communities during the holidays,” the department said in a news release, where more specifics can be found. 
• “Beginning December 15, CDPH will require masks to be worn in all indoor public settings irrespective of vaccine status through January 15, 2022, at which point California will make further recommendations as needed in response to the pandemic.”

The Return of Supplemental Paid Sick Leave?

• Senate Bill 95, which granted two weeks of emergency paid sick leave for COVID cases, expired Sept. 30, 2021. Now, a coalition of 89 labor and community groups wants it back. “California is facing the newly-identified Omicron variant, significant declines in vaccine effectiveness after six months, the need for all adults to receive a booster shot, and an average of more than 3,600 confirmed COVID-19 cases per day — all of which clearly demonstrate that COVID-19 Supplemental Paid Sick Leave remains a necessary tool to contain the spread of COVID-19,” said the coalition’s letter to Gov. Gavin Newsom and six legislative leaders. “We ask that you act now to extend supplemental paid sick leave through the pandemic in order to protect California’s families.” The coalition is asking the extension to be backdated to October 2021. They offered no end date. 
• A day later (December 17), a coalition of 83 business associations, including NFIB, countered with its own letter to the Legislature. “California workers do not need to choose between going to work sick or staying home without pay. Employees who test positive for COVID-19 or are exposed at work are entitled to paid leave under the CalOSHA Emergency Temporary Standard (CalOSHA ETS) and testing at no cost. On December 16, 2021, Governor Newsom issued an executive order extending CalOSHA’s ability to renew that ETS through December 31, 2022. Further, the situation has changed significantly since SB 95 was enacted last March and will continue to evolve. Far fewer Californians were vaccinated, and many Californians had not yet had the opportunity to get vaccinated. Now, vaccines, including booster shots, are free and widely available … If it is California’s policy to increase vaccination rates, requiring employers to provide more and more paid leave to the unvaccinated undermines that goal. Finally, small businesses are at their breaking point. They have faced labor shortages, minimum wage increases, continuous new health and safety obligations, and multiple new leave mandates since the start of the pandemic.”

Retail Theft

• At the invitation of the state attorney general, NFIB was present at a roundtable discussion with Attorney General Rob Bonta that focused on measures law enforcement is taking, and needs to take, to crack down on the retail theft epidemic. NFIB continues to make sure small business is literally at the table, as retail theft impacts Main Street employers, with fewer resources in a dramatically different way than the “big box” stores. 
• According to the invitation to attend, “The Department is hoping to unite everyone around the common goal of reducing, detecting, and eliminating organized retail theft. The primary focus of the meeting will be on investigations and intelligence. We want to hear about the best practices of statewide law enforcement agencies, as well as any obstacles that prevent them from gathering the intelligence necessary to thwart large-scale operations. We hope retailers will share their experiences, struggles, and successes in providing law enforcement with the necessary information for successful detection and prosecution. Finally, we hope to hear from the online platforms about their work in detecting illicit goods sold on their sites, as well as what technical and other obstacles that prevent them from doing so.”

New Minimum Wage Rates, January 1

• Starting the first of the year, the state minimum-wage rate goes up to $15 an hour on employers with 26 or more employees and up to $14 an hour on employers with 25 or fewer employees. More information here. NFIB also reminds its members in areas with cities that have a higher rate to check and see if that, too, changes on January 1.

Holiday Shopping Data

• The research firm Morning Consult, in its latest tracking of holiday shopping, found:
  • Most holiday shoppers who plan to shop for the holidays have started their gift buying: The share of consumers who have finished at least half of their holiday shopping rose from 40% last week to 51% this week. However, only 12% say they are entirely done.
  • Last-minute shoppers, or the 19% of shoppers who are just starting their gift buying in December, plan to do most of their shopping in stores: That’s in contrast with early-bird shoppers, who have primarily relied on online shopping for gifts this holiday season.
  • More than 50% of those who have started shopping have faced supply chain issues. These include items being out of stock online (54%), in-store (52%) or back-ordered or delayed (48%).

NFIB California in the News

• Epoch TV, December 17—State Director John Kabateck sits down for a 25-minute interview on port congestion and other issues for the California Insider show. 
• The Sacramento Bee, December 17—State Director John Kabateck comments on the latest mask mandate in a story that also ran in The Fresno Bee, The Modesto Bee, and the San Luis Obispo Tribune. 
• Citizens Journal, December 15—Online news site publishes NFIB’s news release on the latest monthly SBET report, A 42-Year High We Could Do Without.

November 2022 Ballot Propositions and Referenda Update

• Here’s the latest from the secretary of state’s office:
• 1 has qualified to be on the ballot (flavored tobacco)
• 3 are eligible to be on the ballot (medical malpractice, gambling, plastics)
• 4 have either been withdrawn or failed to qualify
• 9 are pending the attorney general’s language before signatures can be gathered
• 32 have been cleared to begin gathering signatures.
• “An eligible initiative measure is one in which the required number of signatures have been submitted to and verified by the county elections officials. Eligible initiative measures will become qualified for the ballot on the 131st day prior to the next Statewide General Election unless withdrawn by the proponents prior to its qualification by the Secretary of State.”

And They’re Off

• The ballot initiative to reform California’s medical malpractice awards, as expected, will be intense and expensive. Former state insurance commissioner Steve Poizner, the last Republican elected to statewide office, has thrown his support behind the reform. 
• In a guest editorial in CalMatters, Poizner writes, “Under a 1975 California law known as MICRA – the Medical Injury Compensation Reform Act – the victim of medical malpractice may collect no more than $250,000 for pain and suffering, regardless of how devastating the injuries might be. As the state that leads the nation in protection of consumers, how can this gross injustice be allowed to stand?” 
• NFIB California’s political action committee has taken no stand on the ballot measure, so far.

A Noble Adieu?

• “It is time to pass the baton. It is time to rest and surround myself with the benefits of a life well lived and earned honorably in the service of my fellow citizens,” said Long Beach U.S. Rep. Alan Lowenthal in announcing he will not seek reelection. He even hauled in Robert Frost to comfort those who want to despair over his decision, “There are miles to go before I sleep.” 
• So, why did Hotline, a Beltway news source, have to ruin the moment with an alternative take on Lowenthal’s farewell? “A recent congressional map draft discussed by the state’s redistricting commission ‘placed Lowenthal’s home in the same Latino-heavy district as’ Rep. Lucille Roybal-Allard (D-40).”

• Lowenthal makes the fourth California U.S. House member not to seek re-election. The others are Rep. Devin Nunes (R-Tulare), who is leaving to head up Trump’s venture into media; Rep. Jackie Speier (D-San Mateo), who is retiring, and Rep. Karen Bass (D-Los Angeles), who is running for mayor of Los Angeles.

A Look Ahead

• December 27, 2021—New legislative and congressional district lines released
• January 3, 2022—The Legislature reconvenes
• January 10—Deadline for governor to release his proposed state budget
• February 18—Bill introduction deadline
• June 7—Primary Election Day
• June 15—State budget must be passed by midnight
  • Summer recess begins after passage of budget
• August 1—Legislature returns from summer recess
• August 31—Legislature adjourns
• September 30—Deadline for governor to act on bills
• November 8—Election Day
• December 5—Organizational convening of the 2023-2024 Legislature

Nationally,

• The big news of the week: the Build Back Better Act will not be considered by the U.S. Senate this year. (It has passed the House.) 
• NFIB continues to oppose this legislation through the Small Business Survival campaign. Take Action here. Read more here. Read President Biden’s statement here. 
• Harmful provisions include:
  • Raises taxes on small businesses with the Small Business Surtax. 
  • Significantly expands the 3.8% surtax on pass-through businesses with business income above $400,000 ($500,000 joint return). 
  • The threshold is even lower for family businesses held as trusts, with the surtax applying to income above $13,000.

• • These thresholds are not indexed for inflation so the surtax will impact an increasing number of small businesses annually. 
  • When combined with the other surtaxes on certain pass-through businesses, these tax changes create a 48.8% federal effective tax rate on pass-through business income before even considering state and local taxes. 
  • Mandates a government-run paid family and medical leave program:
    • Creates a four-week federal paid family and medical leave program for all workers without regard to employer size. 
    • Significant change to small employers (fewer than 50 employees) who are currently not subject to the unpaid leave mandates required by the Family and Medical Leave Act (FMLA). 
  • Increases employment law penalties:
    • Increases civil monetary penalties on small businesses with isolated errors when trying to comply with complicated federal employment law.

• • • The maximum minimum wage and overtime violations are increased from $1,100 to $20,740 per violation, and the maximum tipped credit violation is increased from $1,100 to $11,620. 
• Small business is not alone in its opposition to certain elements in the Build Back Better Act. Canada has a bone to pick too. “Canada dramatically hardened its tone with Washington in a dispute over proposed U.S. credits for electric vehicles,” reports Reuters, “threatening to slap tariffs on a range of American goods unless the matter was resolved … Canada fears the tax credit for American manufacturers will undermine its own efforts to produce electric vehicles in Ontario – the country’s industrial heartland – and also undermine the integrated North American auto industry.” 
• Did you catch NFIB’s latest webinar? On December 15, the topic was 2021 Wrap Up Q&A: ERTC, PPP, EIDL, Vaccine Mandate Status, and More! Watch it here.

Next Main Street Minute December 27. Happy Holidays.

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