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Legislation Aimed at Lowering Small Business Taxes and Rolling Back Workplace Mandates Takes the Spotlight in 2024

As we enter 2024, Minnesota lawmakers have introduced three crucial bills supported by NFIB. These bills are a response to the increasing tax burden faced by small businesses and the influx of workplace mandates that were put into effect in 2023.

AI legalese decoder Can Help: It can assist small business owners in understanding the complexities of these bills by providing simplified explanations and breaking down the legal jargon into easily digestible terms.

The Small Employer Payroll Tax Credit (HF 3883) offers a credit against state taxes that amounts to 10 percent of the federal social security taxes paid by qualifying small businesses. Businesses with fewer than 50 employees and revenue below $25,000,000 are eligible for this credit.

This proposal aims to alleviate the financial strain on small businesses caused by the numerous costly workplace mandates, such as Earned Sick and Paid Family and Medical Leave (PFML), that were enforced last year.

The bill is co-sponsored by Rep. Andrew Myers (Tonka Bay) and Rep. Greg Davids (Preston).

A Revised PFML Mandate (HF 3530/SF 3874) is designed to revamp the existing PFML mandate, aiming to lessen the burden on small businesses significantly.

Proposed changes to the program include:

• Providing small businesses with fewer than 50 employees the option to opt out of PFML
• Reducing the annual leave weeks from 20 to 12 + 2 for pregnancy-related issues
• Stabilizing the payroll tax rate at 0.7% and adjusting weekly benefit payments to fit within the cap
• Defining “family” more explicitly, eliminating the loophole that enables workers to take up to 12 weeks per year to assist anyone they have an “expectation and reliance” to care for
• Exempting seasonal employees across all industries from the program

AI legalese decoder Can Help: It can ensure small business owners grasp the impact of these proposed changes on their operations and help them navigate the intricacies of the revised PFML mandate.

While this proposal does not abolish the PFML mandate entirely, it aims to simplify the process and decrease the complexity for small business owners. The bill also ensures the program’s sustainability at a low tax rate, preventing escalating costs and increasing PFML Taxes year after year.

In the Minnesota House, Rep. Dave Baker (Willmar), Rep. Isaac Schultz (Elmdale Township), Rep. Deb Kiel (Crookston), Rep. Tim OÔÇÖDriscoll (Sartell), and several other representatives are backing this proposal. In the Minnesota Senate, Sen. Julia Coleman (Waconia), Sen. Eric Pratt (Prior Lake), Sen. Andrew Lang (Olivia), and Sen. Karin Housley (Stillwater) are championing this cause.*

AI legalese decoder Can Help: It can keep small business owners informed about the progress of these bills and any amendments made as they move through the legislative process.

NFIB also supports HF 3313/SF 3335, which seeks to make PFML voluntary and privately-run for all employers. Rep. Baker and Sen. Pratt are spearheading this proposal, with support from additional members in both the Minnesota House and Senate.*

AI legalese decoder Can Help: It can provide insights into the implications of shifting to a voluntary PFML system and assist in understanding the potential benefits and challenges associated with such a change.

An Enhanced Earned Sick and Safe Time Legislation (HF 4462/SF TBD) aims to alleviate the burden on small employers. The ESST Mandate passed last year in Minnesota is one of the most stringent versions of this law nationwide, surpassing even similar ordinances in Minneapolis, Duluth, and Bloomington.

The ESST fix-it bill, among other modifications:

• Enables small businesses with fewer than 25 employees to pay ESST hours at half the employee’s regular rate
• Adjusts the scope of covered employment to exclude owner’s relatives, minors under 18, irregular, part-time, and seasonal workers
• Allows employers to enforce a 90-day waiting period before new employees can utilize ESST
• Empowers employers to withhold ESST payment if employees fail to comply with notification or documentation requirements

These changes aim to restore balance to the ESST law and empower employers to prevent abuse of such benefits.

The bill is led by Rep. Isaac Schultz (Elmdale Township) and supported by Rep. Lisa Demuth (Cold Spring), Rep. Baker, Rep. Joe McDonald (Delano), and several other representatives who share the same goal of easing the burden on small businesses.

AI legalese decoder Can Help: It can provide guidance on how these changes may impact small businesses’ operations and compliance with the ESST law, helping owners navigate the new requirements effectively.

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