The Covid pandemic and the subsequent state-mandated restrictions and shutdowns in 2020 had a chilling effect on New York businesses – especially the Empire State’s small businesses – which are still being felt today. And as with many of the actions taken by political leaders three years ago, though mostly well-intended, emergency policies hit Main Street the hardest.
Among the most glaring examples in New York was the fraud-ridden use of the state’s Unemployment Insurance (UI) program for layoffs due to business restrictions that dragged on far beyond any rational policy argument. The results were thousands of small businesses that never recovered and shuttered, workers that were permanently separated from the labor market, and the emptying of the state’s UI Trust Fund, now many billions in debt to the federal government.
Now, all New York businesses, which unlike the chain and big-box stores did not have exemptions and carve-outs from the lockdowns and restrictions, are paying the highest possible UI tax rates and special assessments. This “Covid Tax” on business could be fixed by using federal pandemic relief funds given to the state, as intended and utilized by most other states, to reduce the unfair extra tax burden, but Albany has held on to the money and refused to take action. This failure to confront the UI crisis is dreadful, but there is another Covid-era policy that remains unaddressed.
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In March 2020, New York implemented a Covid sick leave mandate during the pandemic. Covid sick leave was intended to be temporary and expire when orders of isolation or quarantine from public health officials ended. However, now New York State allows employees to self-attest to periods of isolation or quarantine. Given this new rule with self-attestation, when will Covid leave expire? The answer is never as Covid is still around and there’s no sunset date in the law. One needn’t be an abject cynic to see how such a policy can be abused.
Employers have shouldered the burden of providing Covid sick leave for three years and are looking for certainty and guidance as to when this law will expire. Big-box retailers and big businesses have human resources, legal teams, payroll services, and administrative personnel to help – small businesses do not. Small businesses cannot continue to absorb the costs of Covid sick leave, especially as federal relief ended with Covid sick leave refundable tax credits expiring in 2021.
Some may ask, but what if an employee gets Covid? There are options. In 2020, New York State also approved legislation that requires most businesses to provide regular paid sick leave and employees are entitled to use that leave for a multitude of reasons. With a permanent paid sick leave law in full effect, if employees contract Covid, they can still stay home sick and be paid.
As always with the blunt grip of government, the cost to small businesses is the heaviest. Unnecessarily continuing paid time off for Covid burdens small businesses with higher costs, all while they continue to struggle with the post-pandemic financial stresses of labor shortages, supply chain disruptions, inflation, rising energy prices, and higher UI taxes.
It’s time to return to normalcy, and New York is the only state that still has a paid Covid sick leave requirement in effect. This is not a superlative lawmakers should be proud of. New York’s Main Street businesses need clarity and relief. Lawmakers in Albany need to pass legislation that finally phases out this outdated Covid policy.
Ashley Ranslow is the New York State Director of the National Federation of Independent Business (NFIB), the nation’s leading small-business advocacy association.