top of page

Unintended Consequences: Legislation in Maine Small Business

Updated: May 24, 2023

The following opinion was written by Charles Ellis of Westbrook.

I have spent the better part of my adult life working in banking. I have had the opportunity to work with people at every level of our society from the super-rich worth more than 10’s of Millions to the homeless. I even get to work with our Small Business owners in Maine.

One of my frustrations being an expert in my field is when people who have no experience and don’t work directly with people create laws that regulate how an industry should behave and it seems evident to me that they have no idea the unintended consequences of their policies. One example is a bill that was passed in the previous legislative session that requires all employers with 5 employees or more to offer a retirement plan. This seems like a great idea, right? The problem is that there’s a reason many, especially smaller employers, don’t offer retirement plans and that reason is that they largely can’t afford it. Especially in the given environment where businesses are struggling to get people through the door offering more money for entry-level positions than they ever thought they would but are being forced to in order to keep their doors open. Do you think these small businesses if they could afford to would not offer retirement plans? Sure maybe some are just greedy but the reality is the reason they aren’t is they’re competing against major corporations and in order to keep their costs low it’s an expense they can’t afford.

I’m not as old as some but many of you I assume remember all the mom-and-pop stores that have had to close up shop because of Home Depot, Lowe’s, Walmart, Amazon, Hannaford, etc., and while we get our food at cheaper prices where does all the profit go? It doesn’t stay in Maine. There are now many fewer jobs and many fewer people considered middle class because we sacrificed our communities for convenience. The small businesses that remain are fighting against not just big stores but continual increases in regulation making it more and more difficult for them to compete. The major corporations can handle these additional regulations by doing what they always do: streamlining and finding more efficient ways to get more from less. In order words they’ll automate more and eliminate more jobs even as they gain more market share and on average Maine is worse off.

These types of policies have to stop. Just recently I learned of LD 1964 which is going to have a similar, but likely much worse, impact on our small businesses. This bill would require all businesses with 15 or more employees to have 12 weeks of paid Family Medical Leave for part-time and full-time employees. It would be paid for by imposing essentially a 1% tax (0.5% on the employee and 0.5% on the employer). It also aims to allow for the leave to expand beyond actual family to anyone with which the employee has a “significant personal bond”.

While we may think about the young women who don’t have many people to rely on but themselves and get pregnant we have to be careful that in presenting a solution to that problem we don’t create a much better problem to replace it not to mention that give the language of this no only being for family members but also for “significant personal bond” well-meaning as I believe that to be it is going to lead to so many abuses. Take the following example:

Say, you have company XYZ with 15 employees. What if 2 employees suddenly require 4 weeks of family medical leave at the company’s busiest time of year - no notice, no warning (maybe they’re both family members of someone giving birth). Now the company is forced to go seek out 2 new employees at their busiest time, train them, and then what, terminate them upon the return of the other 2? Now we have too many employees for the same amount of work, and employees will either be upset at having a reduced number of hours and leave, or people will have to be let go. And don’t forget the cost burden of training new employees. There’s a lot of nuance behind it you wouldn’t think of unless you run a small business with 15+ part-time employees. This also encourages businesses to keep less than 15 employees, so certainly not promoting more jobs.

Were we not in a situation in our society where businesses both big and small alike are just trying to get enough people to get by perhaps this wouldn’t be as big of a deal, though it’d still be bad policy. As it is this has the potential of being disastrous for Maine’s economy as it will likely advance the trend of less small businesses and more big business market share as big businesses are more equipped and financially able to handle employees out of medical leave. But rest assured that especially with the rise of AI this will lead those big businesses to find ways to employ fewer people. All in all, this is going to be bad for Small Businesses and Maine as a whole.

To Testify In Person at the State House on May 25th at 1pm
  • The public hearing will begin at 1pm in the Labor Committee room located on the second floor of the Burton Cross Building directly behind the State House.

  • There will likely be a sign-up sheet outside the committee room. The committee may stick to their usual procedure of hearing testimony in favor, followed by testimony in opposition, followed by testimony neither for nor against, or they may switch between the various sides in 30-minute blocks.

  • You will likely be limited to three minutes of testimony.

  • If you are reading from written testimony, you must bring 20 copies of your written testimony to be distributed to the committee.

  • After giving your testimony you may be asked questions by the committee. You can do your best to answer, or you can follow-up with the committee at a later date if you do not have an answer.

Testify Remotely via Zoom

  • If you cannot make it to Augusta, you can also testify remotely via Zoom.

  • Do note that the chairs may hold Zoom testimony until after all in-person testimony, so it could take several hours to get to those testifying via Zoom.

  • To register to testify via Zoom go to this link.

  • Click "Public Hearing".

  • Choose the Labor and Housing Committee.

  • Chose May 25, 2023 as the date.

  • Chose LD 1964 as the bill.

  • Check the box "I would like to testify electronically over Zoom".

  • Select if you are testifying for the legislation, against it, or neither for nor against it.

  • Attach a file or paste the text of the written testimony you wish to read from.

  • Enter your contact information, click "I am not a robot" and click submit.

  • You will be emailed a confirmation email and an email with the Zoom link.

  • Make sure to login to Zoom on the hearing day under the name you registered with so the committee chair can call on you when it is your turn.

Submit Testimony in Writing

  • To submit written testimony go to this link.

  • Click "Public Hearing".

  • Choose the Labor and Housing Committee.

  • Chose May 25, 2023 as the date.

  • Chose LD 1964 as the bill.

  • Attach the file or paste the text of your written testimony.

  • Enter your contact information, click "I am not a robot" and click submit.

131 views1 comment

1 Comment

Brittany Wiggins
Brittany Wiggins
May 21, 2023

Seems very ripe for abuse. Thoughtfully written assessment. 👏🏻

bottom of page