In California, healthy employees create healthy businesses
This post from Small Business Majority's California Director Mark Herbert originally appeared on Patch.
Many small businesses can’t afford an HR department, which means that benefits – like health insurance, paid leave and retirement – can be difficult and costly to administer. But employee turnover is expensive as well, costing an employer approximately 75 to 150 percent of an employee’s salary. Benefits can be key to reducing employee turnover, increasing employee productivity and ultimately boosting businesses’ bottom lines. That’s why keeping employees happy and healthy is a priority for many business owners looking to make a profit, but it’s not as easy for small businesses as it is for large corporations. Thankfully, California has unique resources in place to help small business owners with limited resources who want to offer benefits to employees.
One of the biggest HR challenges for many small businesses is healthcare. Healthcare can be expensive and complicated, but it’s an important benefit: employees with health insurance can focus on work because they don’t have to worry about what to do if they get sick. That’s why 55 percent of small businesses offer health insurance to their employees. For employers who have struggled to sort through coverage options, California Covered for Small Business (CCSB) is a great resource for affordable coverage. For instance, qualified businesses that purchase through the program can obtain tax credits to help cover costs. And the program has implemented smart changes this year – employers with up to 100 employees are now able to participate in CCSB, and employers can allow employees to choose between different coverage options, which is known as “employee choice.”
Another significant benefit that can keep employees happy and healthy is paid family leave. Some employers may think they can’t afford paid leave – but they likely aren’t aware of California’s Paid Family Leave insurance program, which allows employees to take up to six weeks of paid leave at no cost to employers. The program is funded entirely through modest payroll contributions, which covers a portion of an employee’s salary if they need to take time off from work to care for care for a new child or an ill family member. For small business owners, this means they can offer the valuable benefit of paid leave without footing the bill. This helps them compete with larger businesses that can afford to offer paid leave on their own.
California law doesn’t only cover paid family leave for workers to take care of loved ones – last year, the state also adopted a paid sick law that allows workers to accrue a limited number of paid sick days. While many employers already offer paid sick leave, California’s policy makes the policy universal so that all employers are on a level playing field when it comes to offering paid sick days. Plus, this policy ensures that sick employees don’t have to come in and risk spreading their germs to their coworkers and customers, which is bad for productivity and bad for business.
Retirement is another benefit that small employers struggle to provide. In fact, 80 percent of workers employed by businesses with fewer than 25 employees do not have a pension or retirement plan. California small business owners are fortunate, though – the state is implementing a new program, called the California Secure Choice Retirement Savings Program, which will create a portable retirement savings program for all employees. Employees will be automatically enrolled in the program and contribute through small payroll deductions, but can opt out anytime. Plus, the program will be managed by the state, which minimizes risks for small business owners.
There’s no doubt that being a small business owner is tough. But California small business owners are lucky. Our state has policies and programs that can help small business employees succeed – and successful employees lead to successful businesses. By taking advantage of these programs and policies, small business owners can keep employees healthy and help their businesses’ bottom lines.
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