NFIB Opposition to Earned Sick Days

Demonstrations in favor of Paid Sick Days in Massachusetts.

The National Federation of Independent Business (NFIB) is a lobbying group that calls itself "the voice of small business." However, the group has been shown to lobby on issues that favor large corporate interests and run counter to the interests of small businesses. NFIB is best known for its unsuccessful legal attack on the 2010 Affordable Care Act ("Obamacare") and for successfully spearheading opposition to President Clinton's health care reform package in 1993.

NFIB has spent an unknown, but significant, amount of money and institutional cache fighting legislative and ballot proposals to give workers the right to earn sick time. However, a recent NFIB survey of its small business members found that providing mandatory family and sick leave was not a critical concern for most NFIB members. Mandatory sick leave did not fall into the top 10, top 20 or even the top 60 “critical concerns” of NFIB members. In fact sick leave ranked 64th of 75 issues studied.

Nevertheless, NFIB has fought paid sick days in multiple states and municipalities including Alabama, Alaska, California, Colorado, Connecticut, Hawaii, Illinois, Iowa, Maine, Massachusetts, Milwaukee, Wisconsin (where it supported a suit to overturn the law), Minnesota, Montana, New Hampshire, North Carolina, Ohio, Philadelphia, Vermont, Washington state, and West Virginia.

In addition to direct lobbying of lawmakers, other NFIB anti-paid sick day campaign tactics include grassroots lobbying via email blasts to members encouraging them to contact lawmakers, legislative updates, economic reports -- in Colorado, Illinois, Massachusetts, and other states, and earned media outreach.

The group’s state economic reports on the effects of implementing paid sick days have been criticized for poor methodology, flawed assumptions, and a lack of objectivity “that result in a highly inflated estimate of the cost of implementing such laws.”

Most recently, NFIB has taken a position against workers’ ability to earn paid sick days in Florida, coming out against citizen-led initiatives in Orlando and Miami. The Executive Director of the Florida chapter of NFIB, Bill Herrle, was quoted as saying, "There are over 300 governments in Florida between cities and counties, and if we would have 300 different policies on this issue, that would be a nightmare. [...] We want this issue to be addressed in Tallahassee as a single statewide policy." (In fact, in Massachusetts and other states, NFIB’s position has been to oppose statewide paid sick days policies.) Herrle also claimed that the NFIB Florida chapter represents "about 10,000 businesses around the state, and what they don’t want is a local ordinance about this issue." This contradicts the statements of small business owners in Orlando and Miami who have said their businesses and communities would benefit from a paid sick days standard.

Click here for the SourceWatch main page on the National Federation of Independent Business (NFIB).

Critiques of NFIB's reports on Paid Sick Days

Critiques of NFIB’s reports fall into three main categories: problematic cost assumptions, failure to include estimation of benefits, and inflated estimation of implementation costs:

Problematic Cost Assumptions

• NFIB’s analysis assumes that workers will utilize 100 percent of the sick time they accrue. In the case of the NFIB Massachusetts study, it is assumed that all workers receiving new paid sick days would use all seven days they accrue per year. Data from multiple sources (the Bureau of Labor Statistics, a study of San Francisco employees, and the National Health Interview Survey) suggest that average use is closer to three days per year.

• NFIB assumes that all employers whose employees do not currently receive paid sick days would need to provide entirely new leave, but converting an existing Paid Time Off (PTO) or vacation leave—which is more common than sick days—to paid sick days system would meet the requirements of the law without adding much (if any) additional cost.

No Estimation of Benefits

The NFIB analysis makes no attempt to analyze economic benefits of paid sick days, which are likely to include:

• More sustained earnings for workers, who will spend their wages in their local communities;

• Reduced employee turnover (and its associated costs) due to a reduction in both involuntary departures and voluntary quits as workers experience greater job security;

• Reduced spread of disease in businesses and schools as sick employees and the parents of sick children are able to stay home, thus improving productivity as fewer workers overall become ill; and

• Better ability of workers and family members to receive prompt, appropriate treatment via primary care rather than emergency department care, resulting in significant health care cost savings ($1.1 billion annually if paid sick days were universal at the national level).

Researchers have repeatedly estimated that employers themselves will experience significant financial benefits from implementing paid sick days, including savings from reduced turnover and decreased productivity loss due to contagious illness. These benefits are estimated to be larger than costs for employers.

Implementation Cost Estimates Much Too High

NFIB analyses garner a great deal of media attention with assertions that the costs of implementing a proposed law—which they do not attempt to balance with an analysis of economic benefits—will result in job losses. As noted above, their job loss calculations are problematic on a number of levels:

• Estimated costs of implementation are much too high;

• Most wages paid to employees will remain circulating in the local economy, which may provide an economic boost rather than an economic loss;

• The impact of paid sick days laws is likely to be much smaller than the impact of minimum wage increases. Researchers estimate that the cost of implementing paid sick days—before benefits are considered—is equivalent to a wage increase of around 20 cents per hour for newly covered employees. Minimum wage increases tend to be much larger than that. Evidence from studies of the impact of higher minimum wages across state boundaries—where an urban area straddles a state border and a higher minimum wage exists on one side of the border—shows that there is no negative employment effect of higher wages, even when a higher minimum wage occurs in only part of an economic area.

NFIB’s analyses also predict significant job losses. Yet, in studies of San Francisco, where a paid sick days law has been in effect for years, job losses have not occurred. Two studies both demonstrate stronger employment growth than in surrounding counties.

Media Campaign on Earned Sick Days

Bill Vernon

NFIB works the media aggressively in an effort to define and give face to the opposition to paid sick days. For example in Massachusetts, NFIB released a report aimed at framing the debate before the newest version of the earned sick days bill under consideration there was introduced. According to their study, Effects of a Paid Sick Leave Mandate on Massachusetts Small Businesses, the economic impact of Massachusetts Paid Leave could cost nearly 16,000 jobs and $8.4 billion in lost output – assertions that were refuted by other researchers (see above).

NFIB staff have placed their views in both the business and mainstream media. In the following articles NFIB Massachusetts State Director Bill Vernon is featured; the job loss claims made in the NFIB study were circulated through a variety of media outlets.

In Boston Business Journal:

“A small-business group is raising the alarm about a new paid-sick-days bill it says could cost Massachusetts 12,000 jobs in coming years…Bill Vernon, state director of the National Federation of Independent Business, said the measure — even after compromises — represents needless “meddling” in employer-employee relations and could end up costing businesses millions of dollars a year and the state’s economy thousands of jobs.”

In State House News Service:

“Business groups, including Associated Industries of Massachusetts and the state chapter of the National Federation of Independent Business, have strongly resisted mandating sick leave, warning the bill could cost the economy as many as 12,000 jobs and claiming such policies are best established by employers."

"The employers who can afford to offer this benefit are already doing it," said Bill Vernon, state director of NFIB, in a statement. "To believe that it should be mandated is to believe that some employers are acting against their own financial interest because they don't care about their workers. That's a terribly unfair caricature of small business owners."

Media outreach includes orchestrated letters to the editor such as in this example:

"I own a small business in Holyoke; significantly smaller now than previously. The long-lasting economic downturn has hurt my business, as it did many others...In a state that has not created one net new job in a decade, where thousands of our neighbors are desperately seeking work, and where so many businesses are struggling to stay alive, the imposition of yet another costly mandate on employers, in my opinion, is foolish."

"The National Federation of Independent Business which represents thousands of small business owners in Massachusetts estimated recently that Coakley-Rivera’s bill would cost roughly 16,000 jobs over the next several years… NFIB members are overwhelmingly opposed to this legislation. While Coakley-Rivera may be well intentioned in sponsoring this bill I believe it is ill-timed and economically destructive."

NFIB has been criticized for putting forward spokespeople without disclosing their ties to the lobbying group. The Columbia Journalism Review’s column “The Audit” highlighted NPR’s use of Joe Olivo, a New Jersey small business owner opposed to the Affordable Care Act, without mentioning his role as vice-chair of the NFIB New Jersey Leadership Council. NPR was not the only news outlet to use Olivo without mentioning his NFIB role. According to the Columbia Journalism Review, NBC, Fox News, the Philadelphia Inquirer and The Financial Times had done the same. After NPR’s ombudsman criticized his station for making this mistake, the Columbia Journalism Review ran a second article titled, “More on NPR and Manufactured News: Why lobbyist-provided rent-a-quotes subvert the news.” “Nobody trusts what some paid-to-say-it lobbyist thinks,” the piece pointed out. “The press knows it and the lobbyists for sure know it, which is why they seek to cloak their messages in the authenticity of the man on the street.”

Essential Resources

Related SourceWatch Articles

• National Federation of Independent Business
• NFIB's Right Wing Ties
• NFIB's Legal Arm
• American Legislative Exchange Council
• Lynde and Harry Bradley Foundation
• Donors Trust

PRWatch Articles on NFIB

• PRWatch, NFIB's "I Built My Business" Astroturf Bus Tour Gets Rolling in Wisconsin, Harriet Rowan, October 23, 2012.
• PRWatch, On NFIB Conference Call, Romney Urges Employers to Tell Employees How to Vote, Just Like the Kochs, Brendan Fischer, October 18, 2012.
• PRWatch, NPR, NBC Use One Guy for Small Biz Opposition to ACA and Fail to Disclose his NFIB Ties, Emily Osborne, July 6, 2012.
• PRWatch, Who is Bankrolling the Fight Against "Obamacare?", Brendan Fischer, June 27, 2012.
• PRWatch, Insurers are Recycling a Front Group to Cheat Us Out of Benefits, Wendell Potter, November 10, 2011.

NFIB in the News

• CNN, Koch Bros.-backed group gave millions to small business lobby, Chris Frates, November 21, 2013.
• Businessweek, How the Insurance Industry Funded Small Business's Anti-Obamacare Message, John Tozzi, May 14, 2013.
• Associated Press, Business Making an Anti-Regulation Pitch to Voters, Larry Margasak, September 18, 2012.
• Huffington Post, Who Really Represents the Interests of Small Biz?, Jared Bernstein, July 26, 2012.
• Mother Jones, Meet the Front Group Leading the Fight Against Taxing the Rich, Josh Harkinson, July 23, 2012.
• The Hill, Secrecy is Not a Small Business Value. Transparency Is, David Borris, July 19, 2012.
• The Hill, Big money behind misinformation on healthcare law, Frank Knapp, Jr., June 29, 2012.
• Huffington Post, NFIB, Plaintiff In Supreme Court Lawsuit Against Obamacare, Refuses To Disclose Donors, Greg Rosalsky, June 27, 2012.
• National Journal, The Secret Money Behind the Health Care Challenge, Elahe Izadi, June 26, 2012.
• Salon.com, The Group Trying to Kill Obamacare, Alex Seitz-Wald, June 25, 2012.
• Inc., Small Business Group Under Fire on Funding, John McDermott, June 25, 2012.
• Washington Post, Clash Over Financial Disclosure Escalates, Spilling into Presidential Race, Dan Eggen, June 23, 2012.
• Washington Post, Small Business Group’s Political Motives Come Under Question in Battle Against Health Care Law, J.D. Harrison, June 14, 2012.
• Wall Street Journal, Lawmakers Question Small-Business Group's Funding, Angus Loten, June 14, 2012.
• The Hill, House Liberals Want Group that Filed Suit Against Healthcare Law to Reveal Donors. Mike Lillis, June 13, 2012.