Detroit City Wire

Flexible time off plans provided by Michigan businesses are in jeopardy under the recent Supreme Court ruling that will put in place new requirements without legislative changes, the Small Business Association of Michigan (SBAM) said this week following a survey.

The quarterly survey from SBAM includes responses from about 500 businesses representing various industries and locations. Eighty percent are small businesses with 50 or fewer employees.

Inflation remains a key issue for businesses, which are less optimistic heading into the months ahead, the survey showed.

“Michigan’s smallest operators are expressing concern and reporting a loss of confidence, ahead of new regulations on them that will hit in just six months,” SBAM President and CEO Brian Calley said in a statement. “Half of those we talked to said they are already trying to reduce expenses to prepare for a possible recession. They simply will not be able to sustain further increased costs. The cliff is in sight now: in February, they’ll start to fall over it.”

Ninety-three percent of small businesses say they’re experiencing increased costs at rates higher than normal. Labor is another key concern, with 200,000 jobs still unfilled across Michigan, even as most report offering higher wages, benefits and flexibility.

Seventy-eight percent of businesses surveyed said they’ve increased pay at least 5 percent for their employees during the last year and another 26 percent said they have increased pay 10 percent or more.

With the recent adopt-and-amend ruling that will put in place new paid sick time requirements, 79 percent of businesses surveyed said they offer “flexible paid time off.” SBAM said this benefit would be reduced under the law now set to take effect next year.

“Small businesses are the most trusted institutions in our nation, and we know that people support their local economies as best they can,” Calley said. “But the more the government increases costs, the closer to the cliff our small businesses are pushed.”

There was a 13-point drop in optimism, SBAM said. Thirty-seven percent surveyed said they were optimistic about their prospects for the next six months, as opposed to February 2024 when 50 percent were optimistic.

Long term, 54 percent said they were optimistic compared to 66 percent in February.

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