Hogan Administration Takes Action to Help Small Businesses Comply With Flawed Paid Sick Leave Bill

Executive Order Creates Office of Small Business Regulatory Assistance; Governor Continues to Push Compromise Legislation

ANNAPOLIS, MD – Governor Larry Hogan today issued Executive Order 01.01.2018.04 creating the Office of Small Business Regulatory Assistance to assist small businesses in complying with House Bill 1 (HB1), the Maryland Healthy Working Families Act, passed by the Maryland General Assembly over the governor’s veto. As stipulated in the Maryland Constitution under Article II, Sec. 24, the Maryland General Assembly has 50 days to consent or pass a resolution of disapproval.

“We all agree that hardworking Marylanders need and deserve access to paid leave, and our administration is committed to providing these benefits to workers without crushing small mom-and-pop businesses and killing thousands of jobs,” said Governor Hogan. “Now that legislators have openly admitted that there are serious problems with the bill that they passed, I hope we can all come together to find real, common sense solutions. In the meantime, it is our responsibility to use every tool at our disposal to ensure that our small businesses can continue to create good jobs for thousands of Marylanders.”

The order reorganizes state government to create the Office of Small Business Regulatory Assistance, directs the Governor’s Business Ombudsman Randall Nixon to serve as Executive Director, and moves employees from the Office of Small Business Resources under the Department of Commerce to staff the new office. The office will be housed and report directly to Secretary Kelly Schulz within the Maryland Department of Labor, Licensing, and Regulation, the agency tasked with promulgating regulations for the new law.

“A strong and healthy workforce benefits all Marylanders, and the Hogan administration is committed to expanding access to paid leave for workers,” said Nixon. “The Office of Small Business Regulatory Assistance stands ready to help businesses provide these benefits for their employees while ensuring they can continue to grow Maryland’s economy and create jobs.”

Immediately upon establishment of the office, Nixon contacted the over 1,000 small businesses and workers who previously provided their information to the governor’s Committee on Paid Leave Policy in order to solicit their input and provide a venue to address their concerns. He also contacted every member of the Maryland General Assembly, asking them to refer any small businesses in their districts now being mandated to comply with the new law.

The governor’s order specifies that the new office will assist businesses with the implementation of the new law, facilitate responsiveness of state government to small business needs, and serve as a central clearinghouse of information for business assistance programs and services available in the state. The office will be required to report to the governor and the legislature regarding problems encountered by small businesses complying with the law and its regulations and recommend policy improvements and solutions.

The governor’s order follows widespread calls by legislators to fix serious flaws in HB1 and delay the bill’s implementation by 90 days due to its potential negative impact on small businesses. The governor continues to call on the legislature to pass his Paid Leave Compromise Act of 2018, which would address HB1’s most punitive provisions for employers, and his Small Business Relief Tax Credit, which will provide direct aid to help with compliance costs. Leading legislators indicated willingness to take up the governor’s proposals following last week’s vote.

“For more than a year, I have implored legislators to work with us in a bipartisan fashion to make sure we get this right for Maryland workers and job creators. There is still time to work together to ensure our small businesses and workers are protected and provided the benefits they need,” said the governor.

In November 2016, Governor Hogan became the first Republican governor in the nation to advocate for paid sick leave legislation by proposing the Common Sense Paid Leave Act of 2017. The legislature did not act on the governor’s bill and instead passed HB1, which the governor vetoed while simultaneously announcing actions to expand paid leave benefits within the executive branch of state government and creating the Committee on Paid Leave Policy to study the issue. After conducting in-depth research and over 100 interviews with workers and business owners across the state, the Committee issued its final report to the governor in November 2017, which identified key flaws in HB1 and recommended solutions. The governor subsequently proposed the Paid Leave Compromise Act of 2018 and the Small Business Relief Tax Credit, both of which are pending before the General Assembly.

Maryland small business operators and workers can contact the Office of Small Business Regulatory Assistance at Small.Business@Maryland.gov.

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