In his sixth State of the Union address on Tuesday, President Obama plans to propose his third costly mandate for low-wage employers — up to seven days of paid sick leave per year.
If you count both proposals for minimum-wage hikes ($9 an hour in 2013 and $10.10 in 2014), this year's will be No. 4. The first was ObamaCare, with its employer mandate to offer affordable health coverage or pay a fine.
Together, they could raise the cost of employing a full-time minimum-wage worker by as much as $5.06 an hour — a 65% jump vs. base compensation in states aligned with the $7.25 federal minimum. That includes:
The proposed minimum-wage bump of $2.85 an hour, plus another 22 cents in employer payroll taxes.
The ObamaCare mandate penalty in 2015 of $2,080 per worker for large employers who don't offer coverage. The fine is nondeductible, so it equates to about $3,420 in wages for a profit-making employer paying a combined 39.2% state and federal tax rate. That comes to $1.69 an hour for a 40-hour worker.
Up to seven days of paid sick leave, adding 30 cents per hour to compensation (assuming a worker takes that time off).
Heaping on mandate after mandate without paying heed to the growing demands that government is putting on low-wage employers comes with a risk that workers will be priced out of some of those jobs.
The Congressional Budget Office expects that "employers will probably pass along the cost of (ObamaCare employer mandate) penalties to their workers in the form of reduced wages."
When CBO estimated that raising the minimum wage to $10.10 an hour could cost a half million jobs, it noted that combining such a hike with ObamaCare fines would put more jobs at risk.Read the rest of the story HERE.
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