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100 Isn’t a Magic Number, So Why Is It Part of the Vaccine Mandate?

When the Biden administration announced an upcoming mandate that employees be vaccinated or tested regularly at companies with 100 or more employees, business leaders responded with a barrage of questions. Among smaller companies, one loomed especially large: Why 100?

It’s an appealingly round, easy-to-remember number, and it captures a broad swath of the American work force. President Biden estimated that his order would apply to 80 million employees and cover two-thirds of all workers.

But as a dividing line between a “big” business and a “small” one, it’s a threshold not found in any other major federal or state law. There was no explanation for how or why the number was chosen. And for entrepreneurs who employ a smattering of workers, that’s an increasingly common challenge: Every time lawmakers invent a new regulation, they also make up a new definition of which businesses count as small.

The Affordable Care Act set 50 as the number of workers after which employers would be required to offer health insurance. That edict, which took full effect in 2016, led to an intense, vocal backlash from owners who feared that the requirement would bankrupt them, with some even paring back their business to keep their employee roster under the limit.

The mandate’s actual costs turned out to be fairly muted for most — the law helped stabilize insurance prices in the notoriously erratic market for small-group plans — and, after surviving many legal and political efforts to dismantle it, the health care law has become a bedrock piece of federal policy. So why not use 50 employees as the boundary for the vaccination mandate?

The White House isn’t saying; officials did not respond to repeated questions about the 100-person criterion. The Labor Department’s Occupational Safety and Health Administration, which is responsible for drawing up the rules, has not yet explained how and when the mandate will be enforced.

Several small-business trade groups, which typically greet any new proposed regulation with apocalyptic outrage, attacked the planned rule as burdensome and coercive. The National Federation of Independent Business accused the administration of “dragooning” employers into “executing the government’s vaccinate, test or fire policy.”

But no one in the business community seemed terribly surprised that tossed in was an entirely new yardstick for separating small companies from large ones. The number seems “capricious and kind of arbitrary,” but that’s often the way it is with small-business rule-making, said Alfredo Ortiz. He is the chief executive of the Job Creators Network, a right-leaning advocacy group that opposes the plan.

For smallish companies, employment law is an obstacle course of decrees that kick in at a jumble of different growth points. Most become subject to the federal Fair Labor Standards Act — the law that governs minimum wages and overtime rules — when sales surpass $500,000. Like the Affordable Care Act, the Family and Medical Leave Act (which requires employers to grant unpaid leave for childbirth or caregiving) applies to companies with 50 or more workers. One of the few federal rules to draw a 100-person line is the Equal Employment Opportunity Commission’s requirement that businesses that size and larger submit annual reports on their work force demographics.

But if you want a small-business loan? There, the government’s definition is far more expansive. The Small Business Administration, which orchestrated the popular Paycheck Protection Program, generally considers any company with fewer than 500 employees a “small” one. Unless you’re in one of dozens of industries with exceptions, which are detailed in a 49-page document that can seem almost whimsical in its divisions. A company that mines gold ore counts as small if it has up to 1,500 employees, but the limit falls to 750 for iron miners and just 250 for those that extract silver.

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One thing about tiny companies is clear: They vastly outnumber their bigger brethren. The government estimates that there are nearly 32 million small businesses in America. Most have no employees beyond the owner. Their ranks include practitioners of nearly every profession — solo lawyers and accountants, Uber drivers, tutors, gig-working delivery cyclists, artists and writers and musicians and millions of salaried workers with side hustles.

Weed out those businesses and you’re left with six million employer firms, each with a payroll ranging from a handful of people to a few hundred. Only 20,000 companies in the country, according to data from the Census Bureau, are truly large businesses, with 500 or more employees.

To entrepreneurs in that squishy middle, the line between being a little business and a big one can feel pretty fuzzy. Twenty years ago, Franz Spielvogel joined Laughing Planet, which was at the time a single-location fast-casual cafe in Portland, Ore. It was a hit, so he and his business partner opened another Laughing Planet. Then another. Today, Mr. Spielvogel runs 15 locations in three states, with 224 workers.

Mr. Spielvogel said his mini-chain feels like a collection of neighborhood spots, which he likes. “We’re not Sweetgreen,” he said. “We’re not saying, ‘Let’s do 100 stores in the next six months.’ That’s not our mission.”

Being a midsize company can have some pain points, like having a limited legal and human resources infrastructure to handle the thicket of regulations that come with employing hundreds of people. But Mr. Spielvogel enjoys running a company small enough that it is able to preserve that first shop’s ethos and corporate culture. He’s unfazed — and honestly somewhat relieved, he said — by the new vaccination-or-testing mandate. He has been trying to coax his staff to get vaccinated by offering paid time off for each shot, and he hopes a mandate will convince his last few holdouts.

Even some teeny companies are eager to embrace it. Aaron Seyedian, the founder of Well-Paid Maids in Washington, said he wished the mandate extended to companies like his, which has 17 people.

Mr. Seyedian imposed his own vaccination requirement for his staff in August. Several employees grumbled but complied. One did not. He quit last week. Mr. Seyedian said he was sad for the loss and hopes the worker gets vaccinated and returns, but he’s glad the government intends to force more employers’ hands.

“There’s nothing magical about the number 100,” Mr. Seyedian said. “I’d like to see this apply to all companies. I don’t see why it’s limited. The best assistance for people running small businesses is a booming economy. This mandate is a great first step to get there.”

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