Some state legislatures held sessions that affected small businesses

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What it means: Even over the summer, some states held legislative sessions that produced results for small businesses.

Our opinion: From tax cuts to paid vacations, NFIB members helped keep unions in check.

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From requiring salary disclosure and banning employer-sponsored meetings to taxes, paid leave and unemployment insurance reform, there has been no shortage of legislation impacting small businesses in the state’s 2024 legislative sessions.

“Unions in Democratic states continued to flex their muscles, but dedicated NFIB members worked together to block some outrageous proposals,” said Tim Goodrich, vice president of state relations. “Meanwhile, NFIB members in Democratic states helped pass significant tax cuts.”

While most state legislatures were closed this summer, proposals affecting small businesses continued to be considered, with regular and special sessions taking place in several states.

• Tax cuts: State legislatures have continued to expand their tax relief efforts this year. Arkansas and Kansas were the last states to pass tax cut bills this summer. In Arkansas, Gov. Sarah Huckabee Sanders signed a bill cutting the state’s top personal income tax rate from 4.4% to 3.9% and the top corporate tax rate from 4.8% to 4.3%. It’s the third tax cut bill the governor has signed since taking office in 2023, and it’s expected to provide up to $500 million in tax relief in its first year. In Kansas, after several failed attempts to cut the state’s income tax, Governor Laura Kelly signed a law that eliminates the lowest tax bracket and creates a two-bracket tax system set at 5.2% for those earning up to $46,000 and 5.7% for those earning more than $46,001, starting in tax year 2024. The new law is expected to generate savings of up to $2 billion over the next five years.

• Prohibition of employer-sponsored meetings: In recent months, Illinois, Hawaii and Washington have become the latest states to pass proposals banning employers from holding meetings to discuss union formation, known as “captive audiences.” Such proposals are part of a larger trend that began earlier this year, when 14 states considered captive audience proposals. Colorado Gov. Jared Polis vetoed a captive audience measure this summer, a major victory for small businesses. Efforts to pass similar proposals also failed in Rhode Island, Virginia, Maryland and Massachusetts.

• Salary disclosure obligations: Requiring salary and benefit ranges to be disclosed in job postings is also one of the latest trends in Democratic states. Proposals being considered in several states during the 2024 legislative session would require employers to disclose salary and benefit ranges in job postings. Colorado was the first state to enact a salary transparency law in 2019, followed by California, Connecticut, Hawaii, Illinois, Maryland, Nevada, New York, Rhode Island and Washington. Minnesota and Massachusetts were the last states to pass salary range disclosure requirements this summer. Minnesota’s law requires employers with 30 or more employees to disclose salary ranges and benefits in job postings. Massachusetts’ law applies to employers with 25 or more employees.

• Reform of unemployment insurance: As in previous sessions, numerous proposals to reform the unemployment insurance system were put forward in the 2024 legislative session. In Louisiana, Governor Jeff Landry signed a proposal that shortens the duration of unemployment benefits from 26 to 20 weeks and ties unemployment benefits to the state’s unemployment rate. Qualified claimants would be eligible for benefits for up to 12 weeks if the state’s unemployment rate is below 5% and for up to 20 weeks if the unemployment rate is at or above 8.5%. In contrast, several Democratic states considered proposals to extend unemployment benefits for striking workers. In a major victory for small businesses, Connecticut Governor Ned Lamont vetoed a proposal this summer that would have allocated $3 million to striking workers. Similar proposals failed in California, Washington, Hawaii and Minnesota.

• Paid vacation: Last year, Minnesota became the latest state to enact a paid family and medical leave (PFML) program, giving workers up to 20 weeks of paid leave per year for certain life events, such as bonding with a child or caring for a family member. The program, estimated to cost the state up to $1.6 billion in its first year, is funded by employer and employee contributions and takes effect in January 2026. This summer, Minnesota Governor Tim Walz signed a proposal to increase payroll tax withholdings from 0.70% to 0.96%. The new law increases contributions by 37% (an additional $300 million per year). In Connecticut, Governor Ned Lamont also signed a bill amending the state’s paid leave law. The new law expands paid sick leave to employers with 50 or fewer employees. As of August 2024, more than a dozen states have paid leave laws funded by payroll deductions.