By: Les Davies, Region 5 Advocate
Galena is a city with a rich heritage woven into the tapestry of early to mid nineteenth century Americana. Lead and silver mining made Galena a boom town in the early 1800s when the city emerged as the largest steamboat hub north of St. Louis on the Mississippi River. The De Soto House was a striking symbol of its prosperity and the largest hotel in Illinois. It was from the second story balcony of the De Soto House that crowds gathered to hear the words of both Abraham Lincoln and Stephen Douglas in 1856 and 1858 respectively; it was in this storied hotel that Ulysses S. Grant made his campaign headquarters in 1865 and it was in the De Soto House that the Office of Advocacy met with small businesses to discuss their regulatory barriers on July 19, 2018
Much has changed since those storied times; tourism has replaced lead and silver mining, steamboats no longer ply the Mississippi and Galena Rivers and the population is a fraction of its heyday. Today, small business is at the heart of Galena’s viability more than ever. In rural Jo Daviess County – of which, Galena is the most populous city and the County Seat – there are nearly 650 small businesses employing close to 6,800 employees. Small business accounts for 95 percent of all businesses by number and generates more than $200 Million in payroll. 88 percent of small businesses in Jo Daviess County have fewer than 20 employees. When it comes to compliance with federal regulations, the Office of Advocacy’s research shows that the burden falls most heavily on these small businesses.
Small business struggles with over burdensome federal regulations are not unique to Galena and are shared with even the largest metropolitan areas.
Quality Employees
This is one of the first things that businesses bring up – “where can I find quality employees”? Youth apprentice training programs are one way to bring up a new generation of qualified workers but many times federal regulations hamper the ability to train those under the age of 18. The Department of Labor is currently taking a look at these standards with an eye to easing some of the restrictions facing high school students and allow them to take full advantage of training and apprenticeship programs and ease the burden facing many businesses.
Joint Employer Rules
We were told that many times a corporation is reluctant – or may even refuse – to give counsel, advice or training to its franchisees because of joint employer rules. Past National Labor Relations Board decisions have created liabilities for parent companies for actions taken by franchisees. The current NLRB has overturned a past decision and work is being done to clarify these complicated relationships.
Overtime Rule
The companies we spoke to in Galena took a “wait and see” approach to the impending overtime rule, opting to wait until the last minute to implement any changes, which paid off since the rule was stayed by a court order and was never implemented. Since the stay they have converted many positions to hourly and offer overtime to most employees, mostly due to the above mentioned employee shortages. They are waiting to see what the Department of Labor decides as a new threshold for salaried employees’ overtime eligibility.
These only represent three of the barriers these few businesses mentioned. Others include the rising cost of health insurance, competitive wages and employee tipping rules and the loss of a skilled elderly workforce. Removing labor and other regulatory barriers that these small businesses deal with will go a long way to fix the shortage of employees that hamper viability and growth.