The StartUp Blog at PartnerUp

Ohio voters will decide whether or not to approve the Healthy Families Act on their ballots come November. The act, which will guarantee most full-time employees seven paid sick days a year, could cause Ohio to lose 75,000 jobs over the next five years, according to a recent study by the National Federation of Independent Business.

About 20 percent of those lost jobs would occur in small businesses that employ 20 or fewer employees, even though they are exempt from the mandate. Why? Because it would cause large businesses to cut jobs or reduce production, therefore hurting small business suppliers, according to researchers. Companies that don’t already grant at least seven days will also face up to 15 percent in increased labor costs. In the long run it could cost Ohio employers $1.17 billion in added bookkeeping and management costs and $9.4 billion in lost sales, the study said. The act could also force cuts in other employee benefits such as health care or vacation.

Last November, San Francisco voters approved the nation’s first mandatory paid sick leave law, which took effect last February. Today Ohio is the only state with such an act on its upcoming ballot, but several other states are looking into mandated paid sick leave. They include Connecticut, Florida, Maine, Maryland, Massachusetts, Minnesota, Missouri, Montana, North Carolina, Pennsylvania, Vermont and Virginia.

Voters need to be weary of jumping on the paid sick leave bandwagon. It may sound nice to have seven guaranteed sick days throughout the year, but those days aren’t going to do you any good if you become one of the predicted 75,000 who lose their jobs in the process.

The open-source software movement (also known as the free software movement) received a boost Wednesday from the federal appeals court in Washington, according to an article from the New York Times. The court ruled that “just because a software programmer gave his work away did not mean it could not be protected.”

For those of you who aren’t familiar with the ethics of software and the open-source debate, basically open-source software development occurs when programmers willingly contribute code, as well as their own time and effort, to a collaborative development process without any kind of financial compensation. In essence, they work for the fun of it.

One of the biggest obstacles facing the movement, however, is the ambiguity of open-source licensing. This recent ruling, which is a reversal of a San Francisco federal court ruling, gives the open-source community a significant bump in the right direction. Up until this point anyone was free to modify the programming created by the open-source group. Now they can still do so, but only as long as the open-source programmers retain the credit for their work and can distribute the work with their own instructions.

The ruling provides a strong legal backstop for hardworking members of the open-source community, allowing them to freely do what they’re passionate about and still receive credit for it. I would personally like to congratulate the open-source community on its victory. This is not only great for those involved in the movement, but it’s also important for society as a whole and our ability to use, adapt and learn from highly collaborative software development.

This is a hotly contested issue, so I’d like to know how you all feel about it. Whether you’re a member of the open-source community or not, what do you think of this ruling or the debate in general?

Two important small business research programs were unanimously reauthorized by the Senate Committee on Small Business and Entrepreneurship last week. The Small Business Innovation Research (SBIR) program and the Small Business Technology Transfer (STTR) program will both be around for at least another 14 years.

The SBIR program provides funding for small businesses to explore their technological potential. Enacted in 1982, the SBIR program requires 11 federal departments and agencies to set aside a portion of their research and development (R&D) money for small businesses. It’s no secret that the entrepreneurial sector is ripe for technological innovation. Unfortunately, conducting intense research and development is usually beyond the means of a small business. By reserving this funding, the SBIR program enables small innovative technology companies to compete with larger businesses.

The STTR program reserves a percentage of federal R&D funding for both small businesses and nonprofit research institutions. The idea behind the STTR program is that research institutions are vital to developing high-tech innovations, but rarely is the innovation enacted in a practical environment. Small businesses on the other hand can enact technology in a practical environment, but don’t have the time or resources to develop them. The STTR program forms partnerships between the two entities and provides them with joint funding. Small businesses can then profit from the commercialization of the technologies.

To become a part of either of these programs you have to meet certain requirements. They include:

• American-owned and independently operated
• For-profit
• Principal researcher employed by business
• Company size limited to 500 employees

With the reauthorization of the bipartisan bill, however, comes the compromised inclusion of small businesses that are majority owned and controlled by multiple venture capital companies, which was a hotly contested issue.

This is a great opportunity for any small tech startup looking for funding to help expand its reach. Both programs are highly competitive, but then again so are most kinds of funding. If you’re at all interested, I encourage you to look into these programs. They could be the ticket to taking your business to the next level.

Small businesses have been a vehicle for economic expansion and innovation for a long time now. As time passes, however, the success of small businesses is being undermined by “a combination of complex regulations and spiraling regulatory compliance costs,” according to a release from the House Committee on Small Business Subcommittee on Regulations, Health Care and Trade.

The Subcommittee met this past Wednesday to examine the need for reforms to aid small businesses and jump start a slowing economy.

Small businesses are a critical component of the U.S. economy, yet they face regulatory compliance costs that soar 45 percent higher than those of large corporations. Tax regulations are costing small firms much more, giving large firms a disproportionate advantage. In addition, time-consuming paperwork is impeding on their ability to compete. The odds are stacked against small firms, and they haven’t caught much of a break in recent years.

Several months ago the Committee took a giant leap forward, however, introducing the Small Business Regulatory Improvement Act (H.R. 4458), “the most comprehensive reform effort in a decade to provide new tools for the nation’s 26 million entrepreneurs to navigate the regulatory process.” The bill would amend the Regulatory Flexibility Act to require federal agencies to provide more analysis of the economic impact of regulations on small businesses. It would also require more detailed periodic reviews of regulations.

Though I appreciate the willingness of the federal government to spend the projected $100 million analyzing and reviewing problematic regulations, perhaps it might be a wiser investment to simply refrain from implementing such regulations in the first place—just a suggestion.

Exactly one year ago minimum wage increased to $5.85 per hour. Today it increases to $6.55 per hour. At this same time next year it will once again go up, this time to $7.25 per hour.

There is a clear impact here for small business owners across America. When minimum wage increased last year it didn’t have as great of an impact because it didn’t exceed many of the state-mandated minimum wage requirements. That, however, is not the case this time. And the chance that the federal rate will exceed your state’s rate next year becomes even more likely.

There’s no doubt that workers all over the country are pleased with the increase, considering about 2 million of them will receive a raise today, but the increase will do little more than offset the rising cost of products like food or gasoline. In turn, many small businesses are going to have to raise their prices to offset the higher wages, which has a large impact on the price of food because many agricultural workers work at minimum wage.

On the flip side, minimum wage has not risen in congruence with inflation over the years. According to a Labor Department inflation calculator, minimum wage should be about $10.06 per hour, a drastic increase from it’s actual rate.

So I’m curious to see how others view the situation.  Is raising the minimum wage a positive thing for the American economy, putting more money in the hands of consumers, or is it just driving up prices and dragging down small business owners? I don’t know the answer, but I’d love to know what you think.

DISCLAIMER: This is a business-friendly blog, and I am a business-friendly person. The opinions expressed in the following post, however, are slightly left of the middle. Having said that, I encourage you all to hear me out from beginning to end before reaching for your torches and pitch forks. If you disagree, please post your comments.

Since it was signed into law in 1993, the Family Medical Leave Act (FMLA) has encountered a whirlwind of opposition from small business advocacy groups, particularly the National Federation of Independent Business (NFIB). I understand why the NFIB feels compelled to reject such legislation because of its implications for small business, but I can’t say that I necessarily agree.

In its original form the FMLA requires that businesses of 50 or more employees allow up to 12 work weeks of unpaid leave during any 12-month period for reasons such as child birth, adoption or a serious health condition of an employee or an immediate family member of an employee, according to the Department of Labor. Earlier this year President Bush expanded the FMLA for the first time in 15 years to provide two new provisions for military FMLA leave. Then just a few weeks ago the House passed a bill that could create a new paid leave component of the FMLA.

The NFIB argues that expanding the FMLA “will drastically increase the amount of paperwork and money a small business owner must spend to comply, potentially affecting other benefits offered or their ability to grow their business and add new jobs.” I don’t disagree with this argument. There is certainly the potential for an increase in paperwork and expenses. In fact, it’s a probability, and that’s not fair to the small business community—though I do think it’s far-fetched propaganda to say that business owners won’t be able to grow their businesses or add jobs just because of the FMLA.

My problem with outright opposition to the FMLA, however, lies in the fact that it is a devaluation of the importance of the health and well-being of employees and their family lives in comparison to business and economics, or at least that’s the message it sends. Which is really more important? Business and economics are critical components of American life. There’s no doubt about it. But they don’t surpass the importance of health and family, at least not for me, and probably not for most other American workers. The NFIB is concerned with the burden such a law might place on businesses, and rightfully so, but then business owners need to be concerned with the personal burdens that are placed on employees and their families in the absence of adequate family and medical leave programs. (more…)