LEGISLATORS CONSIDER MANDATING SICK LEAVE, BUT WILL IT MAKE BUSINESSES ILL?

Volume 29, Issue 520 July 21, 2008

Matthew Gever

Go to work or stay home when you are sick? For some workers, this choice does not exist. Now lawmakers are weighing in.

About 43 percent of workers in private industry nationwide—approximately 66 million people—do not receive any form of paid sick leave from their employers, according to data from the U.S. Bureau of Labor Statistics. Most of these workers, according the data, are in lower wage service sector jobs or are part-time or temporary.

At least 11 states are considering bills that would mandate paid sick leave time for these and all workers. "Simply put, workers should not live in fear of being fired when they take a day off when they or their children are children are sick," said California Assemblywoman Fiona Ma.

In the Golden State, lawmakers are deliberating AB 2716, which would grant paid sick leave to all workers in the state, including part-time and temporary workers. Workers would be able to take this time either for their own medical purposes or for care of a family member. The bill also distinguishes between small and larger businesses, allowing a cap of 5 sick days per year for companies with 10 or fewer employees and up to 9 days per year for larger concerns.

The bill is based on a similar ordinance passed by San Francisco. In 2006, voters in the city passed Proposition F, which then became city law. Like Prop F, the Assembly's bill would grant one hour of sick leave for every 30 hours worked, which employees could start taking after 90 days of employment. Washington D.C. passed a similar law this year.

Costs and Benefits

Supporters say businesses can save money and improve productivity by allowing their employees to take sick time off. For example, a recent study from the Institute for Women's Policy Research estimates that providing sick leave would save California businesses $959 million per year, mostly through less employee turnover. The study also estimates significant cost savings as employees would have quicker recovery times and less contagion, as sick employees would not come to work where they would spread the disease to others. "This is especially true in the food service industry, with its preponderance of hourly workers and the high risk of food-borne illness," said Connecticut Senator Edith Prague.

Some, however, say the laws will lead to job loss as small businesses are unable to handle the new burden. "The legislature needs to understand the damage mandates inflict to the engine of the California economy," said John Kabateck, executive director of the California branch of the National Federation of Independent Business (NFIB). The federation commissioned its own study of AB 2716 and came up with starkly different predictions about its effects.

According to that study, California businesses will be forced to spend an additional $4.6 billion in administrative costs to implement the mandate and firms all over the state stand to lose an estimated $59.3 billion in sales over five years. The loss in revenue will end up costing the state 370,000 jobs within five years of implementation, NFIB says. "Lawmakers need to provide a better business environment to protect jobs in California, not set-up more roadblocks," said Senator Mark Wyland.

Industries in other states have expressed similar concerns. "Companies need flexibility to determine which time-off policies work best for their workforce—some companies just can't afford to provide the same level of benefits as other companies,” said Joseph F. Brennan of the Connecticut Business & Industry Association. The Nutmeg State this session considered SB 217, which would have mandated sick leave for all workers, accrued at the rate of 1 hour for every 40 worked. The bill passed the Senate but did not receive a final vote in the House before Sine Die. The state did enact a different law (SB 65) providing up to 15 extra days of sick leave for blind or disabled workers to allow them to participate in training for guide dogs.

In their most recent sessions, Alaska (SB 258), Florida (SB 152), Illinois (HB 374), Maine (LD 1454), Massachusetts (SB 1073), Minnesota (HF 1334), New York (AB 11436), North Carolina (HB 1711) and West Virginia (SB 18) also considered bills similar to California's and Connecticut's.