Paid sick leave laws: What do you think?

You may take sick time, or paid time off, for granted, but 40% of the American private-sector workforce has no paid sick days. That is actually an optimistic average, because for low-wage industries, the percentages are much higher. For example, 79% of food service workers and hotel workers lack paid sick leave. To put that in perspective, nearly 60% of families below 200% of the poverty line have a family member who works full time, year-round.

Worldwide, at least 145 countries ensure access to paid sick days for short- or long-term illnesses, with 127 providing a week or more annually, but there is no U.S. federal law related to paid leave for private-sector workers. Efforts in Congress to gain approval of paid sick leave legislation remain stalled, so cities and states are taking the lead. Spirited campaigns are underway in Alaska, Arizona, California, Florida, Hawaii, Illinois, Iowa, Maryland, Michigan, Minnesota, Nebraska, New Jersey, New York, North Carolina, Oregon, Pennsylvania, South Carolina, and Washington.

Following Connecticut’s lead, Vermont and Massachusetts could be the next states to enact employer paid sick leave laws. The state of Connecticut and five cities (San Francisco; Washington, D.C.; Seattle; San Francisco; and Portland, Ore.) currently mandate that employers offer paid sick leave to at least a portion of their workforce. Closer to home, Milwaukee passed a mandatory paid sick leave law, but it was later struck down because Wisconsin has a constitutional provision that specifically bans mandatory sick leave laws. 

Jersey City, N.J., mandated sick leave within private businesses effective January 2014, when the city legislated that companies with fewer than 10 employees must allow them to earn five days of unpaid sick time per year. Companies over that threshold must give at least five days of paid sick time. There is a grace period of at least 90 days before sick time can be used, to allow for probationary periods, etc. It is expected that the new law will benefit approximately 30,000 workers. In the state’s second largest city — a corporate haven known as “Wall Street West” — 20% of families live on less than $25,000 per year.

New York City followed suit for companies that employ more than 20 workers. Also this past January, the City of Portland, Ore., decided that businesses with six or more employees must provide up to 40 hours of paid sick leave annually. Smaller businesses are required to allow employees to accrue 40 hours of unpaid sick time per year.

Social-economic effects of mandating sick leave

San Francisco first passed a provisional law in 2004. It outperformed its neighboring counties in terms of job growth in the years after its sick leave program went into effect. In November 2006, voters then passed a ballot initiative making the city the first in the country to guarantee paid sick days to all. Workers in businesses with 10 or fewer employees earn up to five days per year, while workers at larger businesses earn nine days. Results are mixed: While overall employment rates in San Francisco have not suffered, 28% of employees in the “bottom wage quartile” faced layoffs or reductions in hours as a result of the mandate.

Washington, D.C., enacted mandatory sick leave in 2008. It audited the effects in June 2013 to determine if, as detractors speculated, the new regulations would cause area businesses to relocate. A majority, 87.5%, said they did not. Ironically, the audit found that some eligible temporary District government employees did not receive paid sick leave because their HR departments did not have a system in place to track earned benefits.

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The Seattle City Council’s law went into effect in September 2012. Businesses with the equivalent of five to 49 full-time employees must provide at least five days of paid sick leave per year. Those with 50 to 249 employees must provide seven days of paid sick leave, and companies with 250 or more employees must provide at least nine days. Businesses less than 2 years old are exempt. There is a six-month waiting period before claiming paid time off.

In late 2013, Seattle commissioned a study by the University of Washington to determine the impact of the law. Many businesses initially found it confusing, as it also applies to companies based outside the city that do work within the city. Some business owners remained philosophically opposed to government interference, and low-margin businesses reported an additional payroll expense of 1%-2% due to the tracking requirements. While no mass exodus of businesses was found (as opponents predicted), the final report is due next March.

A 2013 study by the Employment Policies Institute found that many businesses responded to a paid sick leave mandate in Connecticut by “reducing paid leave, scaling back employee benefits, cutting back on hours, reducing wages, or raising prices … and … about 24% of employers that responded to the survey said they’d hire fewer employees as a consequence of the law and 10% admitted that the law had caused them to limit or restrict their expansion within the state.”

Connecticut’s law was signed by Gov. Dannel Malloy in 2011 and went into effect in January 2012, with only narrow approval from the Legislature. The law requires employers with 50 or more employees to allow “service workers” to earn one hour of paid sick leave for every 40 hours worked, up to 40 hours per year.

Business groups like the National Federation of Independent Business are rejecting emerging campaigns largely on behalf of small businesses, citing the legislation as an untenable financial hardship.

What do you think our national posture should be? Should all workers be granted minimum or basic sick leave coverage — making it a new entitlement for the U.S. labor force — or should Americans, due to core values and the rights granted to business owners in a free-market, capitalistic society, limit government’s ability to impose further economic restraints on U.S. businesses?

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