LEL Flash | Issue: May 2014

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Issue: May 2014

Special Feature

A Dual Perspective on City-Mandated Paid Sick Leave Policies

Since 2006, several cities have enacted ordinances requiring employers to provide a specified number of paid sick days per year to employees who have some level of work activity in those cities. To date, San Francisco; Seattle; Portland, OR; Long Beach, CA;1 New York City, Jersey City and Newark,2 NJ; Philadelphia;3 and Washington, D.C., plus the state of Connecticut have passed mandatory paid sick leave laws. Although these laws vary--some apply only to larger employers, or require the provision of unpaid, rather than paid sick days for smaller employers--they generally provide anywhere from five to fourteen paid sick days per year for employees to care for themselves or a dependent family member.

At the same time, ten states (Georgia, Wisconsin, Louisiana, North Carolina, Tennessee, Massachusetts, Kansas, Indiana, Florida, and Arizona) have adopted laws that prohibit local governments from passing paid sick leave laws. Fourteen other states are considering similar bans.

Employee Perspective

It may come as a shock to readers that almost 40% of non-union workers in the United States, including 80% of the lowest-income workers, lack any access to paid sick time.4 Unlike 85% of the world's nations, the U.S. does not guarantee paid sick leave to its workers.5 Far from a luxury, paid sick days are a basic benefit that ensure the job security of American families. No worker should have to worry about losing her job because she is sick.

Paid sick leave improves the health of workers and their dependents. Without it, sick children and adults are less likely to visit a doctor, aggravating their medical conditions and extending recovery times. Workers without access to paid sick leave are five times as likely to take their dependents to the hospital because they are unable to visit a doctor during normal working hours, thereby increasing public healthcare expenditures.6 Nationally, providing all workers with paid sick time would reduce visits to hospital emergency departments and save $1 billion per year in medical costs, including $500 million that is currently covered by taxpayer-funded programs.7

Sick workers also pose a danger to those around them. They spread illness to other employees, reducing overall productivity. In service-oriented fields such as restaurant work, sick employees can pose a disease risk to the general population. And without access to paid sick leave, workers are twice as likely to send a sick child to school or day care.8 As our population ages, an increasing number of seniors will require assistance from their working relatives to attend doctor's appointments or assist in medical emergencies.

Providing paid sick time is also good for business, as the many companies that already provide this benefit have discovered. Paid sick time reduces employee turnover, both voluntary and involuntary, and improves productivity by ensuring that all workers on the job are functioning at full capacity.9 Since enacting a paid sick days law in 2007, San Francisco has enjoyed proportionately better rates of total employment than its surrounding counties.10 Those jurisdictions that have already enacted paid sick leave laws understand that paid sick days help not only workers, but also their families, employers, and the general public.

Management/Employer Perspective

Employers are sympathetic to the need for sick leave. Most employers allow some form of sick leave (in addition to any accommodation obligations under disability law); but not all provide paid sick leave. The reasons for not adopting a paid sick leave policy vary, but usually involve practical considerations, such as employee turnover, availability of shift-swapping to avoid income loss, minimizing administrative burdens, limiting sick leave abuse, and providing more effective HR incentives. There is little to no evidence that paid sick leave laws improve public health.

Too often, employees treat paid sick leave as another form of vacation or personal time off. Some employees will use the days even though they are not sick knowing the employer likely will not catch them. Other employees who are sick will still come to work hoarding their sick leave days for cash-out or extended periods of leave later. Search the term "sick leave abuse" to access numerous articles about this increasing problem and the associated administrative burdens, which employers can minimize by allowing sick leave, but not paying for it. Unscheduled worker absences also produce indirect costs such as overtime pay for other employees, hiring temps, missed deadlines, lost business, reduced productivity, and lower moral on the part of the employees who have "cover" for absent workers.

Mandatory paid sick leave laws are dense and complex. They go well-beyond providing a bank of paid time off and impose a labyrinth of terms, conditions, and micromanagement requirements (such as no caps on accruals, mandatory carryover provisions, and leave-tracking requirements) that create unnecessary burdens and unforeseen consequences.

They often require extensive modifications to existing policies and payroll systems of employers who provide paid sick leave programs (even though more generous than these new laws). Additionally, most paid sick leave laws are exclusively driven by the number of employees in the employer's workforce and do not account for great differences from business-to-business and industry-to-industry. If more jurisdictions adopt paid sick leave laws, expect to see a growing patchwork of onerous, confusing, and inconsistent requirements, including:

  • Multi-Jurisdictional Issues: Employers with multi-state or multi-city operations will encounter significant payroll administration issues and struggle to comply with all of the legal variations. Administering multiple policies can be confusing to supervisors and can create employee relations issues when employees do not understand why a similar employee in a different city may be receiving different sick leave benefits.
  • Accrual Rate Issues: Most paid sick leave laws require a minimum accrual of one hour for every thirty hours worked, which the employer must follow in a particular city even if it currently has a different policy. Some cities go further and have a varying accrual rate based on the size of the employer. Employers are not always permitted to cap accruals.
  • Definition Issues: The paid sick leave laws do not use a uniform set of definitions. For example, the definition of a family member varies from city to city.

Mandatory paid sick leave laws impose unfunded mandates and take away the ability of employers to administer their human resources practices in a fair way based on the characteristics of their business, their industry, and their employees.

1Long Beach's paid sick leave law is limited to certain hotel workers that work in the city. Hotels with more than 100 rooms are required to provide a minimum of five paid sick days per year to employees.

2Newark's paid sick leave law will go into effect on May 29, 2014.

3Philadelphia's living wage law covers businesses that contract with the city, receive city subsidies, or lease office space in buildings that receive city subsidies. A broader paid sick days law has been passed by the Philadelphia City Council three times, but each time was vetoed by the Mayor.

4U.S. Bureau of Labor Statistics, Employee Benefits in the United States (March 2013) at Table 6.

5Dr. Jody Heymann, If Companies Really Mean Business on Work and Family Issues . . ., Huffington Post (May 6, 2010).

6Tom W. Smith & Jibum Kim, Paid Sick Days: Attitudes and Experiences, National Opinion Research Center at the University of Chicago for the Public Welfare Foundation (June 2010) at 2.

7Institute for Women's Policy Research, Access to Paid Sick Days Would Reduce Health Costs (July 11, 2011).

8Tom W. Smith & Jibum Kim, Paid Sick Days: Attitudes and Experiences, National Opinion Research Center at the University of Chicago for the Public Welfare Foundation (June 2010).

9Vicky Lovell, Institute for Women's Policy Research, Valuing Good Health: An Estimate of Costs and Savings for the Healthy Families Act (April 2005).

10John Petro, Drum Major Institute for Public Policy, Paid Sick Leave Does Not Harm Business Growth or Job Growth.

Katherine Greenberg is a Staff Attorney at The Legal Aid Society's Employment Law Unit, where she represents low-wage workers in discrimination, FMLA, wage theft, and pension claims. Her particular areas of focus include discrimination against caregivers, pregnant women, and workers with disabilities. Michael J. Killeen, who is a management labor/employment attorney at Davis Wright Tremaine LLP and a co-founding member of the national Wage & Hour Defense Institute, wrote the management perspective portion of this article.

Contents

Opening Page

Comments from the Chair

Flash Co-Chairs:
Jeremy J Glenn, Meckler Bulger et al | Monique R. Gougisha, Ogletree Deakins | Amy F. Shulman, Broach & Stulberg LLP | Jennifer R. Spector, National Labor Relations Board

American Bar Association Section of Labor and Employment Law
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