Sick leave grows as divisive issue for small firms

2013-03-31T00:00:00Z Sick leave grows as divisive issue for small firmsThe Associated Press The Associated Press
March 31, 2013 12:00 am  • 

Two months after a severe flu season forced millions of workers to stay home, paid sick time is becoming an issue for many small-business owners.

City councils in Portland, Ore., and Philadelphia earlier this month approved laws requiring employers to give their workers paid sick leave. And two Democratic lawmakers introduced a bill in Congress that would make paid sick leave a federal requirement.

There's a great divide among business owners over the issue.

On one side are opponents who say paid sick time creates financial and administrative burdens for businesses that are struggling with a still-recovering economy and uncertainty about health-care costs and federal budget cuts.

Others argue that it makes for a happier workplace and encourages employees to stay home instead of coming to work and infecting everyone around them.

"It increases morale, it increases loyalty, it provides a much safer work environment," says Andy Shallal, owner of Busboys and Poets, a chain of four restaurants in the Washington D.C., area. He was already giving his workers paid sick time before the Washington City Council passed a sick leave law in 2008.

It's particularly important in the restaurant business that sick employees don't come to work. "It's gross. Nobody wants to have anyone preparing their food when they're sick," Shallal says.

A lot of Americans get paid sick leave, including many who work at small businesses. A study issued in July by the Bureau of Labor Statistics found that 66 percent of small businesses, those with up to 499 workers, provided paid sick leave. Among companies with fewer than 50 workers, half provided leave. Eighty-two percent of workers at companies with 500 or more employees have paid sick leave.

Lawmakers have been stepping in to get paid sick leave extended to more workers. San Francisco is widely believed to be the first major city to enact a paid sick-leave law.

The law, which requires that sick time be given to all workers, took effect in 2007. Since then, Washington, Seattle and Connecticut have enacted laws and Portland's City Council passed its bill on March 13.

The laws aren't identical, but all generally provide for workers to accrue sick time and to also use it for family illnesses and some types of emergencies.

Paid sick leave has run into roadblocks in other cities. Philadelphia's City Council passed its bill March 14, but Mayor Michael Nutter vetoed a similar bill in 2011. He hasn't decided whether he'll sign the latest bill, spokes-man Mark McDonald said.

In Milwaukee, voters in 2008 approved a referendum creating a paid sick- leave ordinance, but it was nullified by a subsequent state law that banned local governments from enacting such laws. And in New York City, a sick leave law has stalled in its City Council.

Opponents of mandatory paid sick leave say it will hurt small businesses. Some also argue that the government shouldn't intrude in the relationship between companies and their workers.

"Any time you have a government mandate on small businesses, that takes away their options, their flexibility," says Andy Markowski, director of the National Federation of Independent Business in Connecticut, where a mandatory sick leave law took effect early last year. "With paid sick leave, a business might not be able to afford a benefit package that has benefits that are generous."

Among the consequences cited by opponents of paid sick time: Companies will have to pay overtime to replacement workers, financially strapping businesses that are already struggling in an uncertain economy.

The added expense will prevent them from expanding, or hiring other workers. Keeping track of accrued sick time will force an owner or another employee to take time away from other critical tasks.

The San Francisco law has created more paperwork for Basil Enan, CEO of CoverHound, an insurance company. He estimates that tracking how much sick leave his workers accrue takes up 10 percent of his time.

"I'm dealing with the regulatory burden rather than responding to employees' needs," says Enan.

Those issues are likely to be raised in Congress, where Rep. Rosa DeLauro, D-Conn., and Sen. Tom Harkin, D-Iowa, have reintroduced the Healthy Families Act, which would require that workers be allowed to earn up to seven days of paid sick time a year.

DeLauro has introduced such a bill in every Congress since 2004. In the last Congress, the bill didn't make it to the House floor.

DeLauro expects opposition from small businesses, but she notes that companies with fewer than 15 employees would be exempt.

Many small-company owners say paid sick time is good business.

"We, like many bookstores in the country, do not pay exceptionally well," says Bradley Graham, owner of Politics & Prose in Washington.

"We're very happy to be able to offer additional compensation to the staff in the form of paid sick leave."

Another reason why many business owners support the laws is they don't want people coming to work and infecting co-workers and customers.

"It's much better for that sick employee to be at home - even employers that are struggling realize that's important," says Ophelia Galindo, a human-resources consultant with Buck Consultants in California.

NOT OVERUSED

Workers generally take few sick days, a study issued last month by the federal Bureau of Labor Statistics showed.

Those in industries including financial services, information, transportation and professional services, took an average of about four sick days a year. Those in the leisure, hospitality and construction industries took about two days.

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