Paid Sick Days Advance Nationally, Stall Statewide but gain Momentum Locally

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On Labor Day, 2015 President Obama signed an executive order taking aim at federal government contractors and imposing new requirements on certain employers to provide paid sick days to employees.

Executive Order 13706 requires that certain federal contractors provide employees with up to seven days of paid sick leave per year. The order closely mirrors provisions in paid leave legislation (the “Healthy Families Act”) that failed to advance in Congress.

The U.S. Department of Labor has now announced a proposed rule to implement the order. The White House estimates that an additional 300,000 American workers will be allowed to accrue and use paid days to meet several needs: 

(1) for an employee’s own illness, injury, medical condition or when an employee needs to obtain diagnosis, care, or preventative care; (2) to care for a child, parent, spouse, domestic partner, or “any other individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship” who has an illness, injury, medical condition, or who needs to obtain diagnosis, care, or preventative care; (3) for domestic violence, assault, or stalking situations resulting in an illness, injury or medical condition or the need for obtaining diagnosis, care, or preventative care; or (4) to obtain additional counseling, seek relocation, seek assistance from a victim services organization, take related legal action for the employee or one of the above-listed individuals in domestic violence, assault or stalking situations.

The executive order provides that covered contracts entered into after January 1, 2017, must contain a clause in which the contractor certifies that all of its employees, in the performance of the contract or any subcontract thereunder, “shall earn not less than 1 hour of paid sick leave for every 30 hours worked.”  In addition, the contractor and any related subcontractors must permit employees to accrue up to 56 hours of paid sick leave per year.

According to John Sarno, president of the Employers Association of New Jersey, there are 6,393 defense contractors in New Jersey, located in every county. 

About 70 percent of employers already provide some form of paid sick leave, and 90 percent offer paid time off.

It's also estimated that 1.2 million workers in New Jersey don't receive paid sick leave.

To date, eleven municipalities have passed their own paid sick leave ordinance, with New Brunswick being the latest.

But the city council of Plainfield voted down a proposed ordinance that would require local businesses to offer employees paid sick time.

Under a bill stalled in the state legislature, businesses with 10 or more employees would be required to let workers earn at least 72 hours of paid time off that they could use to stay home when they're sick or to take care of ill relatives. Businesses with fewer than 10 employees would be required to offer their employees at least 40 hours of sick time. Workers would accrue one hour of sick leave for every 30 hours worked.

“It could be that mandatory sick leave may be a solution in search of a problem,” says Sarno 

But the U.S. is an outlier among most developed countries in its lack of guaranteed sick time for workers. According to recent data from the Bureau of Labor Statistics, nearly 40 percent of private-sector U.S. workers receive no sick leave at all, many of them in lower-wage industries like restaurants and retail.

The Economic Policy Institute estimates that “a typical family of four with two working parents who have no paid sick leave will have wiped out its entire health care budget for the year after just three days of missed work.”

Paid sick leave is mostly about low margin businesses that employ minimum or low wage workers without benefits, including paid sick days. Both the employer and employee are barely making ends meet at that end of the economy, Sarno says

“These employers will say that they can’t afford it.”

But advocates for paid sick days, say that providing such time paid sick goes a long way increasing morale and productivity without increasing costs that much.

Data from Connecticut, a state that mandated paid sick days back in 2011, supports this view.

In a survey of 251 Connecticut employers, researchers from the Center for Economic and Policy Research and the City University of New York showed that “a large majority of employers reported that the law did not affect business operations and that they had no or only small increases in costs … employers saw decreases in the spread of illnesses and increases in morale.” In all, the study found that today “over three-fourths of (Connecticut) employers reported that they were very supportive or somewhat supportive of the paid sick days law.”

In New Jersey, the legislation foundered on a disagreement over whether the state law should prohibit municipalities from passing their own laws in the future.

Lines are still drawn in the state. The New Jersey Election Law Enforcement Commission (ELEC) found the bill to be the most lobbied piece of legislation in 2014.