Survey Says Mandatory Paid Sick Leave is No Big Deal for Most Employers

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The City of Plainfield has become the twelfth New Jersey municipality to 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.

Opposition to a statewide law has been fierce and is a constant rallying cry for Trenton business lobbyists who say such a law would be an excessive burden on small businesses.

According to John Sarno, president of the Employers Association of New Jersey, about 70 percent of employers already provide some form of paid sick leave, and about 90 percent offer paid time off.

“The issue is highly politicized and has become a symbol for business advocates to hold up as what is perceived as an anti-business state legislature,” says Sarno.

The New Jersey Election Law Enforcement Commission (ELEC) found the statewide bill was the most lobbied piece of legislation in 2014.

“It’s a mandatory talking point for business groups,” says Sarno

But in addition to the dozen municipal ordinances requiring paid sick leave, last year President Obama signed Executive Order 13706, which 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 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 Sarno, there are 6,393 defense contractors in New Jersey, located in every county.

“At some point, supporting or opposing a statewide mandate may be a purely symbolic gesture, a way of defining what side you are on.” Sarno says.

For example, a recent survey by the Association of its members subject to sick day ordinances shows that 86 percent had offered paid sick days to employees before such an ordinance was enacted.

And 79 percent reported that they did not need to change their current policies to conform to the ordinance.

Seventy percent said that their existing policies were actually more generous than what an ordinance required.

Of those employers that were required to tweak their policies - faster accrual, allowing time to be taken in hourly increments, and making paid sick time available to workers who work part-time represented most of the changes.

Seventy percent said that they had little or no difficulty in complying with the ordinance.  But 30 percent found it somewhat or very difficult to comply.

Sarno points out that 15 percent of the Association’s 1,400 members responded to the survey, which provides useful, if not definitive, data.

“Reasonable arguments can be made for paid sick leave. It certainly is a benefit employers in a financial position to do so should offer, not only to prevent sick people from coming to work and infecting others, but to help retain employees,” says Sarno.

“For most EANJ members, [mandatory paid sick leave] is a non-issue,” he adds.

However, advocates for paid sick days say that mandating paid sick time goes a long way to increase 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.”

But small businesses who do not provide paid sick days say they can’t afford to offer them to employees and that it would be too burdensome to administer.

“Paid sick leave is really about struggling, small, low margin businesses that employ minimum or low wage workers, often working part-time, without benefits, including paid sick days. Both the employer and employee are barely making ends meet at that end of the economy,” says Sarno.

“Maybe some small employers care about morale, maybe some don’t. At the end of the day, higher skilled employees will be offered the benefit,” he says.