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Hidden problems of Paid Sick Law

July 28, 2014

healthycommunitiesinitiativeDennis Morgan, Volunteer Executive Director
Healthy Communities Initiative (HCI)

Employers of all sizes understand that employees need time off to address personal or family health issues, which is why the vast majority of employers voluntarily offer generous paid leave benefits. According to the U.S. Bureau of Labor Statistics, 83 percent of private sector employees have access to paid illness leave. At the same time, employers face economic realities and must balance leave benefits with other compensation offered to employees, such as wages and health benefits.

The Eugene Mandatory Sick Leave ordinance (EMSL) would mandate that all employers regardless of the number of employees provide a one-size-fits-all paid sick time mandate of up to 40 hours of paid sick time annually. A paid sick time mandate would limit an employer’s flexibility in designing a compensation and benefits package that meets the needs of their unique workforce, resulting in significant costs for employers as well as a potential loss to employees who prefer other benefits rather than paid sick time. Moreover, the EMSL seems to incorporate some of the Family and Medical Leave Act (FMLA) concepts that have caused the most significant problems for employers with respect to scheduling, including the ability to use this paid sick leave on an unscheduled basis, with little or no notice of an absence.

Increased costs and reduced flexibility are serious concerns for employers, but legislation such as the EMSL also raises other implementation concerns as outlined below.

Impact on Small Employers: This legislation represents an unprecedented expansion of employment mandates on small employers, applying to those with as few as 1 employee.

Eligibility: Under the EMSL, all employees would immediately begin earning paid sick time, including those working less than 20 hours per week and could begin taking the leave after 90 days. In contrast, the FMLA requires that an employee work for an employer for 12 months and 1,250 hours (an average of over 24 hours per week) to be eligible for leave.
Employer Mandate: The EMSL’s one-size-fits-all approach would force employers to reduce wages or other benefits to pay for the leave mandate and associated compliance costs, thereby limiting benefit and compensation options. The EMSL threatens an employer’s ability to provide the benefits that best fit the needs of their workforce and their budget.
Intermittent Leave: It appears the EMSL may allow employees to use paid sick time on an intermittent basis in fractions of an hour, without notifying the employer. Experience with this provision under the FMLA has shown that allowing employees to take leave on an intermittent basis, without prior notice or documentation (e.g., doctor’s note), invites unscheduled absences, tardiness and misuse of leave. FMLA leave was intentionally kept unpaid to discourage employees from using it inappropriately. Providing a paid leave benefit under the same structure as the FMLA will encourage employees to use this leave in ways not intended, further frustrating employers in their need to have a reliable and predictable workforce. When employees take intermittent leave with little or no notice, employers must cover the absent employee’s workload by reallocating the work to other employees or the work goes undone.

Impact on the Public: Under the EMSL, an employer’s workforce could fail to show up for work without advance notice, resulting in significant workplace disruptions and a negative impact on productivity and customer service. Comments from the transportation, emergency service providers, hospitals, schools, and daycare centers during the FMLA rulemaking make clear that these employers have had recurring problems with employees taking unscheduled leave under the unpaid FMLA. The EMSL’s leave provisions could be particularly devastating.

Coordination: The EMSL adds to the growing patchwork of varying federal, state and local leave requirements. Employers consistently report challenges in navigating the various conflicting requirements of overlapping state and federal leave and disability laws, including the FMLA, the Americans with Disabilities Act, and workers’ compensation laws. The EMSL would only add to the already complex web of inconsistent but overlapping leave obligations under federal and state laws.

This “one-size-fits-all” approach may actually cause more harm than good. Employers, not the Eugene City Council, are best situated to know the benefit and compensation needs of their employees. Healthy Communities Initiative believes that paid leave programs offered voluntarily by employers more readily assist employees in accommodating work/life demands than “one-size-fits-all” mandates. Eugene City Council should create incentives, i.e. property tax relief, not mandates, to encourage businesses to create sick leave or paid time off policies that meet Eugene’s desires.

  
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