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Paid Sick Leave

Policies Becoming
Mandatory for Some

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With cold and flu season kicking in, it's likely

that many of your employees will be hit with
one of these illnesses though they might
not call in sick. While many employers offer
some form of paid sick leave, an estimated
43 million American workers lack any time
off with pay during illness, according to the
White House.
This article answers a variety of paid sick
leave questions, including:

What is the federal government doing in this area?

Which states and cities now require it?

How does this employee benefit affect employers?

What kind of paid sick leave are others in your industry offering?

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The Federal Push for Paid Sick Leave

On Labor Day this year, President Obama signed an executive order requiring
companies that do business with the federal government to adopt policies
offering their employees up to seven days of paid sick leave per year,
beginning in 2016. Those federal government contractor employees
roughly 300,000 of them will earn a minimum of one hour of paid sick leave
for every 30 hours they work.

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The leave mandated by the executive order can be used for the employee to
take care of him- or herself or a family member, domestic partner or "other
loved one." It can also be taken "for absences resulting from domestic
violence, sexual assault, or stalking," according to a White House summary.
When announcing the new policy, the President urged Congress to enact longpending legislation mandating paid sick leave, the Healthy Families Act.
That proposal, which has been rejected by Congress several times, would
require employers with at least 15 employees to provide essentially the same
sick leave benefits that will soon be required of federal contractors.

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State Mandates
Given the pattern in Congress of rejecting that proposal, President Obama
also urged states and local governments to enact such legislation. Several
states have already done so, including California, Connecticut, Hawaii,
Massachusetts, New Jersey, Oregon and Rhode Island. The California and
Massachusetts laws took effect last July.
Cities with similar laws [AB1] include Eugene, Ore.; New York; Newark, N.J.;
Oakland, Calif.; Philadelphia; Portland, Ore. ; San Francisco; Seattle; Tacoma,
Wash.; and Washington, D.C..
Campaigns promoting mandated paid sick leave are underway in dozens of
other jurisdictions.

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How Paid Sick Leave May Affect Employers

The Freedom Foundation, a not-for-profit policy research organization,
conducted an analysis of several studies and combined the results. The
organization deemed the research used to be "the most significant and
frequently cited studies of mandatory paid sick leave policies," focusing on
jurisdictions that had adopted sick-leave laws. The conclusion: The benefits of
such polices were overstated.
One of the most common arguments favoring paid sick leave is that, without
it, sick employees who can't afford to forfeit a day's pay will come to work
with contagious illnesses and pass them on to other employees. Another is
that, in the absence of paid sick leave, the rate of "presenteeism" will rise.
Presenteeism is when employees are physically present at work but operating
at a reduced level of productivity. However, the Freedom Foundation
concluded that "workers come to work sick just as often without a mandatory
paid sick leave policy as they do with one."

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Industry Practice
Even so, whether a paid sick leave policy makes sense for your business
depends on your human resource philosophy, as well as your industry and the
practices and labor market dynamics where you operate. The U.S. Bureau of
Labor Statistics (BLS) studied how common various private sector sick leave
policies are. According to the BLS study, "Paid Sick Leave: Prevalence,
Provision, and Usage among Full-Time Workers in Private Industry,"
nearly 75% [AB2] of employers offer paid sick leave. Of those employers
offering paid sick leave:

68% use sick leave plans that provide a fixed number of paid leave days
per year are most common,

22% use "consolidated leave" plans, combining sick leave and vacation
days as "paid time off," and

Only 10% have an open-ended "as needed" sick leave policy.

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The study also found that the calculation of sick leave days unlike vacation
days is not significantly affected by employee seniority. For employees with
up to five years of service the average number of paid sick days was eight,
while the average for employees with up to 20 years of service was only
increased by one.
As the table below indicates, the number of paid sick days granted varies by
industry.
The column "any years of service" refers to companies that grant paid sick
leave from Day 1, as well as those that require employees to wait a year or
more before they receive this leave.

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Days of Annual Paid Sick

Leave
Industry

Any years
of service

1 year
of service

10 years
of service

Construction

Education & Health Services

10

Financial Services

Information

10

Leisure & Hospitality

Manufacturing

10

Professional Business
Services

Trade, Transportation,
Utilities

Table, Average number of paid sick days granted, by industry group

Source: Bureau of Labor Statistics
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What Should You Do Now?

As with any rules governing employee behavior, a paid sick leave policy
requires thoughtful design and oversight. If you don't already offer it and are
interested in adding this benefit or you'll be required to provide it by
legislative changes it may be helpful to look at what others in your industry
are doing. Consult your employment adviser for guidance as you consider a
policy that's right for your business.

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