671234-b61c56f2-801e-11e4-9363-aba3d5afaa70

Whether government should mandate that employers provide paid sick leave to their employees is at the heart of the debate over the Maryland Healthy Working Families Act. The legislation is currently under consideration in both chambers of the General Assembly. Proponents of the bill argue that employers and employees benefit economically from the measure, and that the act promises potentially reduced health care costs by helping limit the spread of illnesses. Opponents counter that whatever the economic benefits for an employer, the decision to take advantage a potential benefit should be left up to the employer rather than mandated by the state. They argue that the employer is in a better position to determine the net effects of a paid sick leave policy on the broader expenditures of her business.

The Act, sponsored by Democratic Majority Leader Sen. Catherine Pugh (D-Baltimore City) in the Senate and by Del. Luke Clippinger (D-Baltimore City) in the House, would require all employers with 10 employees or more to provide paid sick leave to their workers, who would earn one hour of leave for every 30 hours worked, up to 56 hours (the equivalent of seven eight-hour days) in one year. Employers with nine or fewer employees would have to provide similarly accrued but unpaid sick leave.

“We believe that, in terms of the benefit to business and to employers, we expect there actually would be a positive benefit for employers of $132 million,” said Ben Orr, executive director of the Maryland Center on Economic Policy, a nonpartisan nonprofit specializing in research and analysis of policy proposals and a member of the advocacy coalition working towards passage of the act. “That’s largely due to savings from reduced turnover and increased productivity. Healthier employees make happier employees make more productive employees, and you don’t spread illness throughout the workplace – it’s more contained – so fewer employees have to take sick time off or are working sick.”

Orr said the measure, by putting more money in worker’s pockets, could positively impact Maryland’s economy. He compared the measure to the Supplemental Nutrition Assistance Program, a program research shows generates $9 in economic activity for every $5 spent in benefits.

Like food stamps, the Healthy Working Families Act largely benefits workers at the lower end of the income spectrum, according to Melissa Broome, senior policy advocate with the Job Opportunities Task Force. “Not surprisingly it usually is the workers who can least afford a day without pay who are the most likely to not have paid sick days,” said Broome. “Across the board 40 percent of workers in Maryland do not have paid sick leave, and that works out to over 700,000 Marylanders. But when you drill the numbers down and you look at the lowest wage workers, it’s 80 percent of them.”

The Maryland Chamber of Commerce opposes the Healthy Working Families Act. According to Deriece Pate Bennett, vice president of government affairs for the Chamber, concerns range from a private right of action against employers to the fact that employers are not allowed to verify employee claims of sickness, to a concern that increased business costs and liabilities cause companies to leave the state.

Ultimately, Bennett said, the Chamber’s opposition is less about paid sick leave and more of a philosophical difference about the role of government in business. “The Chamber believes that employers should certainly have the flexibility to address their workforce needs without the state intervening,” said Pate Bennett. “Employers don’t want their employees to be sick, we’re not bad guys, we don’t want people to come in sick when they really are sick, but we believe that there needs to be a flexibility because no work place are the same.”

Implied in Bennett’s concerns about employees who “really are sick,” is the idea that workers might abuse paid sick leave, using the accrued time in ways other than its intended purpose. This is a position, Broome argues, which available data contradicts.

“We have good evidence from other places that have implemented this type of law that . . . in the vast majority of instances, even in places where workers can earn seven paid sick days a year, the average that they take is usually around 2.4 days,” said Broome.

The Chamber and advocates for the bill also differ on the overall costs of implementing paid sick leave. Advocates cite research by the Institute for Women’s Policy Research (IWPR) finding that paid sick leave imposes a cost of $0.21 per hour on employers, while giving them a benefit of $0.24 per hour from reduced turnover. The Chamber estimates implementation costs at $0.34 per hour, and Bennett argues there is no evidence implementing a law like this would actually reduce turnover.

Dr. Jessica Milli, senior research associate with IWPR, notes there is research showing that paid sick leave reduces turnover, citing two studies, one from 1993 and the other from 2012. Both studies indicate an approximately 5 percent reduction in turnover for employees with paid sick leave.

For Ellen Valentino, executive vice president of the Mid-Atlantic Petroleum Distributors Association Inc. (MAPDA), an association of convenience stores and energy distributors, the Act is well intentioned, but its one size fits all approach strips employers of too much flexibility. She said it fails to take into account that employers may be already providing other types of benefits that negate the necessity of paid sick leave, or that at least need to be considered when thinking about imposing costs on businesses to extend additional mandated benefits (as would be imposed by the Act).

Ultimately, as with the Chamber, MAPDA’s concern has more to do with the mandate than paid sick leave itself. “I think it would be fair to say that the opposition to the bill is the government mandate and the one size fits all policy that just clearly doesn’t meet the needs of the work place. I think the government’s stepping into a space where employers and employees generally negotiate what their salary is, what their leave is, that type of thing,” said Valentino.

Jessica Cooper, state director for the National Federation of Independent Business (NFIB) Maryland, a small-business advocacy organization whose position on issues is determined through direct polling of members, says her organization’s members had “overwhelming strong concern” about government mandated paid sick leave, and noted that the decision to offer paid sick leave is better left to employers operating within the context of market forces. “Those who already offer paid leave, or a version of paid leave, were saying that they do so to separate themselves from the competition, and creating a cookie-cutter benefit means that they’ll have to try to find enough money to try to find another benefit to separate them from the rest,” said Cooper.

Cooper also notes that many small businesses work with their employees to address sick time off, a flexibility she argues should be preserved since many small businesses operate within limited resources, making providing paid sick time off a challenge, and a decision better left to employers responding to conditions in the labor market.

Broome, however, cites survey data showing that one in five women report being disciplined or fired (or knowledge of it happening to a family member) for taking time off for an illness or to care for a loved one. This suggests the market alone may not be sufficient to address the vulnerability of employees without sick leave.

“At the end of the day, we need public policies that reflect the realities of today’s working families . . . and no one should risk job loss or financial devastation because of something as simple as coming down with the flu,” said Broome.

ralejandro@afro.com