Paid sick leave may be incentive, complication at small businesses
He wanted to avoid the headache of calculating how much sick time staffers at his digital marketing company earned for the time they worked, and there was the question of what to do about his employees in Cincinnati.
Holmes had previously given his staffers three weeks of paid time off, to be used for whatever they wanted. But with the law requiring sick leave, he added a week of sick time for all 14 staffers. It increases his costs, but he wants to retain employees and attract new ones.
“We’re in a fairly competitive market for people, and that was the deciding factor,” says Holmes, co-owner of Chicago Style SEO.
Running a small business can be more expensive and complex for owners subject to the growing number of state and local laws that mandate paid sick time. Owners with far-flung staffers like Holmes must decide how much sick leave to give all their workers. They also have the administrative costs of complying with the laws. And, if they have staffers who do shift work, they often must pay substitutes when someone is sick.
Despite those complications, the trend in the U.S. is toward more companies offering paid sick leave, either because of the laws in 10 states and many big cities or because employers recognize it’s a benefit staffers want. The Labor Department estimated last year that 68 percent of workers at U.S. companies had paid sick leave, up from 61 percent in 2015.
The issue of paid sick leave has been raised in Congress, although a federal law doesn’t appear likely in the near future. At a Senate hearing in July, lawmakers split along party lines over how to pay for the time off. Democrats favor a law that would be funded through tax increases on employers and workers. Republicans want workers to effectively pay for sick leave by delaying eligibility for Social Security based on how much sick time they’ve taken.
Separately, a GOP-sponsored bill in the House would allow companies to be exempt from state and local sick leave laws if they offer staffers flexible scheduling.
Most of the state and local laws, which allow workers to accrue sick leave based on the number of hours they work, are in traditionally Democratic areas. The states are Arizona, California, Connecticut, Maryland, Massachusetts, New Jersey, Oregon, Rhode Island, Vermont and Washington. Cities with laws include Chicago, Los Angeles, Minneapolis, New York, Philadelphia, Pittsburgh, Seattle and Washington, D.C.
While paid sick leave is becoming more prevalent, some owners balk at the laws, says Tim Garrett, an employment attorney with Bass Berry Sims in Nashville, Tennessee.
“They don’t appreciate the government telling them what to do,” Garrett says. “They say, ‘I want to do this because it’s what’s best for my business.’”
It can be complicated to comply with the laws, which can affect companies located outside a state’s or city’s borders. Some require sick leave to be granted to workers who are temporarily within a jurisdiction, including employees on business trips or truck drivers making deliveries.
Dan Turner steers clear of places with laws more complex than what’s required in Washington, D.C., where his information technology firm, TCG, is located. When employees move away, some want to become remote staffers. That’s fine by Turner as long as they don’t move to a place where more stringent requirements can make him anxious about complying.
“I need to sleep well at night following the laws,” says Turner, who has about 150 staffers.
New York City’s paid sick leave law has made scheduling more complicated at On Location Tours, which takes people to places made famous in movies and TV shows.
Owner Georgette Blau schedules 30 guides, many of whom are actors, around their auditions and performances - so finding a substitute can be challenging. She’s even canceled tours when she couldn’t find someone.
Blau had already paid a payroll company $15,000 to implement systems to track and report work hours and sick time taken to the city, a big amount for a small business. She continues to pay for the service, and pays ill staffers and their replacements.
While the laws can be frustrating for some owners, they do have pluses, says Michael Timmes, a consultant with human resources provider Insperity.
Sick staffers will be more likely to stay home, and not come into work and infect everyone else. Paid sick time also lowers the chance that someone with a fever who feels weak could fall or be injured by items at work.
Paid sick leave also gives owners a chance to give their staffers a positive message, that the company cares about them, Timmes says. He suggests owners tell employees, “This is a great benefit that you have and we hope you use it when you need it.”