HHS Item 2
June 11, 2015
Worksession
MEMORANDUM
June 9, 2015
TO:
FROM:
Health and Human Services Committee
Robert H. Drummer, Senior Legislative Attorney
Jacob Sesker, Senior Legislative Analyst
~
r
A\J
l)Q
Earned Sick and
SUBJECT:
Worksession:
Bill 60-14, Human Rights and Civil Liberties
Safe Leave
Bill 60-14, Human Rights and Civil Liberties - Earned Sick and Safe Leave, sponsored by
then-Council Vice President Leventhal and Councilmembers Navarro, Branson and EIrich, was
introduced on November 25, 2014. A public hearing was held on January 29.
Background
FMLA and MFLA
Congress enacted the Family and Medical Leave Act (FMLA) in 1993. The FMLA
requires an employer with 50 or more employees to provide 12 work weeks of unpaid leave in a
12-month rolling period.
An
employee must have worked at least 1250 hours during the preceding
12-month period to be eligible for unpaid leave under the FMLA. One of the reasons an employee
may take unpaid FMLA leave is for the employee's "serious health condition" or to take care of
an immediate family member with a "serious health condition."
An
employee must be unable to
perform anyone of the essential functions of the employee's position in order to use FMLA leave
for a serious health condition. The U.S. Department of Labor FMLA Fact Sheet is at ©14-17.
In 2008, Maryland enacted the Flexible Leave Act (MFLA), codified at Labor
&
Employment Art. §3-802. This law requires an employer who has 15 or more employees to permit
an employee to use paid leave earned by the employee under an employer's paid leave benefit for
the illness of an immediate family member.
Both the FMLA and the MFLA were designed to permit an employee to miss work due to
the employee's illness or the illness of an immediate family member without risking the loss of
employment. However, both of these laws leave several large holes in employee protection. The
FMLA does not apply to an employer with fewer than 50 employees, does not protect an employee
who has not worked at least 1250 hours in the preceding 12 months, and requires an employee to
have a "serious health condition." The FMLA does not require the employer to pay the employee
for time missed under the FMLA. The MFLA does not mandate any leave. It requires an employer
to permit an employee to use paid leave already provided by the employer for the illness of an
immediate family member.
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Local Paid Sick Leave laws
The District of Columbia enacted the Accrued Sick and Safe Leave Act of 2008, amended
by the Earned Sick and Safe Leave Amendment Act of2013. The mandatory employer poster for
this law is at ©18. Under the DC law:
(1 )
an employer with 100 or more employees must provide 1 hour of leave per 37 hours
worked;
(2)
an employer with 25-99 employees must provide 1 hour of leave per 43 hours
worked; and
(3)
an employer with less than 25 employees must provide 1 hour per 87 hours worked.
The DC law is enforced by the District of Columbia Department of Employment Services, Office
of Wage and Hour.
In 2006, San Francisco enacted a Paid Sick Leave Ordinance (PSLO) pursuant to a voter
referendum. The PSLO requires an employer with fewer than 10 employees to provide 5 days or
40 hours of paid sick leave. An employer with 10 or more employees must provide 9 days or 72
hours of paid sick leave. Leave must be earned at the rate of 1 hour for every 30 hours worked
after an initial probation period of90 days. The PSLO covers full-time, part-time, and temporary
workers. In 2009, the Urban Institute published a study reviewing the effect of the PSLO on
employers in San Francisco,
Employers) Perspectives on San Francisco's Paid Sick Leave Policy,
Boots, Martinson, and Danziger. See ©19-37.
Legislation to mandate earned sick leave was introduced in the Maryland General
Assembly in 2014 and 2015, but was not enacted. The Fiscal Note for HB 385 at ©38-51 includes
a summary of State-wide paid sick leave laws in California, Connecticut, and Massachusetts.
Labor market imperfections and government interventions
The market for labor matches employers' demand for labor, derived from the demand for
the product or service offered by the employer, with the supply ofsuitable workers. Firms choose
to pay for an additional unit of labor when the additional output ofthat unit of labor can be justified
by the cost of the labor. The labor supply enters into the labor market when the compensation
exceeds the value (opportunity cost) that the worker places on their time. Supply and demand of
labor are both affected by prices-for example, the high cost of labor may discourage firms from
hiring additional workers, but the high cost of labor may also encourage more individuals to
participate in the market for labor.
The compensation offered to employees may be limited to wages, but many employers
offer and many employees (individually or collectively) negotiate for other non-wage
compensation or benefits. Ifthe market for labor functioned perfectly, all of the actors in the labor
market would behave rationally, have accurate information to use in setting a price for labor, and
the costs and benefits of the employer-employee relationship would be internalized in the price
(i.e. wage plus non-wage) of labor.
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Of course, the labor market like other markets is not perfect. Imperfections in the labor
market that might justify government intervention include the following:
• Some actors in the labor market behave irrationally. Individuals in the labor market
may undervalue paid sick leave or underestimate the odds that they will need to take paid
sick leave. Similarly, firms may choose not to offer paid sick leave because they
undervalue the self-imposed quarantine ofsick employees or underestimate how frequently
their employees experience illness.
• Some actors in the labor market do not have accurate or complete information.
Individuals in the labor supply may not know which employers are hiring, let alone have
information about the wages and non-wage compensationibenefits offered by those
employers. At the same time, firms that hire workers do not know how likely those workers
are to use paid sick leave (or any other employment benefit).
It
is possible that employees
who are likely to use a lot of paid sick time will take the time to identify employers that
offer paid sick leave.
• Some benefits and costs associated with the labor are not internalized. Most of the
benefits associated with preventing or minimizing the spread of contagious disease accrue
to society at large and not just to the employer. Some of the costs of contagious disease
already accrue to society rather than just the employer.
Types of government interventions
Government intervention in the labor market could theoretically address each of the labor
market imperfections identified above. Generally speaking, those interventions tend to fall into
the following categories:
• Taxing and spending: A strength of any "taxing and spending" response to labor market
imperfections is that the benefits are spread broadly across society. The weaknesses of
taxing and spending include that
it
is an awkward and inefficient way to pay for
personal/individual benefits, and that frequently the intended beneficiaries (who often are
unable to bear any additional financial strain) end up bearing some portion of the cost of
the tax.
• Employer mandates: A strength of an employer mandate is that the total cost of
implementing the program is often reduced because some employers are able to achieve
compliance with no change or small tweaks to their current practices. A weakness of an
employer mandate is if the employer's cost is disproportionate to the benefits that accrue
to the employer, then employers may be bearing what would otherwise be a societal cost.
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Employer mandates and the social safety net
The social safety net in this country relies on a mix of government spending, government
subsidies and government-mandated programs (employer and individual mandates). Relying on
government mandates for a portion of the social safety net has allowed this country to impose
generally lower tax burdens than those imposed by comparably wealthy democracies. However,
that reliance has not reduced the cost of social welfare programs, but simply has redistributed a
portion of those costs through other economic channels.
As a result of employer mandates, many employed individuals in this system enjoy access to
very good health and social welfare coverage, while other individuals (especially those who are
either unattached or less attached to an employer) frequently lack access to benefits such as paid
sick or parental leave. If, as expected, the nature of work continues to move away from the
exclusive employer-employee relationship that became the norm in the 20
th
century, the social
safety net programs that mandate employer-provided benefits will reach an ever-shrinking portion
of the labor force.
Bill 60-14
Bill 60-14 would require an employer operating and doing business in the County to
provide earned sick and safe leave to each employee for work performed in the County. Earned
sick and safe leave is paid leave away from work that can be used for the injury or illness of the
employee or the employee's immediate family or due to domestic violence suffered by the
employee or a member of the employee's immediate family. An employer could provide paid
time offthat can be used by the employee for any purpose to satisfy the earned sick and safe leave
requirement of the Bill.
Bill 60-14 would require an employer to provide earned sick and safe leave at a rate of at
least 1 hour for every 30 hours an employee works in the County up to 56 hours in a calendar year.
An employee would have to be paid for earned sick and safe leave at the same rate and with the
same benefits as the employee normally earns. A tipped employee would have to be paid at least
the County minimum wage for each hour the employee uses earned sick and safe leave.
Public Hearing
Nineteen of the 28 speakers at the January 29 public hearing supported the Bill. The other
9 speakers opposed the Bill. Representatives of the County Commission on Aging (©60) and the
County Commission for Women (©61-63) supported the Bill as a much needed benefit for low
wage workers in the County. The Job Opportunities Task Force (©64-67), the Public Justice
Center (©68-70), Montgomery County Young Democrats (©71-72), Jews United for Justice
(©73), SEIU Local 32BJ (©74-75), UFCW Union Local 400 (©76), MomsRising.org (©77),
Business and Professional Women of Maryland (©78-79), and National Nurses United (©80-81),
each had a representative testify in support of the Bill.
Representatives from the Greater Silver Spring Chamber of Commerce (©82-89), the
Gaithersburg/Germantown Chamber of Commerce (©90-91), The Greater Bethesda-Chevy Chase
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Chamber of Commerce (©92-93), the Montgomery County Chamber of Commerce (©94-95), the
Community Services for Autistic Adults and Children (©96-97), the Maryland Motor Truck
Association (©98), the Mid-Atlantic Petroleum Distributors, the Restaurant Association of
Maryland (©99-100), and ConTemporaries, Inc. (©101-104) each opposed the Bill as an
additional burden on small County businesses. Several of the business groups urged the Council
not to enact a paid sick leave law for the County because competitors located in the rest of
Maryland would not have to provide this benefit.
Wendy Chun-Hoon, Andy Kirschner (©105), Rabbi Charles Arian (©106), Fran Rothstein
(©107-108), Laura Wallace (©109), and Marcellina Flores (©11O-111) supported the Bill as
individuals. Two small business owners in the County, Mimi Hassanein (©112) and Gabriela
Miller also supported the Bill. Rachel Metz (©113) and Equality Maryland (©114) sent in written
testimony supporting the Bill. Century Distributers, Inc. (©115-116), the Maryland Retailers
Association (©117), the Sheet Metal and Air Conditioning Contractors' Mid-Atlantic Chapter
(©118-120), and The Arc Montgomery County (©121) sent in written testimony opposing the
Bill.
Many of the individuals and community groups supported mandatory paid sick leave as an
important benefit that would permit low wage workers to stay home without losing payor their
job. Small businesses and chambers of commerce generally opposed the Bill, with special
emphasis on the application of the Bill to very small employers and part-time workers with a
flexible schedule. Finally, several County non-profit human services providers opposed the Bill
because it would raise their cost of providing these services to the community.
Discussion
1. What is the fiscal and economic impact of the Bill?
OMB estimated a cost to implement the Bill at between $628,946 and $636,701 in FY16.
1
See ©52-59. Most of these costs would continue each year. The Bill would have a fiscal impact
for both increased benefits for some County employees and cost to administer and enforce the new
law. Although regular County employees accrue sick leave at a rate greater than required by the
Bill, County employees are not currently eligible to use sick leave for some of the categories of
safe leave. In addition, temporary and seasonal County employees would start earning paid sick
leave at the rate required in the Bill. OMB estimated a need to add up to 18.6 new FTEs to cover
the work not performed by employees taking advantage ofthe new paid sick and safe leave benefit.
In addition, OMB estimated that the Office of Human Resources would need one additional
position at either Grade 23 or Grade 25 to administer this new benefit.
OMB also estimated that changes to the MCTime and ERP systems to accommodate the
new benefit would cost an additional $165,906 in FY16. The Office of Human Rights would be
responsible for enforcement. OMB estimated that no extra staff would be necessary to handle
complaints and violations. However, this could change quickly if the number of complaints is
The estimated fiscal impact did not assume creation ofa new Montgomery County Department of Labor Regulation.
However, it is possible that continued local regulation oflabor will create a need for a cabinet-level department capable
of enforcing local labor regulation.
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greater than expected. Without additional staff, the time for investigating and resolving all
complaints by the Office of Human Rights is likely to increase.
2
Finance was unable to find survey data on how many employees working in the County do
not have paid sick leave. However, using national data and looking at both size of businesses and
industry sectors in the County, Finance estimated that between 89,217 and 91,051 employees are
working in the County without paid sick leave. Assuming that each employee earns the County
minimum wage of $8.40 per hour and uses the maximum of 56 hours of paid leave each year,
Finance estimated the cost to County businesses would be between $41.95 million and $42.82
million per year.
3
These costs could have a positive economic impact on low wage workers and a
negative impact on County business income. To the extent businesses are able to pass these
increased costs on to customers, the Bill could have a negative economic impact on the County.
2. What portion
of workers
have paid sick leave?
The U.S. Bureau of Labor Statistics reported, in 2014, that 61% of workers in private­
industry businesses have paid sick leave, while 89% of workers in state and local. governments
have paid sick leave.
4
Private-industry businesses with fewer than 100 workers provide 52% of
workers with paid sick leave; in contrast, private employers with more than 100 employees provide
72% of employees with paid sick leave. Private industry provides 74% of full time workers with
paid sick leave, whereas only 24% of part time workers receive the benefit. Nonunion employees
are less likely to have paid sick leave than union employees. Low wage workers are much less
likely than high wage workers to benefit from paid leave. See
National Compensation Survey,
March 2014
at
©
122-127.
3. What are the expected benefits of a paid sick leave law?
The absence of paid sick leave inevitably forces part-time and low wage employees to
choose between working sick, and thereby spreading contagious diseases, or losing much needed
pay.
5
An employee who comes to work with a contagious illness increases the risk of spreading
the disease to fellow workers, customers, and the general public. A part-time or low wage
employee who has significant contact with the public or the food supply and who chooses to work
while sick can contribute to the spread of contagious disease.
A paid sick leave law will increase the number of workers with paid sick leave. The effect
of a paid sick leave law depends upon both the coverage of the bill and also the compliance by
employers. The DC Auditor's 2013 review ofthe Accrued Sick and Safe Leave Act of2008 found
Without adding more investigators to the Office of Human Rights, enforcement is likely to be sporadic and
ineffective.
3
Finance assumed that all of the cost to provide paid sick leave accrues to the employer. However, it is likely that
some employers already have a paid vacation or paid time off benefit that could be converted to paid sick leave to
comply with the Bill at little or no cost.
4
Workers in private industry are much more likely to have paid vacation time (77%) and paid holidays (76%) than
paid sick leave (61%).
5
According to the White House Council of Economic Advisors
(The Economics ofPaid and Unpaid Leave, 2014),
23% of workers took paid or unpaid leave during a typical week. An additional 4.1 % ofworkers reported they wanted
to take leave but could not do so. The most common reasons reported for not being able to take leave included "too
much work" (26%) and "could not afford loss in income" (19%) and "feared losing job" (12%).
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that of surveyed employers, the percentage of employers providing paid sick leave only increased
from 50% in 2007 to 68% in 2012.
A review of Seattle's paid sick leave ordinance indicates that overall, the percentage of
employers providing paid sick leave increased from 67% in 2012 to 76% in 2013, though coverage
by employers in the food and accommodation sector increased from 14% providing the benefit
when the requirement was imposed to 78% providing the benefit one year later. Overall, about
61 % of surveyed employers in Seattle offer leave as required one year after the law went into
effect.
Implementation and Early Outcomes ofthe City ofSeattle Paid Sick Time Ordinance.
See
Executive Summary at ©128.
4. What is the cost to an employer or providing paid leave?
Nationally, the average total cost of compensation for workers in private industry is $31.32
per hour. Bureau of Labor Statistics National Compensation Survey (December, 2014). Of that
amount, $21.72 is wage and salary compensation, and $2.16 is paid leave (sick leave, vacation
leave, holiday leave, and personal leave). Ofthe $2.16, paid sick leave is $0.26 compared to $1.13
for paid vacation leave. Since both paid sick leave and paid vacation leave are generally tied to
wages, this difference probably indicates that many more employers offer paid vacation time than
paid sick time, and may also reflect that among employers that offer both benefits, it is common
to offer more paid vacation leave than paid sick leave.
The employer cost of paid leave (sick leave, vacation leave, holiday leave, personal leave)
is related to the wage and salary compensation for the employer's employees. Occupations or
industries with higher wages or salaries are associated with higher employer costs of paid leave.
According to the Bureau of Labor Statistics (BLS), private industry paid leave benefit costs were
highest in management and professional occupations, with an average hourly cost of $4.67 per
hour worked (8.4% oftotal compensation). In contrast, the employer cost of paid leave for service
occupations was only $0.56 per hour worked, or 3.9% of total compensation. Similarly, the
employer costs ranged from a high of$4.82 per hour worked in the information industry (8.7% of
total compensation), to a low of $0.41 per hour worked in leisure and hospitality (3.1 % of total
compensation).
Private industry employees in bargaining units not only have higher wage and salary
compensation, but also have benefits that comprise a significantly larger share of total
compensation costs (40.3% oftotal compensation for union employees, versus 29.2% for nonunion
employees). However, that cost difference is mostly attributable to retirement and insurance. The
cost associated with paid leave (per hour ofwork) in private industry is $3.25 for union labor (7.0%
of total compensation) as compared to $2.05 for nonunion labor (6.9% of total compensation).
Establishment size is also a factor. In private industry establishments with 49 or fewer
employees, paid leave costs $1.43 per hour worked (of which $0.16 is the cost of paid sick leave),
whereas in private industry establishments with more
than
500 employees paid leave costs $3.87
per hour worked ($0.52 of which reflects the cost of paid sick leave).
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5. How have employers responded to sick leave mandates in other jurisdictions?
Some employers may seek to cover any costs associated with paid sick leave by increasing
consumer prices or reducing the cost ofnon-labor inputs, while other employers may seek to cover
the costs of paid sick leave by reducing labor costs (e.g. by reducing the size or frequency of wage
increases or by reducing other employment benefits).
The Urban Institute's study Employers' Perspectives on San Francisco's Paid Sick Leave
Ordinance (see ©19-37) represents the most informative study to date of a local paid sick leave
ordinance. Among the relevant findings are the following:
• Generally speaking, the employer experience in San Francisco indicated that the cost of
the requirement was relatively small in comparison to other labor-related mandates (such
as the increase in the minimum wage). Reasons for the minimal impact included having
few affected employees or adjusting only slightly the total number ofpaid days off (through
substituting sick days for vacation days or making relatively minor adjustments to accrual
rates).
• About half of the employers interviewed tried to offset or minimize their increased labor
costs-for example, canceling or delaying planned wage increases, eliminating end of year
payout for unused vacation time, reducing paid vacation time or reducing bonuses.
• Small and medium sized employers were more affected by the mandate than larger
employers, and also reported more difficulty administering the law (because, for example,
they were less likely to have sophisticated payroll systems). Larger employers were better
able to absorb the cost and track or administer the mandated benefit.
• In terms of offsetting benefits, few employers reported any early benefits from reduced
absenteeism, lower turnover, or improved employee morale as a result of the paid sick
leave ordinance.
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Seattle employers surveyed reported modest but non-negligible impacts on their
businesses. "Most believed the Ordinance had little to no effect on customer service, employee
relations, or profitability. A minority (17%) thought the Ordinance made them less profitable."
6. How would .the paid sick leave law affect small businesses?
The public hearing testimony from the Chambers of Commerce focused on the problems
the Bill would cause small businesses with employees working in the County. Large businesses
are more likely to have leave policies that comply with the Bill and, more importantly, a central
personnel system that is already established to track leave earned and used. A small business that
does not have an electronic tracking system for time sheets and leave would have to set up a system
to comply with the Bill. Although we do not have any statistics showing the number of businesses
of different sizes that do not have paid leave policies already, it is logical to assume that smaller
businesses are less likely to provide paid leave for their employees. To the extent that this
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When aU or most employers are required to provide paid sick leave, then paid sick leave ceases to be a factor
affecting employee turnover/loyalty.
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assumption is true, the Bill would have an adverse effect on the competitive costs incurred by a
small business compared to a large business that already complies with the Bill.
7. How would the paid sick leave law affect restaurauts?
The Restaurant Association of Maryland testified (©99-100) that the restaurant industry
has developed a system of using part-time employees with a flexible schedule. If an employee
needs to take a sick day, the employee is often scheduled to work another day as a substitute. Since
most restaurant jobs are coverage jobs where an absent employee must be replaced on the shift, a
restaurant would be forced to pay for two people to cover one shift if one employee calls in sick.
This differs from many office jobs where an absent employee simply makes up the work when the
employee returns to work. The Bill would require a restaurant to pay a tipped employee the full
County minimum wage for hours missed while on sick or safe leave. This would, essentially,
require the employer to pay the employee for tips not received by the employee or the employer
when the employee is on sick or safe leave. However, a tipped employee who regularly earns
significantly more than the County minimum wage in tips may prefer to be rescheduled for a
different shift rather than be paid the County minimum wage.
One of the underlying reasons for the Bill is concern that a food service worker would be
forced to come to work sick and thereby spread disease because the employer does not provide
sick leave. The Restaurant Association pointed out that COMAR already prohibits a food service
handler from working with food while sick. See COMAR §lO.l5.03.l4.
8. How would the paid sick leave law affect the construction industry?
The Sheet Metal and Air Conditioning Contractors' Mid-Atlantic Chapter (©118-120)
opposed the application ofthe Bill to their industry. They argued that the one-size-fits-all approach
in the Bill does not fit the skilled construction labor market. Most work performed on large
commercial construction projects is done by small subcontractors who hire skilled labor for various
jobs in the local area. A skilled worker is often employed at different job sites in different
jurisdictions on the same day. The Chapter argued that keeping track of the hours worked in the
County by a worker assigned to different job sites throughout the day or week would be difficult
and time consuming. They pointed out that many of these workers are covered by a collective
bargaining agreement and routinely earn significantly more than the County minimum wage. Any
worker on a Federal, State, or County project would already be covered by either the Federal
Davis-Bacon Act or the State or County Prevailing Wage Law that establishes minimum wages
and benefits for each classification of skilled labor.
Ifthe Committee wants to exempt construction workers, it could be done either by industry,
or more effectively, by limiting the Bill to employees who earn a lower hourly wage.
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9.
How would the County enforce the law?
The new law would be enforced by the County Office of Human Rights (OHR). There is
no equivalent Federal or State law. Bill 60-14 would authorize a person to file a complaint with
the Office of Human Rights. The complaint would be handled in the same manner as a complaint
alleging a violation of the County employment discrimination laws. The Director has authority to
issue subpoenas and investigate the complaint. If the Director finds reasonable cause to believe a
violation occurred, the Director must try to settle the case. Ifunable to settle the case, the Director
must certify the complaint to the Human Rights Commission, which must appoint a case review
board to consider and decide the complaint. If the Director does not find reasonable cause to
believe a violation has occurred, the complainant may appeal the Director's decision to the
Commission.
An
adjudicatory hearing may be conducted by the Commission case review board
or a hearing examiner.
The Commission has the authority to award compensatory damages to the complainant,
including reasonable attorney's fees. The Commission also has the authority to order the defendant
employer to pay a civil fme to the County of up to $500 for each violation. The Commission's
final decision is subject to judicial review on the record by the Circuit Court.
OHR has made progress in recent years to reduce the time to close a case from 48 months
to 24 months. However, the Council did not add any new investigator positions for OHR in the
FY2016 operating budget. The Office currently has 4 investigators and 1 manager who performs
some investigations to handle all employment, housing, and public accommodation discrimination
claims, along with claims involving, displaced service workers, the new Fair Criminal Records
Standard law, the new Retaliation for Wage Disclosure law, and the County Minimum Wage law.
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An
investigation of a sick and safe leave claim would be complicated.
An
investigator
would have to determine if the employee worked in the County, ifthe employer properly calculated
the sick leave earned based upon the number ofhours worked in the County, and the circumstances
surrounding the employee's absence from work. If the employee was disciplined or fired, the
investigator would need to determine if the adverse employment action was due to a failure to
comply with this law or some other legitimate reason.
An
investigator might also need to
determine if the employer retaliated against the employer for exercising the employee's right to
earned sick and safe leave or for simply advocating for compliance with the law.
Proper enforcement should also include a public information campaign to inform
employers and employees of the new law and periodic surveys of employers to determine
compliance. For example, a recent survey of the Seattle law one year after it was enacted found
that 39% of the employers
who responded to the survey
still did not provide sick and safe leave
for part-time employees. See ©128. Four years after the District of Columbia law was enacted,
the District's auditor found that the District Government had not complied with the law for its own
employees and that the percentage of employers providing paid sick leave only increased from
50% in 2007 to 68% in 2012. See ©129-130.
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Minimum wage claims can be referred
to
the State Department of Labor, Licensing, and Regulation.
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10. Would the County sick and safe leave law apply in municipalities?
As with most County laws, the County sick and safe leave law would not automatically be
applicable in certain municipalities. Md. Local Gov't Code, §4-111 provides that a municipality
can exempt itself from certain types of County laws. The County Attorney's Office created a chart
that lists the Chapters of the County Code from which each municipality has exempted itself.
8
According to the most recent chart, there are 5 municipalities in which the Bill would
not
apply
unless they expressly opt in: Barnesville, Chevy Chase Village, Glen Echo, Laytonsville, and
Poolesville.
9
The Bill would apply in all of the other municipalities unless they expressly opt out,
including Rockville and Gaithersburg. We would note that with the possible exception of
Poolesville, there are few large employers located in these municipalities.
The State law does pennit the County to enact a law that applies in each municipality under
a specific emergency procedure with 6 votes. However, the Council would have to hold a new
public hearing after giving each municipality 30 days actual notice, and make a legislative finding
that "there will be a significant adverse impact on the public health, safety, or welfare affecting
residents of the County in unincorporated areas if the law does not apply in all
municipalities." This finding by the Council would be subject to judicial review in the Circuit
Court. Furthennore, the County Code contains the following provision in §1-203:
(t)
Emergency override authority.
The County declares that it will not exercise the
authority granted to it by the General Assembly under section 2B(b)(3), article 23A,
Annotated Code of Maryland 1957, as amended.
10
Therefore, in order for the Bill to apply in all municipalities, the Council would either need to
amend § 1-203 of the County Code or add a section to Bill 60-14 expressly voiding this provision
for this Bill only to use the emergency override authority granted under State law.
11. Would the Bill apply to workers who work in the County for an employer located outside
of the County or who work outside the County for an employer located in the County?
To be a valid local law, the Bill must apply only to work perfonned in the County by an
employer who is located in the County. The dual requirement that the employer be located in the
County and the work be perfonned in the County would apply to any municipality that has
exempted itself from this law as well as other counties inside and outside of Maryland. This could
result in confusion among employers and employees. As suggested by some of the testimony, an
employer with locations inside and outside the County may have to create a system to track hours
worked by each employee in the County to properly calculate the amount of earned sick and safe
leave.
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The Chart can be found at: http://wvv.w.montgomelycoull!ymd.gov/catlservices/index.html
Although the County Attorney's chart indicates that Takoma Park exempted itself from Chapter 27, the Takoma
Park City Attorney told Council staff that the City agreed to be bound by Chapter 27 ofthe County Code and therefore
this minimum wage Bill.
10
This code section was recently re-codified as Md. Local Gov't Code §4-lll.
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Of course, an employer can avoid this confusion by providing the minimum sick and safe leave to all of its
employees without regard to place of employment.
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Issues for Committee Action
1.
The County Attorney's Bill review memorandum.
The County Attorney's Bill review memorandum (©131-133) makes several suggested
amendments.
(a)
The Bill should address potential conflicts between the requirements of the law and an
employment contract or a collective bargaining contract.
Council staff recommendation:
add
the following after line 181:
(g)
This Article must not be construed to:
(1)
require an employer to compensate an employee for unused earned sick and
safe leave when the employee leaves the employer's employment;
(2)
prohibit an employer from adopting or retaining a general paid leave policy
that meets the minimum requirement of this Article; or
(3)
affect a provision of a contract, a collective bargaining agreement, an
employee benefit plan, or any other agreement that requires the employer
to provide general paid leave benefits that meet the minimum requirements
ofthis Article.
(b)
Lines 214-216 permit an employee to use safe leave "during the time that the employee
has temporarily relocated due to the domestic violence, sexual assault, or stalking."
This provision is copied from the State law that was not enacted.
It
could cause significant
hardship for a small employer, but it would be limited to the amount of paid sick or safe leave an
employee may take in one year-
80
hours.
Council staff recommendation:
no change necessary.
(c)
Change the phrase "disclose details" on line 227 to "disclose specific details" to avoid a
conflict with the employer's right to request verification of the use of the leave if an
employee uses more than
3
consecutive days.
Council staff recommendation:
add the
language suggested on line 227.
Technical changes. Add an "or" at the end of line 266 and delete "who was" on line 278.
Council staff recommendation:
make the technical changes suggested.
(d)
2. Should the paid sick leave law apply to workers earning high wages?
The primary purpose of the Bill is to ensure that an employee working in the County may
earn paid leave to be used to miss work for specific reasons. Most of the workers in the County
who cannot afford to miss work when sick (or for other reasons described in the Bill) are low wage
workers. The Bill mandates a one-size-fits-all paid leave program that works well for a typical
12
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retail store worker or an office worker. However, it could create unique problems in certain
. industries, such as for skilled construction labor, or for certain types of highly paid employees who
do not need or require paid leave, such as professional consultants who are paid based upon billable
hours. One solution would be to exclude an employee who is paid more than 3 times the County
minimum wage, which would be $25.20 per hour, or some other multiple of the County minimum
wage.
Council staff recommendation:.
amend the Bill to exclude an employee who earns more
than 3 times the County minimum wage as follows:
Amend lines
83-9
J
as follows:
Employee does not include an individual who:
ill
£,A)
does not have
~
regular work schedule with the employer;
contacts the employer for work assignments and is scheduled
[[@J]
LID
to work the assignments within 48 hours after contacting the
employer;
[[ill1]!Q
has no obligation to work for the employer
if
the individual
does not contact the employer for work assignments; and
Hill]] LID
!2J
Section 27-68.
not employed
Qy
~
temporary placement Mency; or
Coun~minimum
is paid more than 300% of the
wage established under
3. Should the paid sick leave law apply to workers covered by a collective bargaining
agreement?
Federal law permits private sector employees to organize and bargain collectively with
their employers. These labor laws are designed to even the bargaining power between the
employer and the workers when negotiating wages and benefits. Paid leave is a mandatory subject
of bargaining. Should the government step in and mandate this benefit
if
the parties
do not
negotiate it?
.
The Bill would make minimum paid sick and safe leave similar to the County minimum
wage. The same public policy reasons for covering workers who are not governed by a collective
bargaining agreement would apply to a worker covered by a collective bargaining agreement who
does not earn any paid leave. While Council staff recommends limiting the Bill to low wage
workers, it is these same low wage workers who are unlikely to be able to bargain for adequate
leave even ifthey belong to a union.
Council staff recommendation:
do not exclude employees
covered by a collective bargaining agreement.
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4. Should the paid sick leave law apply to employers with fewer than 10 employees?
HB 385, as introduced, would have required an employer with more than 9 employees to
provide paid sick and safe leave.
An
employer with fewer than 10 employees would only be
required to provide unpaid sick and safe leave. Bill 60-14 would require an employer with 1 or
more employees to provide paid sick and safe leave. The District of Columbia law requires an
employer with fewer than 25 employees to provide less sick leave per hour worked
(l
hour for
every 87 hours worked). An employer with 25-99 employees must provide 1 hour for every 43
hours worked, and an employer with 100 or more employees must provide 1 hour for every 37
hours worked.
These lower requirements for small employers recognize the additional accounting and
coverage problems that Bill 60-14 may create for an employer with very few employees. However,
creating a lower standard for small employers would add the issue of how many employees an
employer has at any time to the investigation of a complaint. Requiring unpaid sick and safe leave
for very small employers does not relieve them from the accounting problem of tracking the leave
earned and used, but would avoid the problem ofpaying 2 people to cover the same shift.
It
would
reduce, but not eliminate, the cost of the new benefit on these employers. One size does not fit all
here. Requiring unpaid leave for an employer with fewer than 10 employees is a reasonable
compromise.
Council staff recommendation:
amend the Bill to require only unpaid leave for
an employer with fewer than 10 employees.
S. Business requests.
We received several requested amendments from businesses that have not already been
addressed. We will address them here:
(a)
Several businesses asked for a clarification that an employer's paid time off (PTO)
policy that provides the minimum number of hours of paid leave required by the
Bill would be sufficient as long as the PTO could be used for the same reasons as
sick and safe leave. Council staff believes that the language in the defmition of
earned sick and safe leave on lines 78-79 at ©4 already makes this clear. In
addition, the language Council staff recommended under Issue la above would also
clarify this.
Council staff recommendation:
no additional language needed.
The Bill would permit an employee to carry over up to 56 hours of earned sick and
safe leave to the next calendar year. Several businesses requested that this number
be reduced to 40 hours.
The Bill would require an employer to give an employee a written statement of
leave earned and used with each pay stub in lines 241-243. Several businesses
requested an amendment that would permit an employer to provide notice through
an online system that can be accessed by the employee. This is reasonable.
Council
staff recommendation:
amend lines 241-243 at ©11 as follows:
fg}
An
employer must provide an employee with
~
written statement of
(b)
(c)
available earned sick and safe leave each time the employer
14
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wages to the employee.
An
employer may s€ltisf)r this requirement
through an online system where the employee
Can
access their own
earned sick and safe leave balances.
(d)
The Bill would require 1 hour of leave for every 30 hours worked without a
mandatory minimum hours worked during the year. Several businesses requested
an amendment that would exclude an employee who works less than 80 hours
during the calendar year or less than a certain number of hours per week. HB385
would have excluded an employee who regularly works 8 hours or less per week.
An employee with this type of schedule is less likely to be forced to work when
sick.
Council staff recommendation:
amend the Bill to add these exclusions.
(e) . Lines 172-175 at ©8 would require an employer to permit an employee who begins
working outside of the County to use earned sick and safe leave accumulated for
time worked in the County. Several businesses questioned the legal authority of
the County to control the benefits provided to an employee working outside of the
County. This is part of the problem with enacting a law of this type on a County­
wide basis. The County's authority is limited to enacting a local law affecting work
performed in the County. The leave would be earned for work in the County.
Although it is not free from doubt, Council staff believes this requirement is within
the County's authority.
(f)
The Bill would require an employer to permit an employee to take leave in the
smallest increment permitted by the employer, but must not require the employee
to take leave in increments of more than 1 hour. See lines 237-240 at ©1O-11.
Several businesses requested an amendment to permit an employer to require an
employee to take leave in increments of at least 4 hours.
The Bill, as introduced, would take effect on October 1,2015. Several businesses
requested that the effective date for an employee covered by a collective bargaining
agreement that provides the minimum number ofhours ofleave take effect after the
termination of the collective bargaining agreement. This change would avoid
requiring an employer to renegotiate a collective bargaining agreement during its
term to comply with the Bill.
The Bill would require an employer to reinstate any unused earned sick and safe
leave that the employee had when the employee left the employment upon rehire.
See lines 176-179 at ©8. Several businesses requested an amendment to eliminate
this provision. This would require an employer to track unused leave for employees
who are no longer with the company and could discourage an employer from hiring
back a former employee.
(g)
(h)
15
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Circle #
This packet contains:
1
Bi1160-14
13
Legislative Request Report
14
DOL FMLA Fact Sheet
18
DC Accrued Sick and Safe Leave Poster
19
Employers' Perspectives on San Francisco's Paid Sick Leave Policy
38
Fiscal Note for HB 385
52
Fiscal and Economic Impact statement
Public Hearing Testimony
60
Commission on Aging
61
Commission for Women
64
Job Opportunities Task Force
68
Public Justice Center
71
Montgomery County Young Democrats
73
Jews United for Justice
74
SEIU Local 32BJ
76
UFC W Union Local 400
77
MomsRising.org
78
Business and Professional Women of Maryland
80
National Nurses United
82
Greater Silver Spring Chamber of Commerce
90
Gaithersburg-Germantown Chamber of Commerce
92
The Greater Bethesda-Chevy Chase Chamber of Commerce
94
Montgomery County Chamber of Commerce
96
Community Services for Autistic Adults and Children
98
Maryland Motor Truck Association
99
Restaurant Association of Maryland
101
ConTemporaries, Inc.
105
Andy Kirschner
106
Rabbi Charles
L.
Arian
107
Fran Rothstein
109
Laura Wallace
110
Marcellina Flores
112
Mimi Hassanein
113
Rachel Metz
114
Equality Maryland
115
Century Distributers, Inc.
117
Maryland Retailers Association
118
Sheet Metal and Air conditioning Contractors' Mid-Atlantic Chapter
121
The Arc Montgomery County
122
National Compensation Survey, March 2014
128
Seattle Survey Executive Summary
129
Summary of2013 DC Audit
131
County Attorney's Bill Review Memorandum
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Bill No.
60-14
Concerning: Human Rights and Civil
Uberties - Earned Sick and Safe
Leave
Revised: June 2. 2015 Draft No. _6_
Introduced:
November 25. 2014
Expires:
May 25.2016
Enacted: ___________________
Executive: ____________
Effective: _ _ _ _ _ _ _ _ __
Sunset Date: -.:..:.No=n:-=e'----:::--_ _ __
ChI _ _, Laws of Mont. Co. _ __
COUNTY COONCIL
FOR MONTGOMERY COUNTY, MARYLAND
By: Council Vice President Leventhal and Councilmembers Navarro, Branson, EIrich, Riemer, and
Hucker
AN
ACT to:
(1)
(2)
(3)
(4)
require certain employers in the County to provide earned sick and safe leave to
certain employees working
in
the County;
provide enforcement by the Office of Human Rights and the Human Rights
Commission or the appropriate State agency;
authorize the Human Rights Commission to award certain relief; and
generally regulate the sick and safe leave benefits provided to an employee working
in the County for certain employers.
By amending
Montgomery County Code
Chapter 27, Human Rights and Civil Liberties
Sections 27-7 and 27-8
By adding
Montgomery County Code
Chapter 27, Human Rights and Civil Liberties
Article XIII, Earned Sick and Safe leave
Boldface
Underlining
[Single boldface brackets]
Double underlining
[[Double boldface brackets]]
* * *
Heading or defined term.
Added to existing law by original bill.
Deletedfrom existing law by original bill.
Added by amendment.
Deletedfrom existing law or the bill by amendment.
Existing law unaffected by bill.
The County Council for Montgomery County, Maryland approves the following Act:
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BILL
No. 60-14
1
2
Sec.
I.
Sections 27-7 and 27-8 are amended and Chapter 27, Article
XUI is added as follows:
27-7. Administration and enforcement.
3
4
(a)
Filing complaints.
Any person subjected to a discriminatory act or
5
6
7
8
9
practice in violation of this Article,2 or any group or person seeking to
enforce this Article or Articles X, XI, [or] XII, or XIII may file with the
Director a written complaint, sworn to or affirmed under the penalties of
perjury, that must state:
(1) the particulars of the alleged violation;
(2) the name and address of the person alleged to have committed the
violation; and
(3) any other information required by law or regulation.
10
11
12
13
14
15
*
(f)
*
*
Initial determination, dismissal before hearing.
(1)
The Director must determine, based on the investigation, whether
reasonable grounds exist to believe that a violation of this Article
or Articles X, XI, [Qr] XII, or XIII occurred and promptly send
the determination to the complainant and the respondent.
16
17
18
19
(2)
If the Director determines that there are no reasonable grounds to
believe a violation occurred, and the complainant appeals the
determination to the Commission within 30 days after the
Director sends the determination to the complainant, the Director
promptly must certify the complaint to the Commission. The
Commission must appoint a case review board to consider the
appeal. The board may hear oral argument and must:
(A)
(B)
dismiss the complaint without a hearing;
order the Director to investigate further; or
20
21
22
23
24
25
26
27
G
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BILL
No. 60-14
28
29
(C)
set the matter for a hearing by a hearing examiner or the
board itself, and consider and decide the complaint in the
same manner as if the Director had found reasonable
grounds to believe that a violation of this Article or
Articles X, XI,
[Qr]
XII, or XIII occurred.
30
31
32
33
34
(3)
If the Director determines that there are reasonable grounds to
believe a violation occurred, the Director must attempt to
conciliate the matter under subsection (g).
35
36
37
*
27-8.
Penalties and relief.
(a)
*
*
38
39
40
41
Damages and other relieffor complainant.
After finding a violation
of this Article or Articles X.,. [or] XI.,. or XIII, the case review board
may order the payment of damages (other than punitive damages) and
any other relief that the law and the facts warrant, such as:
42
43
44
*
(2)
*
*
equitable relief to prevent the discrimination or the violation of
Articles X.,. [or] XI.,. or XIII and otherwise effectuate the purposes
of this Chapter;
45
46
*
(4)
*
*
47
48
49
any other relief that furthers the purposes of this Article or
Articles X.,. [or] XI.,. or XIII or is necessary to eliminate the effects
of any discrimination prohibited under this Article.
50
51
*
27-76.
*
*
ARTICLE XIII. Earned Sick and Safe leave.
Findin2s and Definitions.
52
53
W
Findings.
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BILL
No. 60-14
54
55
ill
ill
Many persons employed in the County do not receive earned sick
and safe leave.
The absence of earned sick and safe leave often results in the
unnecessary spread ofdisease in the County when:
(A)
an employee without earned sick and safe leave is forced
to work while
ill.;
or
56
57
58
59
60
61
62
ill)
~
parent without earned sick and safe leave is forced to
send
~
sick child to day care or school.
ill
Minimum standards for earned sick and safe leave in the County
are necessary to:
(A)
promote the health and welfare of County residents;
safeguard employers and employees against
competition;
{g
(D)
increase the stability of industry in the County; and
decrease the need for the County to spend public money
for the relief of employees who also live in the County.
unfair
63
64
65
66
ill)
67
68
69
70
(Q)
Definitions.
As used in this Article:
Abuse
has the meaning defined in Section 4-501 of the Family Law
Article ofthe Maryland Code, as amended.
71
72
73
74
75
Director
means the Executive Director of the Office of Human Rights
and includes the Executive Director's designee.
Domestic violence
means abuse against
~
person eligible for relief.
Earned sick and safe leave
means paid leave away from work that is
provided by an employer under §27-77 and can be used for the purposes
described in §27-79. Earned sick and safe leave includes paid time off
that can be used by the employee for any purpose.
76
77
78
79
80
Employ
means to engage
~
person to work for compensation.
o
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BILL
No.
60-14
81
Employee
means any person permitted or instructed to work or be
82
present
~
an employer in the County, including
~
domestic worker as
defined in Section 11-4B(b). Employee does not include an individual
who:
83
84
85
86
ill
ill
does not have
~
regular work schedule with the employer;
contacts the employer for work assignments and is scheduled to
work the assignments within 48 hours after contacting the
employer;
87
88
89
ill
has no obligation to work for the employer if the individual does
not contact the employer for work assignments; and
90
91
ill
is not employed
~ ~
temporary placement agency.
92
93
94
95
Employer
means any person, individual, proprietorship, partnership,
joint venture, corporation, limited liability company, trust, association,
or other entity operating and doing business in the County that employs
1
or more persons in the County in addition to the owners.
any State, or any other local government.
Family member
means:
Employer
96
97
includes the County government, but does not include the United States,
98
99
ill
ill
ill
~
biological child, adopted child, foster child, or stepchild of the
100
101
102
employee;
~
child for whom the employee has legal or physical custody or
guardianship;
~
child for
103
104
105
106
whom the employee is the primary caregiver;
ill
ill
S!
biological parent, adoptive parent, foster parent, or stepparent of
the employee or the employee's spouse;
the legal guardian ofthe employee;
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BILL No. 60-14
107
108
109
®
an individual who served as the prImary caregIver of the
employee when the employee was
£!
minor;
ill
the spouse of the employee;
£!
grandparent of the employee;
110
lID
(2}
111
112
113
the spouse of
£!
grandparent of the employee;
Q.Q}
£!
grandchild of the employee;
(lD
£!
biological, adopted, or foster sibling of the employee; or
(2)
the spouse of
£!
biological, adopted, or foster sibling of the
employee.
Health care provider
means an individual licensed under State law to
114
115
116
117
provide medical services.
Person eligible fOr relief
has the meaning stated in Section 4-501 of the
118
119
Family Law Article of the Maryland Code, as amended.
Sexual assault
means:
120
121
122
123
124
125
126
127
128
129
130
131
132
ill
rape, sexual offense, or any other act that is
£!
sexual crime under
Title
~
Subtitle
J.
of the Criminal Law Article of the Maryland
Code, as amended;
ill
ill
child sexual abuse under Section 3-602 of the Criminal Law
Article ofthe Maryland Code, as amended; or
sexual abuse of
£!
vulnerable adult under Section 3-604 of the
Criminal Law Article of the Maryland Code, as amended.
Stalking
has the meaning stated in Section 3-802 of the Criminal Law
Article of the Maryland Code, as amended.
Tipped employee
means an employee who:
ill
is engaged in an occupation in which the employee customarily
and regularly receives more than $30 each month in tips;
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BILL
No.
60~14
133
134
135
136
137
138
139
140
141
142
143
144
145
146
147
148
149
150
151
152
153
154
155
ill
ill
27-77.
.ill)
has been informed
by
the employer about the provisions of this
Section; and
has kept all of the tips that the employee received.
Earned Sick and Safe Leave Required.
Earned sick and safe leave.
An employer must provide each employee
earned sick and safe leave for work performed in the County paid at the
same rate and with the same benefits as the employee normally earns.
A tipped employee must be paid at least the County minimum wage
required under Section 27-68 for each hour the employee uses earned
sick and safe leave.
(hl
Rate gf Accrual.
The earned sick and safe leave provided under
subsection
.ill)
must accrue at
!!
rate of at least
1
hour for every 30 hours
an employee works in the County, except an employer must not be
required to allow an employee to:
ill
ill
W
earn more than 56 hours of earned sick and safe leave in
!!
calendar year; or
use more than 80 hours of earned sick and safe leave in
!!
calendar year.
Retaliation prohibited.
A person must not:
ill
retaliate against any person for:
CA)
lawfully opposing any violation of this Article; or
ill}
filing
!!
complaint, testifying. assisting, or participating in
any manner in an investigation, proceeding, or hearing
under this Article; or
156
157
158
ill
27-78.
obstruct or prevent enforcement or compliance with this Article.
Minimum Earned Sick and Safe Leave Standards.
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BILL
No. 60-14
159
160
161
162
163
164
165
166
167
168
169
170
171
172
173
174
175
176
177
178
179
180
181
182
183
184
185
W
An
employer may award earned sick and safe leave as the leave accrues
during the calendar year or may award the full amount that an employee
would earn over the entire calendar year at the beginning of
§:
calendar
year.
(hl
To calculate the rate of accrual of earned sick and safe leave for an
employee who is exempt from the overtime provisions of the Federal
Fair Labor Standards Act, the employer must assume the employee
worked the number of hours worked in
hours each workweek.
§:
normal workweek
!ill
to 40
{£)
An
employer must permit an employee to
fill!Y
the balance of any
unused earned sick and safe leave over to the next calendar year, but an
employer must not be required to permit an employee to
fill!Y
over
more than 56 hours of unused earned sick and safe leave.
@
If an employee begins working outside the County for the same
employer, the employer must permit the employee to use the earned
sick and safe leave that accrued while working for the employer in the
County.
ill
27-79.
An employer may permit an employee to use earned sick and safe leave
before the amount needed
Qy
the employee accrues.
Use of Earned Sick and Safe Leave.
W
An
employee may use earned sick and safe leave:
ill
to care for or treat the employee's mental or physical illness,
injury, or condition;
o
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BILL
No. 60-14
186
187
188
189
190
191
192
193
194
195
196
197
198
199
200
201
202
203
204
205
206
207
208
209
210
211
ill
ill
ill
ill
to obtain preventive medical care for the employee or the
employee's family member;
to care for !! family member with !! mental or physical illness,
injury, or condition;
if the employer's place of business has closed
.Qy
order of !!
public official due to !! public health emergency;
if the school or child care center for the employee's family
member is closed
.Qy
order of !! public official due to !! public
health emergency;
(Q)
to care for !! family member if !! health official or health care
provider has determined that the family member's presence in the
community would jeopardize the health of others because of the
family member's exposure to !! communicable disease; or
m
if the absence from work is due to domestic violence, sexual
assault, or stalking committed against the employee or the
employee's family member and the leave is used:
W
.Qy
the employee to obtain for the employee or the
employee's family;
ill
medical attention needed to recover from !! physical
or psychological injury due to domestic violence,
sexual assault, or stalking;
(ii)
services from !! victim services organization related
to the domestic violence, sexual assault, or stalking;
or
(iii)
legal
services,
including
preparmg
for
or
participating in!! civil or criminal proceeding related
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BILL
No.
60-14
212
213
to the domestic violence, sexual assault, or stalking;
or
214
215
216
217
218
219
220
221
.an
during the time that the employee has temporarily
relocated due to the domestic violence, sexual assault, or
stalking.
(hl
To use earned sick and safe leave, an employee must:
ill
ill
ill
W
request leave from the employer as soon as practicable after the
employee determines that the employee needs to take leave;
notifY the employer of the anticipated duration of the leave; and
comply with any reasonable procedures established
Qy
the
employer when requesting and taking leave.
222
223
224
225
226
227
228
229
230
231
232
233
234
235
236
237
238
An employer must not require an employee who requests earned sick
and safe leave to search for or fmd an individual to take the employee's
place while the employee takes leave.
@
An employer must not require an employee to:
ill
ill
disclose details of the mental or physical illness, injury, or
condition of the employee or the employee's family member; or
provide as certification any information that would violate the
Federal Social Security Act or the Federal Health Insurance
Portability and Accountability Act.
ill
By mutual consent of the employee and the employer, the employee
may work additional hours or trade shifts with another employee during
~
00 period to make
1!P
the amount of work hours that the employee
missed for which the employee could have used earned sick and safe
leave.
ill
An employee may take earned sick and safe leave in the smallest
increment that the employer's payroll system uses to account for
®
F:\LAw\BILLS\1460 Earned Sick And Safe Leave\BiII6.Doc
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BILL
No.
60-14
239
240
241
242
243
244
245
246
247
248
249
250
251
252
253
254
255
256
257
258
259
260
261
262
263
absences or work time, except that an employee must not be required to
take earned sick and safe leave in an increment of more than
1
hour.
(g)
An
employer must provide an employee with
~
written statement of
available earned sick and safe leave each time the employer
~
wages
to the employee.
®
An
employer may reqUIre an employee who uses more than
J.
consecutive days of earned sick and safe leave to provide reasonable
documentation to verifY that the leave was used appropriately.
27-80.
Notice.
tru
®
An
employer must notifY the employees that they are entitled to earned
sick and safe leave under this Article.
The notice must include:
ill
ill
ill
ill
1.£)
~
statement of how earned sick and safe leave is accrued;
the permitted uses of earned sick and safe leave;
g statement that the employer must not retaliate against an
employee for exercising the rights granted
Qy
this Article; and
information about the employee's right to file
~
complaint with
the Director for
~
violation of any rights granted
Qy
this Article.
The Director must create and publish
~
model notice in English,
Spanish, and any other langugge that the Director fmds is necessary that
may be used
Qy
an employer to comply with subsection
.c121
@
An
employer may provide notice by:
ill
displaying the model notice or another notice containing the same
information
in
§:
conspicuous and accessible area at each of the
employer's work locations in the County;
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BILL
No.
60-14
264
265
266
267
268
269
270
271
272
273
274
275
276
277
278
279
280
281
282
283
284
285
286
287
288
289
290
ill
including the model notice or another notice containing the same
information in an employee handbook or other written guidance
distributed to all employees;
ill
27-81.
distributing the model notice or another notice containing the
same information to each employee when the employee is hired.
Records.
ill
An employer must keep, for at least
1
years,
~
record of:
ill
ill
earned sick and safe leave accrued
Qy
each employee; and
earned sick and safe leave used
Qy
each employee.
~
~
®
After giving the employer notice and determining
time for the inspection, the Director may inspect
mutually agreeable
record kept under
subsection
ill
for the purposes of determining whether the employer is
complying with this Article.
27-82.
Enforcement.
ill
A covered employee who was who did not receive earned sick and safe
leave in violation of this Article may file
~
complaint with the Director
under Section 27-7.
®
The County Executive may delegate the authority to enforce this Article
to
~
State agency that is legally authorized to enforce the County earned
sick and safe leave requirements.
Sec. 2.
Transition.
Notwithstanding Section 27-77, as added in Section 1, earned sick and
safe leave must begin to accrue for all work performed in the County on or after
October 1,2015. An employer must not be required to permit an employee to accrue
earned sick and safe leave for hours worked before October 1, 2015.
Sec. 3.
Effective Date.
This Act takes effect on October 1,2015.
@)
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LEGISLATIVE REQUEST REPORT
Bill 60-14
Human Rights and Civil Liberties
-
Earned Sick and Safe Leave
DESCRIPTION:
Bill 60-14 would require an employer operating and doing business
in the County to provide earned sick and safe leave to each employee
for work performed in the County. Earned sick and safe leave is paid
leave away from work that can be used for the injury or illness of the
employee or the employee's immediate family or due to domestic
violence suffered by the employee or the employee's immediate
family. Earned sick and safe leave would also include paid time off
that can be used by the employee for any purpose.
Many employees in the County are forced to come to work when
they are
ill
because they do not have paid sick leave.
The goal is to reduce the number of employee who are forced to
come to work when
ill
or send sick children to school or day care
because they have no paid sick leave.
Office of Human Rights
To be requested.
To be requested.
To be requested.
Local paid sick leave laws have been enacted in several jurisdictions,
including the District of Columbia and San Francisco.
Robert H. Drummer, Senior Legislative Attorney
To be researched.
PROBLEM:
GOALS AND
OBJECTIVES:
COORDINATION:
FISCAL IMP ACT:
ECONOMIC
IMPACT:
EVALUATION:
EXPERIENCE
ELSEWHERE:
SOURCE OF
INFORMATION:
APPLICATION
WITmN
MUNICIPALITIES:
PENALTIES:
Compensatory damages and equitable relief.
f:\law\bills\1460 earned sick and safe leave\lrr.doc
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U.S. Department of Labor
Wage and Hour Division
liD
(Revised 2012)
Fact Sheet #28: The Family and Medical Leave Act
The Family and Medical Leave Act (FMLA) entitles eligible employees of covered employers to take
unpaid, job-protected leave for specified family and medical reasons. This fact sheet provides general
information about which employers are covered by the FMLA, when employees are eligible and entitled
to take FMLA leave, and what rules apply when employees take FMLA leave.
COVERED EMPLOYERS
The FMLA only applies to employers that meet certain criteria. A covered employer is a:
Private-sector employer, with 50 or more employees in 20 or more workweeks in the current or
preceding calendar year, including a joint employer or successor in interest to a covered
employer;
Public agency, including a local, state, or Federal government agency, regardless of the number
of employees it employs; or
Public or private elementary or secondary school, regardless of the number of employees it
employs.
ELIGIBLE EMPLOYEES
Only eligible employees are entitled to take FMLA leave.
An
eligible employee is one who:
Works for a
covered employer;
Has worked for the employer for at least
12
months;
Has at least
1,250 hours
of service for the employer during the 12 month period immediately
preceding the leave*; and
Works at a location where the employer has at least
50 employees within
75
miles.
* Special hours of service eligibility requirements apply to airline flight crew employees.
See
Fact Sheet
28J: Special Rules for Airline Flight Crew Employees under the Family and Medical Leave Act.
The 12 months of employment do not have to be consecutive. That means any time previously worked
for the same employer (including seasonal work) could, in most cases, be used to meet the 12-month
requirement. If the employee has a break in service that lasted seven years or more, the time worked
prior to the break will not count
unless
the break is due to service covered by the Uniformed Services
Employment and Reemployment Rights Act (USERRA), or there is a written agreement, including a
collective bargaining agreement, outlining the employer's intention to rehire the employee after the
break in service.
See
"FMLA Special Rules for Returning Reservists".
LEAVE ENTITLEMENT
Eligible employees may take up to 12 workweeks ofleave
in
a 12-month period for one or more of the
following reasons:
FS 28
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The birth of a son or daughter or placement of a son or daughter with the employee for adoption
or foster care;
To care for a spouse, son, daughter, or parent who has a serious health condition;
For a serious health condition that makes the employee unable to perform the essential functions
of his or her job; or
For any qualifying exigency arising out of the fact that a spouse, son, daughter, or parent is a
military member on covered active duty or call to covered active duty status.
An eligible employee may also take up to
26 workweeks
of leave during a "single 12-month period" to
care for a covered servicemember with a serious injury or illness, when the employee is the spouse, son,
daughter, parent, or next of kin of the servicemember. The "single l2-month period" for military
caregiver leave is different from the l2-month period used for other FMLA leave reasons.
See
Fact
Sheets 28F: Qualifying Reasons under the FMLA and 28M: The Military Family Leave Provisions
under the FMLA.
Under some circumstances, employees may take FMLA leave on an intermittent or reduced schedule
basis. That means an employee may take leave in separate blocks of time or by reducing the time he or
she works each day or week for a single qualifying reason. When leave is needed for planned medical
treatment, the employee must make a reasonable effort to schedule treatment so as not to unduly disrupt
the employer's operations. If FMLA leave is for the birth, adoption, or foster placement of a child, use of
intermittent or reduced schedule leave requires the employer's approval.
Under certain conditions, employees may choose, or employers may require employees, to "substitute"
(run concurrently) accrued paid leave, such as sick or vacation leave, to cover some or all of the FMLA
leave period. An employee's ability to substitute accrued paid leave is determined by the terms and
conditions of the employer's normal leave policy.
NOTICE
Employees must comply with their employer's usual and customary requirements for requesting leave
and provide enough information for their employer to reasonably determine whether the FMLA may
apply to the leave request. Employees generally must request leave 30 days in advance when the need
for leave is foreseeable. When the need for leave is foreseeable less than 30 days in advance or is
unforeseeable, employees must provide notice as soon as possible and practicable under the
circumstances.
When an employee seeks leave for a FMLA-qualifying reason for the first time, the employee need not
expressly assert FMLA rights or even mention the FMLA. If an employee later requests additional leave
for the same qualifying condition, the employee must specifically reference either the qualifying reason
for leave or the need for FMLA leave.
See
Fact Sheet 28E: Employee Notice Requirements under the
FMLA.
Covered employers must:
(I)
Post a notice explaining rights and responsibilities under the FMLA (and may be subject to a
civil money penalty of up to $110 for willful failure to post);
Include information about the FMLA in their employee handbooks or provide information to
new employees upon hire;
(2)
2
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(3)
When an employee requests FMLA leave or the employer acquires knowledge that leave may be
for a FMLA-qualifying reason, provide the employee with notice concerning his or her eligibility
for FMLA leave and his or her rights and responsibilities under the FMLA; and
Notify employees whether leave is designated as FMLA leave and the amount ofleave that will
be deducted from the employee's FMLA entitlement.
(4)
See
Fact Sheet 28D: Employer Notice Requirements under the FMLA.
CERTIFICATION
When an employee requests FMLA leave due to his or her own serious health condition or a covered
family member's serious health condition, the employer may require certification in support of the leave
from a health care provider. An employer may also require second or third medical opinions (at the
employer's expense) and periodic recertification ofa serious health condition.
See
Fact Sheet 28G:
Certification of a Serious Health Condition under the FMLA. For information on certification
requirements for military family leave,
See
Fact Sheet 28M(c): Qualifying Exigency Leave under the
FMLA; Fact Sheet 28M(a): Military Caregiver Leave for a Current Servicemember under the FMLA;
and Fact Sheet 28M(b): Military Caregiver Leave for a Veteran under the FMLA.
JOB RESTORATION AND
HEALTH BENEFITS
Upon return from FMLA leave, an employee must be restored to his or her original job or to an
equivalent job with equivalent pay, benefits, and other terms and conditions of employment. An
employee's use ofFMLA leave cannot be counted against the employee under a "no-fault" attendance
policy. Employers are also required to continue group health insurance coverage for an employee on
FMLA leave under the same terms and conditions as if the employee had not taken leave.
See
Fact Sheet
28A: Employee Protections under the Family and Medical Leave Act.
OTHER PROVISIONS
Special rules apply to employees of local education agencies. Generally, these rules apply to
intermittent or reduced schedule FMLA leave or the taking of FMLA leave near the end of a school
term.
Salaried executive, administrative, and professional employees of covered employers who meet the Fair
Labor Standards Act (FLSA) criteria for exemption from minimum wage and overtime under the FLSA
regulations, 29 CFR Part 541, do not lose their FLSA-exempt status by using any unpaid FMLA leave.
This special exception to the "salary basis" requirements for FLSA's exemption extends only to an
eligible employee's use ofFMLA leave.
ENFORCEMENT
It
is unlawful for any employer to interfere with, restrain, or deny the exercise of or the attempt to
exercise any right provided by the FMLA.
It
is also unlawful for an employer to discharge or
discriminate against any individual for opposing any practice, or because of involvement in any
3
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proceeding, related to the FMLA.
See
Fact Sheet 77B: Protections for Individuals under the FMLA . The
Wage and Hour Division is
resp~nsible
for administering and enforcing the FMLA for most employees.
Most federal and certain congressional employees are also covered by the law but are subject to the
jurisdiction of the U.S. Office ofPersonnel Management or Congress. If you believe that your rights
under the FMLA have been violated, you may file a complaint with the Wage and Hour Division or file
a private lawsuit against your employer in court.
For additional information, visit our Wage and Hour Division Website:
http://www.wagehour.dol.govand/orcallourtoll-freeinformationandhelpline.available8a.m.to
5 p.m. in your time zone, 1-866-4-USWAGE (1-866-487-9243).
This publication is for general information and is not to be considered in the same light as official
statements ofposition contained in the regulations.
U.S. Department of Labor
Frances Perkins Building
200 Constitution Avenue, NW
Washington, DC 20210
1-866-4-USWAGE
TTY:
1-866-487-9243
Contact Us
4
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OFFICIAl_ NOTICE
(post Where Employees Call Easily Read)
AVISO OFICIAL
(Publicar en un Ingar en que pueda ser leido Cacilmente por los empleados)
REQUIRES 1':l\tPI.,QYERS IN Tm: DISTRICT
en'
COl.UMBIA
TO
PROVIDE PAID LFA
VE
TO
~:MPLOYEES
FOR THEIR OWN OR FAMILY MEMBERS' ILLNESSES OR MEDICAL
APPOINTMENTS AND FOR ABSENCES ASSOCIATED WITH DOMESTIC VIOLENCE OR
SEXUAL ABUSE.
EMPLOYERS REQUIRED TO COl\-IPLY
WITH
THE A<"1'
Pursuant to the Accrue,l Sick and Safe uave Act of
2008,
all employers ill the Distrkt of Columbia must
provide paid leave to each employee. including employees of restaurant.
and bors
a11d temporary and
port·
timc employees.
ACCRUAL START DATE
Paid leave
aCCl1le5
at the beginning of employment, provided that the accrual need not commence prior to
November 13, ::008 and provided that an employer need not allow
.~'Crual
of paid leave for tipped res,,"urant
or bar
employees
prior
to
FebfUlll:y
22,2014.
Paid leave accrues on an employer's esr.ahll'hed
pay
period.
(I'his [foster includtti:
Pfft\'JsWn.~
or
tht Earned Sick and Nlfe Ltave
A.nu'lIdnw-nl
Ad
bf2613~
eI1'ttU"to
Februar~·
22\ 2n14)
Accrued Sick and Safe Leave Act of 2008
Ley
de Licencia por Enrermedad
y
Seguridad Generada (ASSLA) de 2008
induyedi.spwik'iones df' (.1
t..
ty
Modifictlti\'a dC!" Lkt.>ncia
por
f:nt«ntfl'fad,.
~urid.M1
t;:.mtntda
de
2&1.3.
'¥igenle
d~d~
cl22 de
(l-bttl"~~
2014)
mfl,1"(~ ~Ifil,.'ht;
OBLIGA A LOS EMPU:AVORt:s m:l, D1STRITO DII: COUJMBIA A OTORGAR LlCENCIA
PAGA A LOS EMPLFADOS EN CASO DE ENFERMEDAD 0 CONSULTAS MEDlCAS PRO'I",.'!
o
DE SUS FAMIL1ARES
Y
DE AUSENCIAS RELACIONADAS CON VlOLENCIA DOMESTICA
0
ABUSO SEXUAL.
LOS KI\1PLEADOKt::s QUE DEBEN CUMPLIR CON LA 1.EY
De conformidad con la
de Licencia !lor Enfertnl!'dad y Seguridad Generada
de 2008
(Accrued Sick and
Safe Leave Act
of
20(8),
toeIos In.
empleadore. del Distrito de Columbia deben ",orgar licencia paga a todos
empleados. incluycndo
a
10.
crnplcados de restautantes y hares
y
a
I",
cmplendOll temporarios
y
de tiempo
uy
FECHA DE INICIO DE LA GENERACION
La licencia
pllga
comienza a
gcncrllrsc
a1
iniciQ del empie<'), ,r;iemprc que no deba cornenzar a genera.rsc antes
del 13 de noviembre de 2008
y
siempre que e1 enlvleaoor
110
deb. pennitir I. generaci6n de Iiceneia paga para
empleados de rest.urante
0
bar con propina antes del
22
de febrero de
2014.
La
liccncia pug•.
'Ie
acumula en
d
periodo de pago .stablecido por un cmpleador.
F'ECHA DE INICIO DE LA UCENUA ACUMULAVA
Debe"i pennitirse utili.ar la lkencia paga al empleado a mis tardar
a
los
90
dias de su se!Vicio con el
empleador. Un empleado podra utilizar
I.
licencia con
lin
aviso con poea anticipacion si el motive de
I.
ficencia
e~
imprevisible.
NllMERO DE RORAS ACl,;'ML'LADAS
La
acumulacion de la licencia paga se detennina de acueroo al tipo de
ncgocio,
cl
nllmero
dc,
empleados con
que <ucota.1 empleador
y
el nllmer<> de horus trabl\iadas por
"I
empleado. Para empleadOi! de restauranles
y
i:Y<lfes
con propill!l, independientemente del numero de empleados con
que
euenle
01
empleador. cada
enlplead() con propina debern .cumular al meno' una
(I) hor
cada 43 horas trabajadas. con ha-'ta cinco
(5)
..
d'.. por ailo calend.rio. Para <I resto de los empleadores. se dehera utilizar la siguienre tabla:
ACCESSL'lG PAID LEAVE
An employee nlust he .Ik)wed to use paid leave
M
later thall after 90 days of ,crvic'e with the employer.
An
ernploy'ee may
u~e
leave on short
n01ice
if
the reu!'('10 for leave
i~
unforeseeabl:e.
NUMBER OF HOURS ACCRUED
A.ccrual
ftf
paid leave is determined hy the type of busjnc.Scs. the number of employees an employer has, and
the number
of hours an
employee works.
For
tipped employees of restaurant.
or
bars, regardl", of the
number of
employ~s,
the empk'yer
has~
each tipped employee must accrue at least one (I) hour per 43 hours
worked,
up
to
flve
(5)
days
per
calendar
year.
ror all "lher employers. use the following chart:
.Ifan
employer
has.. ,
100
or more employees
F:mploy•••••
crue
at leut.,.
I hour pc.r
37
hours w_ork.."..c_d_ _ _
l-:-_ _'-_-:--:--'-_ _
---1
Si
un
empleadar cuenta con
100
0
25
to
99
empl;;~
uss than
25
employees
I
hour per
43
hours worked
I hour per
87
hours worked
m•• emplead(),
Los empleados acumulan aJ menos ••• Sin
o:ceder
7 dias por al10 calcndario
I
hora por cad.
37
hora, trabajadns
I hora
por cada
43
boras rrabajlldu
I
h"ra
pm
cada 117 hor••
trabajadas
ar ye.ar
25
a
99
emplcados
i.............
Menos de
25
cmplcad"s
5
d'a. por ano culendario
3
d(.s
pot
afio calcndario
UNUSED LEA VE
Under this Act, an employee's accrue..i paid sick leave
carries
over from year to year. Employers do not have
to pay employees
for
unused paid sick
lea
ve upon termination
or
resignalion of employment.
E~1PLOYEE
PROTECTION
Under
the A.ct,
employees who assert their rignts to receive paid
sick
leave
or
provide infomlarion
.ssi,,,"nce
to
help
enforce the Act .re
protec.1l:d
from ret.ali.uon.
LlCENCL4.
NO
UTILIZADA
De '"-'uerdo a esta
uy.
I.
Iieenci. con gooe de pago devengada por un
"mple.~)
se transfiere de un
aiio aI
signiente, Los empleadores
nO
deheriin pag.r a los enlpleados por las lieend"s por enfermedad no utilizadas
aI
momento de la temlinacioo del cmplw {) renuncia al mismo.
PROTECCION DEL BMPI.EADO
De acuerdo a la
uy.
los emple"dos que hagan voler Sus derechos a redbir liceneia
pot
enfermedad pag. "
proporeionell infol1naci6n
0
asistenci. panl ayudar
a
hacer eumplir la uy est.u, protegidos contra reprosalias.
ClIMPUMIENTO DE mCHA LEY
El Depanameml) de Servicios de Empleo del Dislrito de Columbia, Ofldna de Salaria.
y
Horns (DC
Depa.tmem of Employment Services. Offll'e of Wage and Hour) puede jnvesligar p08ible. violaciones,
acceder a I", registros de 10' emplcadores, haccr cumplir
I""
obligaciones de Iicencia
pot
enfemll:dad pago,
orden'" el reinlegro de empleados que hayan sido despedidos como re,ultado de
!a
afirntaci6n de los derechos
de Iicencia por enfennedad paga, ordenar el pago de Iiceneins por enfermedad pag" negad.. i1egalmente e
,1r
ENFORCEMENT
Tne
DC
Department of Empll>yment Services, Office of
Wage
and Hour
can
investigate possible violatiol\S,
access employer recordR, enforce the· paid sick leave
requirements~
order reinstatement of employees who are
temun.ted.
as a
result
c)f
asserting rights to paid sick le.ve, order payment of paid
sick
leave uulawfully
witbheld. and impose penalties.
violates the requirements of the Act sholl
be
assessed a civil penalty in the amount
for the first offense. fifteen hundred dollars (S I
,500)
ior the second offellse,
for the third and any subsequent offenses.
imponer sancione-s.
Un emplcador que i"teneionalmente viole los requisitos de la Ley sera objeto de una multa civil por el impor1C
de mil
d61are~
($1,000) por In primer infraction, mil quiniento. d610res ($1,500)
pot
I. segunda infraccion, y
..
dos ,nil dlilares ($2,000) para la tercera infr:lJ.'cilin y subsiguil!'lltes.
TO }'ILE A COl\1PLAll'oT OR
FOR
ADDITIONAL lNt'ORl'tIATION
t full text of the Act. to obtain a copy of the rules associated with this
Act.
to receiv<!' 1M Act
imo other languages. or to file a complaint, visit
,l;!.'!!:~A.~~~\I£,gQ.\',
call the Office of Wage and
Hour
at
(2(,:!) b71·1880. or visit at 4058 Minnesota Avenue, N.E., Suire 4300. Washington, D.C. 2001,).
Complaints 'hall
be
filed within three (3} years afler lhe evenl on which the complaint
is
based unless tbe
employer h... failed to po.t nmice of
the
Act.
PARA PRESENTAR UNA RECLAMACION
0
'OR
IN~'ORMACION
ADiCIONAL
Para .olidtar el texto
~'Ompleto
de la
Ley,
para obtener una copi. de las reglamentaciones nsociadas a esta
Ley,
para recibir la uy tradudda a
,)IroS
idiomas.
0
para presentar lIna reclamaci6n. visite www,does.dc,gov ,
name a I. Oficina de Salarios y Horas (Oftice of Wage and HourI al {2(2)
671·11l80.
0
concurra
personalmente a
4058
Minnesota Avenue, NE, Suite 4300, Washington.
DC
20019.
La"
redamacioncs
deberan ser preseutadas demfo de los Ires (3) alios despues del eVent<) en
e1
que se ba"" la reclamacion a
meno' que el enlple.dor
baya
omitido public", el aviso de In Ley.
REVlSAOO febrero 22, 2014
®
REVISEO February 22,2014
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m
1 yers'
ers
ectlves on
,
San
raI1ClSCO S
I)ai
IC
eave
liey
."
Shelley
U%ltCl:;'
Boots, Karin Jvlartinson,
and
An
nil
D(lnziger
Low-InconlC
Working
FaJniHcs
Paper 12
A1arch 2009
II
The Urban Institute
2100 M Street, NW
Washington, DC 20037
@
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Copyright
©
March 2009. The Urban Institute. All righrs reserved. Except for short quotes. no pan of this paper may be repro­
duced in any form
or
used in any form by ally means. eiectJ'onic or mechanical, including photoc()pying, recording.
01'
by infor­
mation storage or retrieval system, without written permission from the Urban Institute.
This report is part of the Urban Institute's Low-Income Working Familie$ project,
;1
multiyear effort that focuses on the private­
and public-sector contexts for families' success or failure. Both contexts offer opportunities tor better helping families meet their
needs.
The Low-Income Working Families project is currently supported by The Annie E. Casey Foundation and The John D. and
C,ttherine
T.
I"facArthur Foundation.
The authors wish
to
thank the employers who took valuable time to participate in this study. In addition, numerous business asso­
ciation leaders,
city
officials and labor advocates spent time providing their perspectives and helping identifY respondents
f.Jf
this
study. In particular. the authors th.mkJim Wunderman ofthe Bay Area Council and Netsy Fires(ein of [he Labor P1'Ojecr for Work­
ing Families for reviewing a draft of the report. Pam Lopresr and Margaret Simms also provided helpful suggestions to earlier
drafts. The .mthors are a.lso grateful to Heidi Johnson for her excellent assistance on the site visit.
The nonpartisan Urban Institute publishes studies, reporrs, and books on timely topics worthy of public consideration. The
views expressed arc those of the amhors and should not be attributed
to
the lJl'ban Institute, its fmstees, or its
fimder.5.
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CONTENTS
San Francisco Ordinance and Context
About This Study
3
4
Employer Strategies for Implementing Paid
Sick
Leave
Expanding Leave for All or Some Employees
Establishing a Paid Time OtfPolicy
5
5
6
6
Replacing Other Benefits and/or Compensation with
Sick
Leave
Changing Accrual Rates and Probationary Periods
7
Employer Experiences Implementing the Paid
Skk
Leave Ordinance
Summary
Notes
References
13
7
12
15
17
About the Authors
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EMPLOYERS' PERSPECTIVES
ON SAN FRANCISCO'S
PAID SICK LEAVE POLICY
Over rhe past several years, paid sick leave has become an important issue on rhe policy stage.
I
A
2004
report by the Institute for \Vomen's Policy Research helped thrust sick lea.ve into the spotlight when it
found that 49 percent of all workers were unable to take paid sick leave for themselves or for sick family
members (Lovell
2004).
Other research has confirmed that an even greater share of the workforce­
54 percent-cannot rake time offfrom work
to
care for sick children without losing payor using vacation
time (Galinsky, Bond, and Hill
2004).
Eighty-three percent of workers go
to
work when they are ill,
and 21 percent do so explicitly
to
save their sick leave to stay home when their children are sick (ComPsych
Corporation
2(07).
A key finding in much of this research is that low-income workers often lack access to paid time
otE
In
fuet, data from nationally representative samples show that high-wage employees are more than twice as.
likely as low-wage employees to be able to take time off without penalties to care for their sick children
(Galinsky et a1.
2004).
According to tlle Labor Departmenr, private-sector workers making less than $15
an hour are less li.kely than higher-paid workers to have access to any paid sick time. paid vacation time,
or paid personal time (U.S. Bureau of Labor Statistics
2007).
Children in low-income families are also
much less likely to have a parent with paid sick leave than children in higher-income fi:unilies, even among
families with two employed parents (Clemans-Cope et a1.
20(8).
To
address this lack of paid sick leave, several jurisdictions have implemented or are considering a new
labor standard that would require employers to provide paid sick leave. The
city
ofSan Francisco was the
first
to
pass such a law in 2006, but it is by no means alone in
it~
efforts. In March 2008, the District of
Columbia became the second locality
to
pass a mandate on employers guaranteeing paid sick leave to
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workers. The bill is modeled after the San Francisco ordinance, but it differs on several details. Milwau­
kee, Wisconsin, voters also passed a sick leave mandate in November 2008. In addition, the federal gov­
ernment as well as other states and localities have introduced legislation on this issue (box
1).
A growing body of research shows the benefits
to
employees of having access to paid sick k"ave. In partic­
ular, the public health benefhs appear strong; paid sick leave helps reduce the spread of infectious diseases,
stich as influenza, and hospitalizations and health care
COStS
for preventable chronic conditions (Bhatia
2007; l-Iartmann 2007). One analysis finds that workers with preventable chronic conditions have less
access
to
paid sick leave, suggesting that workers with greater medical care needs face an additional barrier
to addressing their illnesses (Bhatia et al. 2008).
Information on the business impacts of providing paid sick leave is more limited.
To
be sure, many
employers already provide sick leave beneHts to some ofor all their employees, in pan because ofbenefits to
their business. For example, the availability of paid sick leave ha<; been lin ked
to
reduced voluntary and
involuntary job turnover for employers (Cooper and Monheit 1993; Dodson, Manuel, and Bravo 2002;
Earle and Heymann 2002; Heymann 2000). In addition, the provision ofpaid sick leave appears
to
improve
business productivity by limiting "presenteeism," or when employees work while
ill,
and ensuring that work­
ers are healthier while on the job (CCH Incorporated 2003; Goetze! et al. 2004; Hemp 2004; Lovell 2004).
However, mandated employer benefits increase labor costs for businesses, which can lead to employer
actions
to
minimize or offset these costs. A large body of research on employer mandates shows that busi­
nesses will generally pass on any increased costs
to
their employees, through reduced wages and benefits,
or to their customers, through increased prices. To minimize costs, employers may also reduce workers'
hours
to
avoid workers' benefits from accruing, or maintain lower staffing levels than they otherwise
would, for example
by
reducing the number of employees. This is particularly
likely
for employers with
a minimum-wage labor torce, who face wage rigidity (Summers
1(89).
An initial look at San Francisco's
employment rate in the year following implementation showed that the city "maintained a competitive
job growth rate" (Lovell and Miller 2008, 1). However, a paid sick leave requirement has unknown longer­
term implications. The Institute for Women's Policy Research has analyzed potential cost.s and benefits of
paid sick leave policies and predicts a net savings for employers, employees and their fanlilies, and society
(Lovell and Miller 2005). The National Federation ofIndependent Business, on the other hand, estimates
major job losses and lost sales revenue associated with sick leave requirements (Phillips 2008a, 2008b).
BOX
1.
Paid Sick
Ledlle
Policy Initiatives, 2008
SQUIrt:
N~tion,Il
Partnership for WOn\c"n and F'Hnilic"s, "In the St.l.tcs:' bttp:llwww,nationalpartnership.org/site/Pagt"Server?pJgenam<"'psd_toolkic
map_statcs,
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San Francisco Ordinance and Context
The San Francisco Paid Sick Leave Ordinance (PSLO) passed as Proposition F by a ballot initiative spon­
sored
by
the San Francisco Board of Supervisors in November 2006.
It
amended the city's administrative
code by mandating that all employers grant their employees working in the city a minimum amount of
paid sick leave. This law is notable in that it provides time off for health-related needs for the worker as
well as the workers'
family
members or other "designated person." In addition, the law passed in San
Francisco applies to all employers in the city, regardless ofthe size of the employer, and to all employees-....
part-time, fitll-time, and even temporary workers, The effective start date of the legislation was June 6,
2007. Additional details of the PSLO are explained in box 2.
The ordinance provided sick leave
to
an estimated 115,800 a.dditional private-sector workers in San Fran­
cisco. These workers were eligible by the law's provisions but previously lacked access
to
any paid sick days.
Overall, an estimated one-quarter of the city's private-sector workforce gained paid sick leave through the
ordinance (Lovell 2006).
Two additional employer mandates implemented around the sanle time as the paid sick leave ordinance,,-..
a minimum wage increase (to $9.36, a rate $3.51 higher than the federal mjnimum wage, and $1.36 higher
than the state minimum wage, at the time the site visit was conducted) and a health insurance expendi­
ture requirement·,,---shaped employers' perspectives on San Francisco's business climate.
It
is important
BOX
2.
San Hnncisco Paid Sick Leave Ordinance
EMPLUYERS' PFRSPECTJVES ON S/\.N FHANCJS(:Cl'S PAJD SICK
LEAVE
POLlCY
3
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to consider the effects ofthese additional mandates in interpreting the study findings. Box 3 describes these
addirional.labor standards in San Francisco.
About This Study
Despite the body of research outlining the benefits of paid sick leave as well as research on employer and
employment effects of benefit mandates more generally, none of the research to date has examined the
experiences ofemployers implementing the new Jaw. Given that San Francisco has passed the nation's first
paid sick leave mandate, the results of this study should help other states and localities as they consider
enacting this type of law.
To
that end, we examined how the new paid sick leave law affected 26 employers during the initial imple­
mentation period. The study focused on how the law affected their costs, staffing, and overall operations;
wherher it caused them
to
alter wages or other
beneflt~
provided, or the costs of their services or produCi$;
and whether it had noticeably affected employee retention or morale. Interviews were conducted in March
2008, approximately nine months after the law became effective.
In selecting employers
to
include in the study, we focused on those that had changed their personnel poli­
cies
to
comply with the ordinance. We sought to include a wide range of employers with at least some low­
wage workers (paying
$15
an hour or less). Participants were identified via employer associations and
groups, nonprofit organizations, Internet searches, and discussions with local experts.
The study team conducted 20 in-person or telephone interviews and held
t\'I0
focus groups with 6
addi~
tional employers. Respondents were business owners, human resources managers, or public policy direc-
BOX
3.
Additional Califimlia and
5tln
Francisco Eml'loyft Mandates
4
EMPLOYFJt') PFHSPECTIVFS ON
SAN
FHANCrS(\)'S
SlCf< I.EA\T
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tors, or they were employed in a similar role and able to represent their firms' personnel policies. The
employers included in the study represented different business sizes, from an employer with one part­
time employee to a national company with 10,000 employees in San Francisco alone. We identified small
businesses
as
those with
25
or fewer employees, medium businesses as those with
26
to
99
employees,
and large businesses as those with more than 100 employees. The sample included a range
of
industries
as
well. The sectors represented were chosen to reflect the industries
in
San Francisco that employed high
percentages of low-wage workers: the restaurant, retail, service, and health/human ,services industries.
Table
1
breaks down the employers by
size
and industl'y.
This subset of the business community was chosen to highlight the operational experiences of those
. affected by the paid sick leave ordinance. The sample is not representative of San Francisco employers as
a whole or of all employers that changed personnel policies to meet the requirements of the ordinance.
This study also does not address the benefits or effects of the ordinance on workers themselves.
Employer Strategies for Implementing Paid Sick Leave
Employers in the study sample implemented the paid sick leave ordinance in various ways, from creating
entirely new policies
to
tinkering with specific facets ofprevious policies in order
to
comply with the new
requirements. The changes in their policies can be summarized into four broad categories:
(1)
expanding
leave for all or some employees,
(2)
establishing a paid time off
(PTO)
policy,
(3)
replacing other bene­
fits and compensation policies, and
(4)
changing accrual rates and probationary periods.
These strategies are not mutually exclusive, and a sing.le employer can fall under more than one category.
For example, an employer could change its policy from covering some
employee.~
to covering all workers,
as
well as change the probation period before new employees begin accruing sick time.
Expanding Leave for Allor Some Employees
Four interviewed employers offered no paid sick or vacation leave to theif employees before the law was
passed and subsequently implemented a new paid sick leave policy and developed a new tracking
system. These employers had allowed their workers
to
take sick leave. but it was unpaid and had limi­
tations. One employer, the owner of a medium-sized festaurant. had in the past occasionally granted
paid
sick
leave to workers informally and case by case, depending on the worker's circumstances.
Several, particularly small business owners operated
with
more informal policies on leave before
PSLO
was passed, so meeting the rC{luiremcm,s of the new law required them
to
formalize
their
policies.
As
one small business owner said, "Before, it was a courtesy-if someone wants to take a day off, I
7;4BLE 1. l:.lnploym
by
Industry and Size
EtvfPLOYERS' PERSPEC'j'JVES
SAt...) FRANClSC(YS P/\.lD SICK LEIWE ['CHle:Y
5
@
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wouldn't dock their pay-you have
to
consider whether you want to be a strict boss or be more infor­
mal, like a family."
Ten employers expanded their sick leave policies to some workers who had not been covered by former
policies, resulting in increased time
otT
for more workers at the business. In most of these cases. sick I.eave
had only been available
to
full-time employees; the ordinance thus opened these companies' policies to
part-time employees. In one small business, the employer had offered paid leave only to her two salaried,
managerial employees; she began offering paid leave
to
her hourly employees as well
to
comply with the
regulations. A large financial services company expanded its paid time off policy
to
previously ineligible
on-call workers.
Establishing a
Paid
Time
Off
Policy
About one-quarter (seven) of the employers in the study enacted a paid time off
~ystem
encompassing both
sick and vacation leave
to
implement the paid sick leave ordinance, combining rather than separately track­
ing vacation and sick time accrual and use. Whether employees gained more paid days off depended on
the employers' policies before the ordinance. For example, several employers went from granting some or
none of their employees any paid vacation or sick leave
to
using PTO, thus increasing the overall amount
of paid leave. Others reclassified what had previously been only vacation leave
to
encompass the sick leave
requirement without providing any additional time off.
Employers switched to PTO for a range of reasons, Some employers believed PTO would be easier
to
track than separately calculating vacation and sick leave accruals, and thus
~witched
out of convenience.
Others didn't want to "police" their employees to ensure sick leave would be used for legitimate illnesses
in employees' families. \Vith PTO. the employee did not need to provide an explanation for taking the
rime off. For example, one dry deaner changed what was a vacation policy to PTO
to
avoid the paper­
work [hat would have been necessary for allowing workers to care tor a "designated person" as specified
by the city's regulations.
Several other employers were motivated to use a PTO system because they believed it would reduce
unscheduled absences. For example, one small service-sector employee had a "historically bad pattern" of
employees calling in sick on weekends and holidays even though she had not previously granted most of
her employees any paid leave. She decided to implement a PTO policy because she preferred for her staff
to give advance notice when the), wanted time offand
to
pay for the leave rather than deal with the chal­
lenges of finding coverage for staff who called in at the last minute. Another employer, an owner of a
medium-sized restaurant, described the switch to a PTO system as a way of providing a "disincentive" for
workers to call in sick, as he assumes his workers prefer to save their paid leave tor vacation.
Replacing Other Benefits and/or Compensation with Sick Leave
Ten employers adjusted alternate aspects of their personnel policy to compensate for providing sick
leave. Common approaches included eliminating vacation time or other benefits or decreasing pay
raises or bonuses. For these firms, implementing the paid sick leave ordinance led them
to
trade off
previous benefits.
Three employers reclassified vacation time as sick leave to meet the new requirements, Sometimes the paid
sick leave ordinance was more generous than the employers' previous policies and provided more paid
6
Fl'v1PL(JYERS
r'ERSPEC'TIVFS
()N SAN Flt\NClS(CfS PAID
SICKU:AVE POLICY
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time off. This differs from PTO in that employees are typically not permitted to use their sick leave for
non-health or caring purposes.
Interestingly, all three employers who replaced vacation time with sick leave were in the restaurant indus­
try: two owned multiple
re,~taurants
or locations of the same restaurant and were classified as large employ­
ers, and one was a small restaurant. These employers explained that they could not afford to give their
workers both forms of leave.
Three other employers eliminated or decreased benefits that they had supplied, such as end-of-year bonuses.
Two small employers reported that they paid for sick leave with funds that had been allocated as bonus pay­
ments because no other funds coming into the
bu~iness
could be used
to
cover leave. Another medium­
sized retail employer used
to
give her employees their unused sick le,ave at the end of the year as a
time-and-a-half pay bonus; now, because paid sick leave can carryover
to
the next year, she does not pro­
vide the benefit as a bonus.
Three small retail and two restaurant employers felt they could no longer afford to maintain previous
rates of incentive-based wage growth. One explained that as paid sick leave added another component
to labor costs and each employee's net pay, he does not promote employees or provide wage raises as
quickly as he otherwise would. In his words, "If you're at $10, you're going to stay there that much
longer to make up for [the additional expense]." Anorher employer reported that he had frozen wage
growth because of the ordinance, locking in wages at their pre-ordinance level rather than stepping
them up over time.
Changing Accrual Rates and Probationary Periods
Most employers in our study granted at least some of their employees some form of paid leave before the
ordinance's passage, but they were required to change their policies
fO
comply with the new regulations.
Most commonly (as reported by
II
employers), they increased the rate at which sick leave or PTO accrues
or shortened the probationary period before which new employees begin accruing leave.
Under the new law, employees accrue one hour of paid sick leave for every 30 hours worked. Eight inter­
viewed employers who previoudy provided sick leave had a different formula for accrual (i.e., 1 hour for
every 40 hours worked, etc.) or based the calculation on an alternative time unit such as calendar date rather
than gradual, hourly accrual
(i.e.,
six hours a month, eight days a year, one week a year, etc.). The employ­
ees working for these employers had a net gain in amount of paid leave they had access
to
per year.
According
to
the San Francisco ordinance, for employees hired after the implementation date., sick leave
accrual begins after 90 calendar days. Nine employers in our sample had
to
change previous probationary
policies to meet this regulation, resulting in newer employers having access to paid sick leave sooner than
they would have had under prior policies. For example, accrual for paid sick leave for one large human
services employer pre-implementation began after an employee had wotked a total of 1,000 hours, which
is significantly longer than 90 days, especially for a part-rime employee.
Employer Experiences Implementing the Paid Sick leave Ordinance
Several findings regarding employers' experiences with the paid sick leave ordinance and issues they faced
in implementing the new law were identified through our interviews.
PAID SICK LEAVE
PCn]!:Y
7
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By and large, most employers were able
to
implement the paid sick leave ordinance with minimal to
moderate effects on their overall business and their bottom line.
Most respondents in our sample expe­
rienced some increased labor costs because of PSLO, either from expanding existing policy to cover all
employees or increasing benefits. A few also noted additional minor costs in terms of accou11ling or track­
ing systems used to help monitor leave accrued and taken by their employees. Most employers reported
they were able to absorb the cost of providing paid sick leave. Reasons for the minimal impact varied but
included being a smaller employer with few employees affected by the law or adjusting only slightly the
total number of paid days off (through substituting sick days
tl.)f
vacation days or making relatively minor
adjustments
to
accrual rates or probationary periods).
As
noted above, the paid sick leave ordinance was implemented at the same time t\vo other employer man­
dates, a minimum wage increase and a health insurance mandate, were enacted. Many employers were
focused on the "package" ofthese new requirements and what they meam for their business. Most employ­
ers were quick
to
say that of the three, the PSLO was the least costly
to
their bottom line. However, in a
city where labor
COSt
increases were piling up, the PSLO did not help.
As
one dry cleaning store owner said,
'The paid sick leave, taken by itself, is not a big deal. But you gec a triple whammy when you add that
to
the minimum wage increases and the health insurance."
About halfof the employers interviewed t.ried to offset or minimize their recent increased labor costs.
Ten employers in our study reported that they passed on the costs of the PSLO to their workers through
changes in other benefits or delayed wage increases
to
help defray costs. Because of (he minimum wage
requirement, employers were largely unable
to
significantly reduce wage rates. However, some delayed or
cancelled planned wage increases for staff as a result ofincreased labor costs in general and the PSLO
specif~
ically. Some employers changed other benefit levels
to
help defray costs, such as eliminating
end-of~year
payouts for unused sick days or cancelling a planned extra week of vacation. Seven employers raised the
prices or rates charged
to
their customers, but all noted that
these
increases were motivated by the impact
of the three employer mandate.., and other economic conditions on their business, not just the paid sick
leave ordinance. Rate increases were seen in restaurants, retail, and health care.
Among the businesses included in our study, small or medium-sized employers were more affected
by the paid sick leave law than larger employers.
Most medium··sized employers we interviewed had
to expand benefits to a significant portion of their workforce, and their ahility
to
both absorb the labor
cost i.ncreases and
to
administer and track the leave was significantly affected. According to manyown­
ers, profit margins were tight, and the increased labor costs ftX}uired companies to look for ways ofdecreas­
ing costs in other areas of their business. Additionally, several companies lacked sophisticated payroll
systems and therefore had trouble meeting the tracking requirements of the law. In our sample of busi­
nesses, small employers did not
~ppear
to be as significantly affected by the law in terms of increased labor
costs because some usually provided some type of paid sick leave informally, However, some small busi­
nesses eliminated vacation or bonuses to reduce costs, and several had difficulties implementing a track­
ingsystem.
Larger employers, on the other hand, seemed better able to handle the tracking requiremems of the law
and
to
absorb the new labor costs into their business, Most had human resources departments and more
formalized policies in place for signific.ant portions of their workforce before PSLO. Many large employ­
ers had to expand theif policies to additional workers, usually part-time or temporary workers. \X'hile this
expansion was sometimes substamia.l.-for example, one national retailer had
to
start providing paid sick
8
FRAN(:rsCCYS PAID SlCJ< LEAVE
POLICY
@
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leave benefits
to
almost a quarter of its San Francisco workforce, all ofwhom worked part time-the over­
all increase to the business's labor costs were small because the firm was very large.
Some industries faced more challenges with providing paid sick leave than others.
In general, restau­
rants were more likely than other industries to respond
to
the increased labor costs, with many enacting
some type of
COSt
saving measure. Again, however, most restauram owners said that these cost-cutting mea­
sures often were not related to PSLO itself but a combination of the PSLO and an increase in the mini­
mum wage. Restauram owners noted in particular that, unlike the federal minimum wage, San Francisco's
minimum wage did not allow for a tip allowance, or a decre.ased minimum wage for workers who receive
tips. Paying this wage rate while .staying competitive with restaurants outside the city and keeping prices
"affordable" was a challenge.
Even within this Indusny, restaurants responded in different ways to reduce their labor costs. Some own­
ers tightened shifts and schedules so they did not have to hire so many part-time employees. Others shifted
part-time workers
to
full-time positions, mostly through attrition bur occasionally by letting staff go and
replacing them with full-time workers. Other restaurants round additional ways
to
cut labor needs. One
local restaurant chain with facilities outside the dty decided
to
have all its vegetables and fruit prepared and
chopped in a nearby city and have the food driven to its San Francisco restaurants to reduce the anlOunt of
San Francisco-employee time preparing food. Another owner staned purchasing precut pork chops and
preprepared vegetables to reduce his need for "back of the house" workers.
Some restaurant owners stressed that the increased labor costs hit tlle medium-sized restaurants-those that
require a large number of wait-staff-the hardest. As one restaurant owner said, "The fine dining places
are being driven out. Now, the only way
to
stay in business here is
to
open pizzerias, sandwich shops, taque­
rias ... ollt-the-door restaurants, with fewer than 15 staff. But these types of restaurants don't provide as
many jobs, and it cuts into our reputation as a food destination."
Other industries also faced challenges. The health care industry employs on-call staff, many of whom work
interm ittently. Providing on-call staff pajd sick leave is difficult, given that they are only called when needed
and often are not guaranteed a certain number ofhours each week or even each month. The wages of these
workers, according to one health care employer, are typically higher given the nature of these positions
(often at rates negotiated through a collective bargaining agreement), so adding a benefit onto this cate­
gory of employee affects the employer's bottom line.
Similarly, a nonmedical home care agency expressed concerns about its "at-will" employees. When the
agency hires a caregiver, rhe employee agrees
to
take
all
a particular assignmem, and he or she is expected
to stay with that dient until rhe client no longer requires the employee's services. \Vhile the interviewed
agencies allowed their workers to take unpaid leave before the ordinance
to
attend
to
their own or their
families' health needs, the employers were not able to guarantee caregivers their assignment upon their
rerum. Caregivers thus risked losing their jobs when taking rime ofE if'a client preferred a particular care­
giver's replacement, the client could switch caregivers. In addition, as employees' hours were based on indi­
vidual clients' discretion and could be unpredictable, and as the work rook place in cliems' homes, the
employer faced challenges in implementing and tracking paid sick leave accrual.
Many businesses would prefer state or national employer mandates rather than a city mandate.
For many employers, the fact that their competitors just over the city line were not subject
to
the city's
minimum wage, health insurance, or paid sick leave requirements made the cost of staying competitive
EMPLOYLRS'
PERSPECTIVES
(iN
PAlO SI.CK
LEAVE
POLley
9
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difficult. While six employers noted that they might consider relocating outside San Francisco in the future,
most reported that they did not have much ofan option. given that their business relied on either local res­
idents (such as dry cleaners or pet care) or tourists (for restaurants and hotels) drawn
to
San Francisco.
Given these realities, most employers explained that if the government was going
to
pass paid sick leave
mandates,
it
should be the state or national government. This was true regardless of the employer's personal
opinion of the law. For example one small employer said, "Philosophically, [PSLO] is a good thing. I just
wish it were more spread out-and that all businesses had
to
comply-that way it would Jevel the playing
field, so that we are not at a competitive disadvantage." Another, who did not support the law, noted, "If
evelyone in the state
was
doing
it,
then okay. Who cares if taxes go up? Ifeveryone else is paying, who cares?"
One hardware company owner suggested that the
city
could help San Francisco employers by giving them
preference in their contracting and bidding processes. "Right now, I'm competing against companies out­
side ofSan Francisco who don't have
to
comply with these city mandates. So, to win the city contract, you
either make less or you lose the bid because these other companies have lower costs. The dty should take
the lead on business-friendly legislation to offer San Francisco businesses preference in bidding for city con­
tracts. It would make a statement from the city that they're asking a tremendous amount from the busi­
nesses here, but that the city wants to help them however it can."
Larger employers did not worry as much about competitive disadvantages. since their operations and larger
business decisions were not typically driven by policy changes in San Francisco. But, tor different reasons,
larger employers also said they would prefer a state or national law, if paid sick leave was going to be an
increasingly common requirement. These respondents were primarily concerned ahout administering dif­
ferent policies for employees in different cities and, for national companies, in different states. For these
larger national employers, mandates requiring nine days of paid sick leave in San Francisco, seven
days
in
Dayton, and five days in Washington would be difficult for human resource administrators. As one com­
pany representative noted,
"It
is a mess to try to have specific rules for each
city.
We don't want a patch­
work solution and want
to
see laws at the federalleve1, whether we like the laws or not. A patchwork just
causes confusion on top of administrative burdens."
Few employers l'eported any early benefits from reduced absenteeism, lower turnovel', or improved
employee morale
a.~
a result of the paid sick leave ordinance. Employers noted that turnover and
retention seem less relevant to a mandated benefit, since now the same sick leave benefits are available
across companies.
As
one small business owner observed, "The policies I had in place before were there
to
reduce turnover and get better employees-and they did have an eftect. But now, since the new ordi­
nance, employees will have the same benefit no matter ",,:here they work. There's less of an incentive to
stay and work for me."
Some employers reported that the law limits their ahility to reward full-time or longer-tenure workers with
higher benefits than part-time or new workers.
As
one small business owner said "Now my part-time
employees are getting to be equal
to
my full-timers, those full-timers are upset that they're getting the
sanle benefits-they fed mistreated. There needs to be some distinction for those that work full time
and have been working for me for a while, But, I don't have the ability to add additional benefits to full­
rimers because all of my fixed cOSts are up."
I~olicymakers
need to engage employers to inform the details of a paid sick leave law. Employers
stressed the need for employers
to
be at the table carlyon when crafting a paid sick leave policy. Accord­
10
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ing to many employers in our srudy, the development of San Francisco's policy did not include the
employer perspective on critical issues, making implememation more difficult. As one employer noted,
"When I have a problem, 1 go to the people who are going to be affected and ask their opinion. Here is a
problem where they want to find a solution, and the stakeholders who should have been tapped weren't.
No matter how you slice
it,
it is a cost, so business will still be against it-but HR
folk~
and other busi­
nesses could have at least weighed in on how to get it right." Many employers noted that, from their per­
spective, the process seemed to have assumed an adversarial relationship between employers and
employees. Employers stressed that this is not necessarily true and that involving employers in the con­
versation and viewing them as partners in crafting the policy would have been a better route
to
finding a
mutually agreeable policy.
Employers noted an important area for theic input was setting the sick leave accrual rates. Many noted that
San Francisco's accrual rate ofone hour ofsick leave for every 30 hours worked ,vas awbvard to implement.
Most human resource systems already account foc benefits in increments of20 or 40 hours, so the 30-hour
accrual required additional calculations for most employers. In addition, the way the law was written, the
sick leave caps at nine days a year (or five days for small businesses). But the cap is a rolling cap, so if an
employee earns nine days in year one, then takes all nine days early in year two (say. in January), the
employee can still accrue more sick leave time in year two and, theoretically, take more leave later in the
year. The rolling cap is difficult to administer foc many employers and runs counter to the
way
many busi­
nesses accrue and provide other benefits to their employees.
Employers also noted chat a city or state should provide additional stafHng and resources
[0
the adminis­
tering agenc'y to help implement a PSLO, particularly technical assistance for employers to help them get
their PSL systems up and running. Most employers, as ,';'ell as city officials we spoke with, agreed that the
adminiscering agency lacked the staff and cesources
to
meec the law's requirements and help employers
implement tbe policy on rime. In fact, the timeline fi.Jr impl.ementation was delayed by 120 days during
which employees were able to accrue paid sick leave but employers were not required
to
pay for any sick
time used. This transition period was created to give city officials and employers extra time to make the
program operational and address implementation issues. Some major considerations worked out at this
time included addressing exempt employees, further defining employers' "reasonable requests" for notice,
and parameters for leave taking.
In addition to implementation, ongoing education and enforcement efforts are needed. Regulatory laws
are only as good as the enforcement efforts that back them up. Yet,
dry
oHicials and employers both noted
the chaHenge of educa.ting employers and employees about the benefit and ensuring compliance for the
estimated 106,000 registered businesses in the city.2 At the time of our interviews, officials were planning
an employer education campaign
to
help tell people about the law and answer questions.
1\5
one small busi­
ness owner said, "Many employers stilt don't know about this law. The city scnt two fliers, and most peo­
ple throw those oue. They need some sort of acknowledgment from employers that they've read the law
and have implemented it."
Enforcing PSLO is primarily driven by employer or employee complaints, which, employers and officials
note, leaves the burden largely on employees to identifY employers that refuse to comply with the law. In
the words of one employer, "We keep passing more Jaws, and there's no enr()fcement. For the bad employ­
ers, employees will keep \vorking quietly and not complain if
[hey
want
to
keep their jobs, and there's not
an effort
to
go find the sweatshops in the city-the city doesn't have enough people to enforce labor laws
in those places-this law won't be enforced eitber." \X-'hen violations are reported and confirmed in San
EfvlPLOYERS' PERSPECIIVES
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PAID SiCK LEAVE POIJ(:Y
11
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Francisco, noncompliance penalties are limited to the dollar amount of the paid sick leave withheld from
the employee multiplied by three or $250, whichever is greater. If the violation resulted in other harm
to
the employee, including discharge from employment, then employers may face an additional charge of$50
for each employee harmed, accumulated for each day that the violation occurred or continued. Thinking
through these implementation issues before a law goes into effect would go a long way in casing employ­
ers' challenges in complying with the new legislation and ensuring that employers implemem the law as
intended.
Summary
This study of employer perspectives on implementing mandated paid sick leave in San Francisco provides
useful insights for policymakers, advocates, and the business community
to
consider as these policies are
debated. According to our study, most employers were able to implement this mandate with minimal
impacts on their business in the first year. However, San Francisco's experience suggests that
it
is critical
to
consider the policy environment aflecting employers, such as health insurance or other mandates, when
debating the addition of new labor costs.
This study also finds that not all businesses respond the same way when addressing these increased labor
costs, with some aflected more than others. Considering the law's dfects on employers ofdifferent sizes and
across difterent industries is critical to understanding the larger business and employment effects of a paid
sick leave mandate. Further, policymakers should consider specific implemelUation challenges and eco­
nomic effects that result when mandated paid sick leave is established locally, rather than statewide or
nationally. Finally, ensuring that the
bu.~iness
community is engaged in the design of these policies at the
outset would help ensure
that
a paid sick leave law is implemented smoothly and that unintended conse­
quences are avoided or minimized.
12
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NOTES
1. In this report, paid sick leave refers ro rhe limited number of d.r)rs ofF an employer provides employees for a.n illness or ill
family member.
Longer
leaves
can
also
be
paid
in
Calitornia as part
of
the state's
Paid
Family Leave
lmurance
program.
2. San Francisco Planning and Urban Research Association, "Ballot Analysis November 2007: A
Comprehc115ive
Guide
to
San .Francisc.o's Ballot Measures," http://WI'\w.spur.otgldocumellts/l107_.ballof__analysis.shrm.
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ust
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Goetze!, Ron Z., Stacey R. Long, Ronald
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Lovell, Vicky. 2004.
No Time to Be Sick: W1ry
EiJl:ryolle
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Sick
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Valuing Good
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San
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PmptJsed Paid
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Lovell, Vicky, and Kevin l'vfiller. 2008. "Job Growth Strong with Paid Sick Days." Washington, DC: Institute
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Women's
Phillips, Bruce D. 200Sa.
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DC: National Federation of Indt.t>endenr Business Research Foundation.
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Mdnduted Sick Leal'e.
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16
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ABOUT THE AUTHORS
Shelley Waters Boots
is a senior research associate in the Urban Institute's Center on Labor, Human
Sen.rices, and Population. Her research focuses on understanding the intersection of work, family, and
children's dt.'VeJopmcnt and well-being. She is particularly interested in how employers and public policy
supports atlect the lives of working families. She also brings expertise on policy and communications
issues, working to link solid research
to
current policy debates.
Karin Martinson
is a senior research associate in the Urban Institute's Center on Labor, Human Services,
and Population. Her research interests include welfare reform, employment and training programs,
service delivery systems, and work supports. She has worked on numerous program L'Valuations in these
areas. with a focus on implementation studies of programs and services for low-income filluiJies.
Anna Danziger
is a research associate in the Urban Institute's Center on Labor, Human Services. and
Population. Her research focuses
011
issues and policies that affect working families, particularly child
care and workplace flexibility.
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HB385
Department of Legislative Services
Maryland General Assembly
2015 Session
FISCAL AND POLICY NOTE
House Bill 385
Economic Matters
(Delegate Clippinger,
et
at.)
Labor and Employment - Maryland Healthy Working Families Act
This bill requires an employer with more than nine employees to have a sick and safe
leave policy under which an employee of the employer earns at least 1 hour of
paid
sick
and safe leave, at the same rate and with the same benefits as the employee normally
earns, for every 30 hours an employee works. An employer with nine or fewer
employees, based on the average monthly number of employees during the preceding
year, must have a sick and safe leave policy that provides an employee with at
least 1 hour of
unpaid
sick and safe leave for every 30 hours an employee works.
An employer is not required to allow an employee to earn or carry over more than
56 hours of earned sick and safe leave in a year or use more than 80 hours of earned sick
and safe leave in a year.
Earned sick and safe leave begins to accrue the later of October 1, 2015, or the date that
an employee begins employment with the employer.
Fiscal Summary
State Effect:
Expenditures increase (all funds) significantly due to contractual
employees throughout State government receiving earned sick and safe leave. General
fund expenditures increase by $272,100 in FY 2016 due to additional staffing needs for
the Department of Labor, Licensing, and Regulation (DLLR) to enforce the bill and
conduct the required outreach program. Out-year expenditures reflect annualization,
elimination of contractual staff and one-time start-up costs, and inflation. General fund
revenues increase minimally as a result of the bill's monetary penalty provision from
cases heard in the District Court.
(in dollars)
GF Revenue
GF Expenditure
GF/SFIFF
Exp.
Net Effect
Note:()
FY 2016
$272,100
($272,100)
FY 2017