Article published August 20, 2008
Business group tallies sick-leave plan's costs
Study warns of job losses, $1.7B in employer expenses
By JIM PROVANCE
BLADE COLUMBUS BUREAU CHIEF
COLUMBUS - Ohio's weakening economy could shed 75,000 more jobs and employers could end up paying $1.7 billion more a year if voters choose to mandate up to seven paid days of sick leave for most workers on Nov. 4, a business-backed study predicted yesterday.
The study, funded by the Ohio chapter of the National Federation of Independent Business, predicted that many of those losses will occur in small businesses otherwise exempt from the mandate because of a trickle-down effect caused by cutbacks made by larger businesses that use their products or services.
"It's a very serious consequence imposing mandates on a state whose unemployment rate is already significantly above average …," said Bruce D. Phillips, an NFIB researcher who conducted a similar study for California when its legislature considered and then rejected a sick-leave proposal.
"Frankly, through surveys that NFIB has taken over the years, 98 percent of employees who need time off get it … so we don't need this mandate," he said. He estimated that about half of the 98 percent get paid time off.
| PROPOSED HEALTHY FAMILIES ACT: |
• Requires employers with at least 25 workers to allow employees working 30 or more hours a week to earn up to seven days of paid sick time with part-timers earning a pro-rated share.
• Allows employees to use sick days to care for their own illnesses or injuries, keep doctor appointments, or care for an ill child, spouse, parent, or parent-in-law.
• Allows unused sick days to be carried over to the next year, but employers would not be mandated to provide more than seven days of leave a year.
• Allows employers to demand a doctor’s excuse only after an employee has missed three consecutive days of work.
• Encourages but does not require employees to give as much advance notice to their bosses as possible.
• States that employers “may” not reduce more generous benefit packages to match the new seven-day minimum.
• Permits damages to be assessed against an employer for a violation in an amount equal to as much as triple the affected employee’s lost wages, compensation, or expenses. |
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The proposed Healthy Families Act has been promoted by labor unions, the Ohio Democratic Party, churches, and health organizations. A coalition of those groups is waiting to hear whether petitions filed two weeks ago have qualified the proposal for the Nov. 4 ballot. If the Healthy Families Act becomes law, Ohio would be the first state with such a mandate.
The proposal would require employers with 25 or more employees to allow workers to earn up to seven paid days of sick leave each year to care for themselves, their children, their spouses, their parents, or in-laws. Part-time workers putting in fewer than 30 hours a week would receive a pro-rated share of paid leave.The proposed law would prohibit employers from reducing existing, more generous paid leave benefits to match the new minimum.
Gov. Ted Strickland's attempts to broker a compromise between his political base and the business community in hopes of keeping the issue off the ballot have failed.
The business community has steadfastly refused to accept any mandated paid sick leave while the ballot issue's backers have been buoyed by early polls showing the concept is popular with voters.
Dale Butland, spokesman for the Ohioans for Healthy Families coalition, questioned the NFIB's internal study, noting it assumed a worst-case scenario that every eligible employee would use all seven days every year. He noted the U.S. Bureau of Labor Statistics has shown that 54 percent of those with paid sick leave now don't use a single day in an average year.
"The conclusion flatly contradicts two independent studies that have been done, one by Policy Matters of Ohio [in Cleveland] and the Institute for Women's Policy Research [in Washington]," he said. "Both studies found that employers would save money.
"They looked at things this study did not," he said. "They looked at less lost productivity because sick workers tend to be less productive than healthy workers, and because there would be less spread illness in the workplace, faster recuperation times, and improved retention of skilled employees."
Lawrence Schmidt, operator of the third-generation Schmidt Brothers, Inc. Greenhouse family business in Swanton, said he is worried about the ballot issue because 60 percent of the greenhouse's business is out of state. "If our business isn't competitive, we're not going to do business in other states," he said.
His business employs about 27 full-time workers with as many as 60 seasonal workers during peak times. The greenhouse provides no paid sick leave, but does offer paid vacation time that a sick employee could take instead.
Despite the greenhouse's proximity to Michigan, Mr. Schmidt said its size makes moving out of state unlikely.
Contact Jim Provance at:
jprovance@theblade.com
or 614-221-0496.
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