Sunday, August 17, 2008

Sick Pay To Remain A Benefit, Not Entitlement---For Now

Is sick pay an employee entitlement or a benefit? In California, a bill seeking to make sick pay an entitlement that all employers must provide has died in the Senate. But it will be back.

For details on the provisions of AB 2716, see our May 2008 summary here.

The bill died in the Senate because of budget constraints, noted Dean Calbreath, a San Diego Union Tribune columnist in a recent article. “The Schwarzenegger administration opposed the bill on the grounds that it would add costs to the state budget. The Department of Finance estimated that paying for the sick leave would add $600,000 to the budget, because the state would have to pay for sick leave for nurses who provide health care to elderly, blind and disabled patients in their homes.”

The cost to private employers would be much more. Although many employers offer sick pay as a benefit, most employers bristle at the thought of a state mandate requiring such pay. In a letter to the California Senate Appropriations Committee, the Cal Chamber of commerce wrote: “The ever-increasing burden of costly mandates on employers can cumulatively result in lower wages, reducing available health insurance, limiting training programs and - in the worst case scenario- job loss or reduced work hours. Job loss translates to lower tax revenues from employers and employees, as well as increased utilization of Unemployment Insurance. In an already troubled economy California should be seeking ways to stimulate job growth and avoid forcing costly mandates on employers.”

Supporters of the bill came up with all manner of public policy arguments. The pro-labor group Labor Project for Working Families argued in a fact sheet that employers should support the sick pay mandate because it would decrease employee turnover, increase productivity, and improve public health. 

The public health argument appeared to strike a chord with voters. The argument is that sick workers make more people sick. Korye Capozza, of the UC Berkeley Center for Labor Research and Education hypothesized in a policy brief that mandatory sick pay would improve decrease food poisoning and save the elderly. “AB 2716 would have clear benefits for individual workers but, importantly, it would also have public health benefits that extend beyond the household and workplace” wrote Capozza. “Specifically, such a policy could reduce the transmission of foodborne illness, decrease disease outbreaks in nursing homes, reduce the spread of infections in childcare settings and mitigate the transmission of seasonal influenza. There is also some evidence that paid sick leave influences workers’ decisions to see a doctor, parents’ decisions to stay home and care for a sick child and patients’ decisions about treatment choices. Finally, AB 2716 has the potential to improve patient compliance with preventive health-care guidelines and chronic care management, and thus to reduce health-care spending over the long term.”

Mandatory sick pay will be back. Assemblywoman Ma has vowed to reintroduce the bill next year. It is likely to gain public support. The California Center for Research on Women and Families, a program of the nonprofit Public Health Institute, publicized a public poll finding 73% of voters would support a law to guarantee that workers receive a minimum number of paid sick days from their employer.

Similarly, the poll found that 81% agree (57% strongly) that guaranteeing paid sick day laws to all restaurant workers who handle food would increase the chances that these workers would stay home when they get sick and not infect the public. Another 76% agree (50% strongly) that paid sick days should be considered a basic worker right, like being paid a decent wage.

The text to the most recent version of the bill can be found here.

Submitted By:
Christopher W. Olmsted
Barker Olmsted & Barnier APLC