New Jersey lawmakers are considering whether to pass Senate Bill 785, which would impose a paid, protected sick leave requirement on all employers. Unions and labor groups are for it, while business organizations oppose it.
An advocacy group called Working Families United for New Jersey, which is partnered with union groups around the state, says paid sick leave would benefit employees, businesses, and the community. Below is an excerpt from the group’s position paper:
How Earned Sick Days Benefits All of Us. According to an October, 2013, Rutgers study, an overwhelming majority (83 percent) of state residents — of all political affiliations — support paid sick day policies. And there is good reason for this high level of broad support.
Worker Benefits: There are approximately 1.2 million workers (37 percent) in New Jersey who do not have access to earned sick days. As a result, when these workers get sick, they are forced to make the unfair choice between a paycheck and tending to their health.
An earned sick days law would ensure that all workers in New Jersey can earn a limited amount of paid time-off to be used if they or a family member get sick.
Often times workers without access to earned sick days are also the ones least able to afford staying home without pay. The wages which these workers lose because they lack earned sick days can easily add up to a month’s worth of groceries every year.
Earned sick days is a policy that makes sense for all workers, not just the vast majority of workers who already receive this common sense benefit.
Twenty-three percent of adult workers have been threatened with termination or fired for taking time off when they or a family member get sick (source: Center for American Progress). This would not have to be the case if all workers had access to earned sick days.
Earned sick days allows workers to take time off to care for themselves or a family member, and provides a simple and practical way to promote a healthy work-life balance.
Businesses Benefits. In Connecticut — the first state to enact an earned sick leave law — businesses attest to the fact that the policy has had virtually no effect on their bottom line.
Earned sick leave can provide many measurable benefits to businesses, such as higher employee morale, increased productivity, and reduced training costs due to greater employee retention.
When employees go to work sick they are not as productive, they are more prone to mistakes, and they can spread their illnesses to coworkers and customers, which can drive away business.
U.S. businesses lose about $160 billion a year due to reduced productivity from employees who come to work sick (source: Center for American Progress).
Nationally, about 75 percent of employers already provide their workers with earned sick days although they are not required to by law, according to the Bureau of Labor Statistics.
In Connecticut, 86 percent of employers reported no known cases of abuse of the state’s new earned sick leave law. Employees who used their paid sick days averaged about four days a year. A third of employees used no sick days at all (source: Center for Economic and Policy Research).
Community Benefits: Employees who lack earned sick days usually work in the retail, food service, and hospitality sectors, all of which involve close contact with the general public. When these workers can take a paid sick day, they are much less likely to spread their illness to customers or cause a highly unpleasant dining experience.
According to a Star-Ledger editorial, 79 percent of food workers — whose jobs require them to touch and hold the food you will eat — don’t get paid sick days.
The money workers lose from having to take unpaid sick days could have been used to help struggling families make ends meet and would be quickly be spent helping boost the local economy.
During these fiscally challenging times, it has been difficult to enact laws that work to the benefit of our state’s struggling families. Earned sick days is one of the few policies that will come with a zero-dollar price tag for taxpayers, respect the economic realities of our state, and still provide tangible benefits to the community.
On the other side, the New Jersey Business and Industry Association opposes the bill and says it would have negative effects on business. The NJBIA offers the following statement:
Unintended Consequences: Under the bill all employers will have to provide either five or nine protected paid days out of the office, depending on the size of their businesses. Employees would also be able to carry over unused leave from one year to the next — up to 40 hours for small companies (defined as fewer than 10 employees), and up to 72 hours for larger companies (defined as 10 employees and above). So, an employer who had 15 employees one year, but was forced to shrink the workforce to eight the next, would still have to provide nine days of paid protected leave despite the fact that the company has been struggling.
However, even if a business is not struggling, the legislation will still likely impact its solvency. In some cases employers are going to have to pay double wages — wages for the absent worker and wages for their replacement. Businesses set aside a specific amount of money for payroll based on what they anticipate in their sales and profits. If sales are not rising fast enough to accommodate payroll increases, employers may be forced to make tough personnel and operating decisions.
This is illustrated in a 2011 report focusing on San Francisco’s paid leave ordinance by the Institute for Women’s Policy Research. In the report, the Institute — while overall very supportive of the ordinance — noted that 15 percent of affected employers surveyed had layoffs or were forced to reduce hours as a result of the ordinance. Fourteen percent of employers also reported providing fewer raises, fewer bonuses, and having to reduce other benefits.
The evidence from other states, as well as the fact that employers now have to comply with the Affordable Care Act, and minimum wage increases, lead us to believe that when this legislation takes effect, it will have widespread repercussions.
Liability Issues: The bill contains wide-sweeping anti-retaliation provisions that will make it difficult for employers to distinguish between legitimate and illegitimate uses of sick leave, and to discipline employees where appropriate.
The bill provides that an employer cannot count paid sick leave as an absence that results in the employee being subject to discipline or any adverse action. The courts interpret the term “adverse action” in various ways. If an employee is moved off of a project because they simply haven’t been in the office enough to complete it, would this constitute an adverse action? Along the same lines, the definition of “retaliatory personnel action” includes “unfavorable reassignment.” Taking a subjective view, couldn’t any reassignment be unfavorable and subject to a lawsuit if an employee doesn’t like it?
Even if an allegation against an employer is without merit, the employer will still have to spend time and money defending against it. And, the bill contains a “rebuttable presumption” that an employer has done something illegal if any type of adverse action is taken within 90 days of an employee filing a complaint or informing “any person” (undefined) about his or her rights. Does this mean that an employer will now be guilty until proven innocent and will have to justify that his conduct was legitimate in a subsequent proceeding? If so, this provision would be a significant departure from discrimination lawsuits where the burden of proof resides with the employee.
Also of concern is that by imposing wage and hour penalties for violators, employers could face disorderly persons offenses over disputes about time off (in addition to paying monetary penalties, facing possible class actions, having to reinstate employees, and paying full wages). Of equal concern is that the bill provides that in civil proceedings “any actual damages suffered by the employee as a result of the violation plus an equal amount of liquidated damages may be awarded.” And, the bill provides no good faith defense against these penalties for first time violators.
In short, with its broad anti-retaliation provisions and other imposed penalties, we believe the bill has the potential to significantly increase liability and costs for employers.
Effect on Employers Already Offering Benefits: Under the bill employers who are already offering paid time off (PTO) would still be subject to more regulation, additional record-keeping requirements, and the need to revise their policies and procedures.
Employers have always had the ability to tailor their benefit plans to the needs of their workforce and to offer PTO as a recruiting and retention tool. This bill would take that ability away. It would essentially create a uniform benefit plan for “any individual engaged in service to a company,” including independent contractors, board of directors, etc. Under this plan, any individual compensated by an employer could begin to take leave as soon as they clocked in 30 hours and worked 90 days regardless of whether they are even an employee (as opposed to an independent contractor).
Creating such a system disregards employer policies for PTO eligibility, procedural requirements for requesting PTO, call-in procedures, and policies to control excessive absenteeism. The bill also does not address how the sick time may be taken. Must it be taken in full day, half-day, or hourly increments? In some cases an employer may allow employees to take time in hourly increments, whereas in other cases employees coming and going would cause a significant disruption. We believe that employers should explicitly have the ability to decide how PTO is awarded and used based on the unique needs of their workplaces.
Aside from those issues, the bill would require employers to keep confidential records of any sick time used by every employee for five years or risk being charged with failing to provide sick leave. While we believe this would be burdensome for all employers, it would be particularly difficult for large and multi-state employers with thousands of employees — the very companies our state continually tries to retain and attract.
Uses of Sick Time: The uses of sick leave included in the bill overlap and conflict with several existing leave laws.
In terms of overlap, the bill allows workers to take sick leave for the treatment and recovery of the employee’s own physical or mental illness, or that of a family member, both of which are acceptable uses of the New Jersey Family Leave Act (NJFLA) and/or the federal Family and Medical Leave Act (FMLA). The bill also provides leave for victims of domestic violence which is already covered by the recently enacted New Jersey Security and Financial Empowerment Act (NJ SAFE Act).
In terms of conflict, the list of individuals included in the definition of “family member” for whom an employee could take leave under the bill is far more expansive than other laws, especially since the bill allows individuals to arbitrarily designate someone for whom leave can be taken each year. Under the federal FMLA, an employee’s spouse, children, and parents are the only family members for which leave can be taken. Similarly, the NJ SAFE Act only includes children, parents, spouses, domestic partners, or civil union partners. Neither law includes “in-laws,” nor grandparents or grandchildren or covers “any one person designated by the employee.”
These issues pose several questions: would this leave run concurrently with other leave laws, or is it intended to be another benefit? And, if this bill is enacted, how will conflicts between the various laws get addressed particularly when other leave laws limit the definition of family member and specify that the leave will be unpaid?
Finding Replacements: The bill specifically prohibits requiring employees — who may have foreseeable notice that they will be absent — from finding their replacements. In some industries where shift work is involved, it’s standard practice for workers to try to find others to cover their shifts. For many employers it is also critical that one person take the responsibility for opening an office, leading/covering a meeting, leading a shift, or operating a piece of machinery. As this bill is written, however, an employee would face no repercussions for not making arrangements to ensure that their company’s operations were not affected by an absence.
Notification: The bill requires employers to provide notice of the availability of sick leave 30 days after the poster is issued; at the time of hiring; and any time the information is requested by the employee.
While it’s certainly important that employees understand their rights, it’s likewise important to remember that the average employer in New Jersey is already subject to more than 20 separate state and federal notice provisions. And, for some employers with government contracts, union contracts, veterans, or those in specialized fields (healthcare, real estate, etc.) that number could increase to over 30 separate notices. The result for employees is that it is often difficult to retain this information despite how valuable it is. The result for employers is often added administrative responsibilities that don’t necessarily result in their workers being informed.
Documentation: While the bill allows employers to ask for documentation to justify the use of sick leave, it also requires them to pay for any costs the employee incurs in obtaining it. This puts employers in a Catch 22. If they rightfully request documentation because they believe an abuse is occurring, regardless of whether it is or not, they’re still going to have to assume the costs of gas, tolls, etc.