Should California require small businesses to offer sick days?

Hundreds of small businesses in California say they can't afford to offer paid sick days to employees, but Assemblywoman Fiona Ma believes businesses actually could save money by doing so.

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Hundreds of small businesses in California say they can't afford to offer paid sick days to employees, but Assemblywoman Fiona Ma believes businesses actually could save money by doing so.

The San Francisco Democrat's Assembly Bill 2716 would let workers earn paid sick days that could be used to recover from illness, care for a sick relative or recover from domestic violence or sexual assault.

Small businesses and groups representing them vigorously oppose the bill, calling it another example of government trying to impose a financial burden on businesses already struggling to survive in a shaky economy.

The California Chamber of Commerce said the proposal would "unreasonably expand employers' costs and liability." Those cost increases could result in lower wages, reduced health insurance availability and reductions in worker-training programs, the chamber said.

Bill Reed, owner of Reed's Ribs and More in Sacramento, said he's sympathetic to workers getting ill, "but there's really nobody you can pick up to fill in. And you would have to pay that person to fill in. I only have three employees.

"And on top of that, I have workers' compensation (to pay), so, yeah, it would be tough."

To counter such arguments, Ma cited a new study by the Institute for Women's Policy Research in Washington, D.C. It contends that universal access to sick days would actually create cost savings.

"The study says businesses will save money, mostly by reducing turnover," Ma said.

The IWPR study projected that workers covered under Ma's proposal would use fewer than two sick days annually for their own medical needs, excluding maternity leave.

It also predicted that if the pending legislation became law, workers would use just one day of sick time per year for family care and doctor visits.

The study forecast an annual employer savings in California of $2.3 million from reduced employee turnover. In turn, workers and their families in the state would experience lower expenditures for health-care services, saving $7 million annually, according to the study.

Beyond fiscal reasons, Ma said she wants to protect workers who are punished for taking time off when they or their loved ones are sick.

"Employees are reporting that they get fired if they take a sick day off, or they get demoted," Ma said.

Under AB 2716, workers would earn one hour of paid sick time for every 30 hours of paid work. Workers in small businesses (10 employees or fewer) would be able to take up to 40 hours or five days of leave per year, and all other workers would be able to take up to 72 hours or nine days of leave per year. Carry-over language is being negotiated. Workers would not be allowed to get pay in exchange for unused sick days.

Ma said she does not have an exact breakdown of California business segments not offering paid sick leave, but she said indications are that high percentages exist in the food industry, farming and retail.

"It's not just small businesses. I think it's businesses across the board," she said.

The issue is close to Ma's heart. As a San Francisco supervisor, she pushed for citywide sick leave that was approved in 2006 and became effective in mid-2007. San Francisco became the first city in the United States to implement paid sick days, and the District of Columbia has since passed its own law.

Jim Lazarus, senior vice president of public policy for the San Francisco Chamber of Commerce, noted that the chamber opposed Ma's proposal in San Francisco. On Wednesday, he said the jury is still out on the ordinance's effect.

"It went into full effect last summer. It's too early to say what the overall effect has been," he said. "The bottom line, in most cases, is that people have not accumulated enough sick leave to see whether or not it's being abused."

Lazarus said he has observed recent increases in sick leave in some business segments, including the parcel delivery industry, but it's unknown whether those are a direct result of the San Francisco ordinance.

No state has enacted legislation on paid sick days, but proposals are pending in Massachusetts and Ohio. Federal legislation has been proposed by U.S. Sen. Edward Kennedy, D-Mass.

Ma said her efforts in San Francisco prompted her to propose her bill, plus U.S. Bureau of Labor Statistics data showing that about 40 percent of California workers are not eligible for paid sick leave.

"That's between 5 and 6 million workers," she said. "That's about the same number we were talking about last year who do not have affordable health (insurance)."

According to the Bureau of Labor Statistics, nearly half of the nation's private-sector work force lacks paid sick leave – about 60 million workers.

AB 2716's opponents, however, characterize it as a one-size-fits-all mandate on businesses and sharply questioned its projections of savings to employers and workers.

Panda Morgan, director of the Greater Sacramento Small Business Development Center, called the proposal potentially "disastrous" to small business.

"It's too bad that government feels it has to dictate to business what they can afford or not afford," she said.

As for the projected cost savings cited by the IWPR study, Morgan questioned how thoroughly the report examined the illness-based absence trends at diverse businesses statewide.

Morgan speculated that the bill, if passed, could actually limit business growth.

"If we have a one-sided issue, the employer is going to say: 'Instead of hiring, I'm going to elect to keep my business small and never hire anyone.' "

AB 2716 advanced Tuesday through the Assembly Judiciary Committee. Gov. Arnold Schwarzenegger has not yet taken a position on the proposal.

The bill is co-sponsored by the California Labor Federation and the California Association of Community Organizations for Reform Now.