Saturday, May 16, 2009

Legislation to feel good about

House Democrats have introduced legislation to require businesses who have 15 or more employees to provide a minimum amount of paid sick leave each year.

The bill, the Healthy Families Act, would be binding on employers that had 15 or more workers. It would guarantee employees one paid hour off for each 30 hours worked, enabling them to earn up to seven paid sick days a year. They would be entitled to claim their days when they or a child, a parent, a spouse or someone else close to them became ill.
As we see each flu season, too many sick people come to work infecting others. People should have the opportunity (and be encouraged) to stay home when they are sick. The availability of paid sick leave would also help to even the employment playing field between women and men and possibly provide incentives for men to shoulder a more equal share of home responsibilities.

According to the Bureau of Labor Statistics, 41 percent of civilian employees currently have paid personal days as an employee benefit. Nearly three-fifths of businesses with 500 or more employees offer the benefit. (Information has been updated). The lack of a universal mandate puts sensible businesses at a disadvantage.

Setting the benefit in terms of hours worked instead of a flat yearly rate also means that the costs of the benefit to businesses will be marginal rather than lump sum. This should help to minimize the employment impacts. It is also a reasonable way to extend the benefit to part-time workers.

To be sure, some small businesses would be put at a disadvantage. Besides the cost of paid leave days, businesses also face possible replacement costs for workers who are absent. Small businesses typically have the least flexibility to cover temporary replacements.

Workers will also bear some, if not most, of the costs. To the extent that the costs to businesses of employing people increase, businesses are likely to offer lower wages or fewer other compensated days off than they otherwise would have. That is, the incidence of the cost of the benefit will be split between businesses and workers. If job markets are competitive, economists expect that nearly all of the cost would be passed on to workers.

As expected, the Party of No vows to block this bill.
Michael Steel, a spokesman for the House Republican leader, Representative John A. Boehner of Ohio, said, "Republicans want to ensure that working families have the flexibility to get the health care they need, but we don’t think the answer is a 'one size fits all' government mandate."
The Republicans offer a newspeak definition of flexibility, as working families without paid leave would lack the time and money to attend to their health needs.

The BLS figures indicate that most high wage workers already enjoy this benefit. However, less than a quarter of workers in the bottom quartile of the wage distribution have paid personal days. (Again, see updated figures). So, the workers with the least flexibility in terms of money also appear to have the least flexibility in terms of paid time off.