Paid sick leave mandate unhealthy to state's economy

'One-size-fits-all' proposal doesn't fit today's workplace

(April 28, 2008) In today’s complex world, employers must be able to keep their companies productive and competitive. A proposal in the legislature, however, would allow state government to determine what’s best for businesses by taking away their flexibility to manage their workplaces in the way they see fit.

This would cost employers in dollars and productivity — a tough one-two punch in this weakening economy. However, last week the Appropriations Committee approved SB-217.

SB-217 is a “one-size-fits-all” paid sick leave mandate for employers of 25 or more employees to provide paid sick leave at a minimum of one hour for every 40 hours worked — with carryover into future years.

Proponents say the proposal would save employers money, but the fact is, paid sick leave isn’t “free” or cost-saving. Employers in fact would have to bear new costs and would likely be forced to adjust other employee benefits, such as health care, vacation or wages to accommodate them.

As Connecticut businesses struggle to create jobs and stay competitive, this is simply another government mandate that will make it harder to do business here, for the following reasons:

SB-217 will affect current and future collective bargaining agreements by raising the floor for labor union negotiations. This will cost employers much more money when negotiating union benefits, and in the case of municipal and town employers, this will make municipal services — and thus property taxes — much more costly.

Most Connecticut businesses already offer this type of benefit, but with more flexibility to tailor them to meet the needs of their employees and the company. A recent CBIA survey found the vast majority of employers in Connecticut (69%) already offer paid sick leave to their employees, and 79% say the employee’s length of service doesn’t affect the number of sick days given.

One-size-fits-all policies don’t work. For seasonal and tourism-based industries or companies that rely on part-time employees, students, interns, and others, mandatory paid time off is unworkable and will weaken their operations and productivity. Employers need the flexibility to manage their own workplaces.

SB-217 will encourage abuse of the system. It allows employees to carry over accrued time indefinitely, from year to year. In addition, employers can’t request physicians’ documentation until after three consecutive days of absence, so employees could routinely use sick time before and after weekends and holidays.

What’s more, employees who work overtime and more than 40 hours per week can accrue much more sick time than intended. And under current law, some companies might be forced to pay out all accrued time when an employee leaves their employment.

Connecticut recently ranked last in the U.S. for how its government affects the business climate, according to Expansion Management magazine. Not surprisingly, the state is increasingly viewed as a place unfriendly to businesses. Mandates such as SB-217 do nothing to improve that perception. And by making it harder for companies to afford operating here, it could ultimately affect the very employees if purports to help.

For more information, contact CBIA’s Kia Murrell at 860-244-1931 or kia.murrell@cbia.com.