The Law
New York City recently joined Portland, OR, Seattle, WA, Washington, DC, San Francisco and the State of Connecticut in passing laws requiring employers to provide paid sick leave to employees. New York City’s legislation, initiated by Councilwoman Gale Brewer, was introduced in 2010 and, unless the economy takes a downturn, will take effect April 1, 2014. Enactment could be postponed if on December 16, 2013, New York’s Independent Budget Office determines that a specific economic success index is not at or above its January, 2012 level. The text of the new law can be found here.
As early as spring 2014, businesses in NYC that employ 20 or more employees will be required to offer paid sick leave to employees who have been employed 4 months or more and who work a minimum of 25 hours per week. For every 30 hours worked, eligible employees will accrue one hour of sick leave for a total of up to 5 days per year or 40 hours annually.
Under the new law, and consistent with current law in New York City and New York State, businesses will not be required to pay workers for earned, unused sick leave upon termination of employment, although employers will continue to be free to adopt their own policies in this respect. Employers will not need to grant additional paid leave if they already have policies in place which allow paid time off of at least the minimum requirements of the new law or offered for the same reasons and under the same conditions.
New York City Council members overrode Mayor Bloomberg’s veto of the law in May when the bill passed the City Council 45-3. Because New York is the largest city to pass such a law, some policymakers hope that the new law will influence federal legislation in this matter. Entrepreneur writes that Christine Quinn, speaker of the New York City council and one of the bill’s supporters (and a leading candidate for Mayor), said “I hope New York City taking this action will get other jurisdictions to think about what actions they should take”.
Opposition
Mayor Bloomberg and various business leaders and commentators opposed the new law, arguing that the law creates an unfunded mandate imposed on businesses – essentially a cost imposed upon businesses without reimbursement from the city. Kevin Lavin, who currently offers employees at his NYC art supply store 4 paid sick days a year, opposes the new law, stating in the New York Post ’“We’re a free society. Within the framework of certain labor laws, I should be able to run my business. If the city’s so concerned, let them pay for it.”’ Mayor Bloomberg also argued that the bill would make New York City a less competitive environment for businesses in which to locate and hire employees.
Some labor economists argue that compliance costs imposed upon businesses will ultimately get passed on to employees through depressed wages, particularly in times of high unemployment. Heritage Foundation Senior Policy Analyst, James Sherk, includes both the policy concerns and economic effects of mandatory paid sick leave in this report. Under “Economic Effects”, he lists “If Congress makes paid sick leave mandatory, workers total compensation will not rise. Companies respond to higher benefit costs by reducing workers’ pay by approximately the cost of providing the benefit. Companies will spend more on leave benefits and less on wages.”
Support
Supporters of the bill argue differently. One popular argument in support of the new law is the belief that healthy employees are more efficient while sick employees can get sicker on the job, get others sick, and end up missing more work when they do not take time to recuperate. “Contagion Nation” is a study which explores this phenomenon, reported by Jena McGregor for the Washington Post. The thinking is that offering paid sick leave would actually heighten productivity and become more cost-efficient for businesses.
Hector Figueroa, president of 32BJ Service Employees International Union, emphasized the benefits of the bill, writing: “the argument that paid sick days would hurt businesses just doesn’t hold water.” Figueroa espouses a view that many workers feel they literally cannot afford to take a day off – no matter how sick. Figueroa also cites an Economic Policy Institute report which asserts that after a similar law was enacted in San Francisco, employment in the city actually grew twice as fast as in the neighboring counties that did not have similar policies, suggesting that New York City’s law could have a similar, positive impact in New York City.
Andrew Mirsky, Principal with Mirsky & Company, PLLC, contributed to this post.
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