Mandatory paid sick leave laws regulate employment benefits; they require employers to provide paid sick leave to be used at the employee’s discretion. The proposed legislation in Maryland would require employers with more than nine employees to provide 56 hours (i.e., seven days) of paid leave per year and those with nine employees or fewer to provide unpaid leave.
The leave can be used for purposes of illness, health care (i.e., scheduled appointments) and certain absences associated with domestic violence, both for employees and their family members.
This bill is clearly well-intentioned. It is meant to provide financial support to employees who miss work because of illness or domestic violence and to prevent workers from coming to work when sick and potentially infecting others.
Despite its worthy objective, mandating paid sick leave will have a negative impact on Maryland businesses, particularly on smaller employers. The financial and administrative impacts include the following:
- A minimum wage employee in Maryland currently makes $8 per hour. Therefore, the annual cost of providing 56 hours of paid sick leave is 56 times $8, which equals $448 (as of July 1, when the minimum wage rises to $8.25, that annual cost will be $462). It is important to keep in mind also that $448 ($462) is the minimum direct cost to employers, since most employees in Maryland make more than minimum wage and because the minimum wage in Maryland will continue to increase during the next few years.
- Some employers may have to increase work demands, reduce work hours or reduce compensation to balance out the cost of providing sick leave.
- The bill creates an additional private right of action against employers, and for employers of all sizes, defending litigation can be costly.
- The bill requires the accrual of leave of one hour for every 30 hours worked. Employers’ current policies, however, use other accruals (e.g., by days or weeks worked or pay periods). This would mean that they would be forced to change accrual methods, which would be complicated, costly and burdensome.
- An employer would be required to notify employees each pay period of the amount of earned sick leave that is available. Smaller employers, without designated human resources personnel, could have issues complying with this requirement.
- As drafted, an employer is not permitted to validate the use of sick leave through documentation until an employee has missed two consecutive shifts. This is so even if an employee claims he has taken a day or morning off to go to a doctor. This is an invitation for abuse and, administratively, would be difficult to manage.
- If an employer does not comply with the record keeping requirements or takes adverse action against an employee, there is a rebuttable presumption (the automatic assumption that the employer is wrong). • This presumption unfairly requires an employer to prove its innocence.
- The bill permits sick leave to be used for scheduled doctor visits and other planned events (like court dates), without any requirement that the employee try to schedule the visit so as not to disrupt the employer’s operations. The federal Family and Medical Leave Act imposes this obligation on employees, yet the state bill does not require employees in Maryland to follow this sensible rule.
- Because this leave is protected, employers could not utilize currently existing no-fault attendance policies.
The impact of this bill is extensive and will, without question, increase the cost of doing business in Maryland. Employers will be forced to pay the wages of absent employees, reassign other employees to fill in, pay overtime, hire temporary labor or have work go unfinished, affecting customer service, productivity and sales.
The financial and administrative impact, along with the increased cost of doing business, will foster an anti-business climate in Maryland at the exact time we need to be more competitive.
All of this, despite research that suggests that, overall, mandatory paid sick leave laws consistently have moderate negative consequences for affected businesses, does not produce the benefits promised by proponents and, most importantly, does not prevent employees from coming to work sick.
Brien Poffenberger is president/CEO of the Maryland Chamber of Commerce. He can be reached at 410-269-0642 and [email protected].