The Agenda: Paid Sick Leave Has Some Business Owners Feeling Ill

The Agenda

How small-business issues are shaping politics and policy.

When the advocates at Family Forward Oregon sought to muster support among businesses in Portland for a local paid sick leave ordinance, they found a sympathetic ear in Tony Fuentes. Mr. Fuentes and his wife operate Milagros Boutique, which sells cloth diapers and clothing for babies and children on Portland’s northeast side.

“The idea that 80 percent of low-income workers don’t get a minute of protected time was not in line with my view of the country, or of the social compact,” Mr. Fuentes said, who testified in favor of the bill at a council hearing.

But to judge by the efforts of local business organizations in Portland and in New York City, which is poised to pass its own paid sick leave law, as well as from interviews with a handful of businesses, the more common response is hostility, or at least wariness.

Portland’s new law, which passed the City Council in March, follows a template set by a handful of other cities, and Connecticut, in the last seven years. (In Philadelphia, a similar proposal could not overcome a veto by the mayor.) Businesses with at least six employees have to provide one hour of paid sick leave for every 30 hours an employee works, up to 40 hours a year, as well as protect the employee’s job. Companies with five or fewer employees must offer the same amount of unpaid, job-protected time off. An employee must work at least 240 hours before becoming eligible. In Portland, the law takes effect in January.

Mr. Fuentes said that he already offered paid time off to all of his employees (the number fluctuates between five and seven). They can use the time for any purpose, he said, and he has found that offering the time has added just 1 percent to his total labor expense. “The costs are pretty minimal,” he said, “and, talking with other businesses in Portland doing the same thing, our costs are line with theirs.”

Because Mr. Fuentes has a paid time-off policy that is at least as generous as what the city will soon require for sick leave, he will not be affected by the new law. But whether a business owner supports the law does not necessarily turn on how much strain the law will put on the company. Family Forward Oregon also tried to press Lisa Schroeder, owner of Mother’s Bistro and Bar into service for paid sick leave. Ms. Schroeder also offers paid time off and may have seemed a promising candidate to be a public face for the measure, since she is well known for her liberal views on other issues. But Ms. Schroeder demurred.

“I believe in it,” she said. “However, in my business, there’s a lot of ‘brown bottle flu,’ so you have people who call in because they had a rough night the night before.” Ms. Schroeder said she offered paid sick leave in addition to vacation days for employees who are “legitimately sick” — “I have the right to reserve judgment” — and she had hoped the ordinance would require a doctor’s note, but others called that a hardship for employees.

In the end, she said, “I just chose to stay neutral and let the chips fall where they may.”

Debbie Kitchin, a contractor who runs Interworks, a Portland remodeling business, worries about the paperwork associated with the law. Ms. Kitchin provides paid time off for her three full-time workers, but not for her crew of part-timers, which this year has ranged from one to three — she said she wasn’t sure whether the law would require her to offer paid leave. (Lisa Frack, spokeswoman for Family Forward Oregon, said that question would be resolved when the rules to carry out the law are written this summer.)

“For some of our people that we’ve brought in part time, they might work 20 hours one week and four hours the next week,” she said. “And our payroll software doesn’t really track the benefits by cumulative hours. It tracks them by pay period, or by month, which adds to the cost.

“By itself, it’s not the end of the world. But do you know how many other things there are like this? It’s the cumulative effect of all these little things,” she continued. “In my field, there are contractors who not only won’t do this but don’t even pay payroll taxes, liability insurance. They don’t get licensing and bonding. So this is just one more burden to businesses that are trying to follow the rules.”

Ms. Kitchin, who testified against the ordinance in a council hearing, said that next year, she might rely on a staffing agency or have her current employees work longer hours rather than hire additional part-timers, though she acknowledged that both of these alternatives would add to her costs as well.

For businesses like Ms. Kitchin’s, the bill in New York City promises a somewhat lighter touch than the Portland ordinance. Should it become law — it is likely to come up for a vote in two weeks — only businesses with at least 20 employees will be required to offer paid leave when it takes effect in the spring of 2014. A year and a half later, the threshold will drop to 15 employees. Businesses with fewer employees would still have to offer unpaid leave and job protection.

Jason Chung, who owns a Key Food supermarket in Forest Hills, Queens, that employs about 35 people, called the proposal undue interference. “Lawmakers should leave those kinds of things to the business people,” he said. Mr. Chung does not offer paid sick leave or time off now, but, he said: “If somebody’s sick — they have a legitimate excuse, a doctor’s note — oftentimes we give them full pay. So we don’t have to be told to do it.”

When asked if the rule would raise his costs, Mr. Chung, who is considering opening a second store, paused. “Not as much as Obamacare,” he said. “But I know Obamacare will have a big impact on the business.”

Article source: http://boss.blogs.nytimes.com/2013/04/29/paid-sick-leave-has-some-business-owners-feeling-ill/?partner=rss&emc=rss