Governor-elect's proposal for sick days upsets some businesses
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Governor-elect’s proposal for sick days upsets some businesses

By   /   November 24, 2014  /   No Comments

By Andrew Staub | PA Independent

Gov.-elect Tom Wolf won’t take office for another two months, but one part of his Fresh Start policy plan already has business types feeling queasy.

Wolf wants to implement a new sick leave policy mirrored after a two-year-old law in Connecticut, saying employees shouldn’t have to choose work over staying at home to care for a sick family member.

“Hundreds of thousands of Pennsylvania workers do not have paid sick time,” said Jeffrey Sheridan, Wolf’s press secretary. “It affects productivity and it negatively impacts the economic growth.”

But critics of such a policy in Pennsylvania believe the state government needs to stay out of the employer-employee relationship, at the risk of businesses hiring fewer people or passing increased costs to consumers.

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SICKLY RECEPTION: The Pennsylvania business community isn’t fond of Gov.elect Tom Wolf’s proposal to mandate sick leave.

“These are the problems we get into when government attempts to make those kinds of dictates,” said Gene Barr, president and CEO of the Pennsylvania Chamber of Business and Industry.

Wolf’s proposal is unpopular among many others in the business community, according to the conservative Lincoln Institute’s Fall 2014 Keystone Business Climate Survey. That poll found more than 75 percent of business people opposed a paid sick leave mandate for all businesses.

Connecticut, the first state to pass mandated sick leave, faced similar opposition before passing the law in 2011. Business owners there contended the policy would force companies to flee or deal with chronic absenteeism.

About two years after the law went into effect, The Center for Economic and Policy Research knocked down those fears, conducting its own survey that found the law brought sick leave to tens of thousands of people while having a “modest” impact on business.

Since the law was implemented, more than three-quarters of employers now support the law, according to the center.

That’s largely because carve-outs in the law helped mitigate the impact, according to the center. In addition to applying to only businesses with 50 or more employees, the law exempted manufacturing and nationally chartered nonprofits, decreasing the reach of the law. Some businesses already offered sick leave.

Part-time workers benefited disproportionately, while the largest spikes in paid sick leave were found among the hospitality, retail, and health, education and social services industries.

Sheridan’s remarks, made it in emailed statement, did not elaborate on what the new governor’s preferred policy might look like, making it harder to predict how Pennsylvania — a state with about three times the population of Connecticut – would be affected.

Even if Wolf kept the carve-out for manufacturing, Douglass Henry doesn’t like the idea of another government mandate on the private sector.

Henry chairs the leadership council of the Pennsylvania chapter of the National Federation of Independent Business and is CEO of Henry Molded Products in Lebanon. He’d rather see incentives for good work, he said.

Henry Molded Products doesn’t offer paid sick leave but instead offers bonuses for exemplary attendance, which, Henry said, can be used to help employees ride out times when illnesses might force them to miss work.

Mandated sick leave could bring on higher overtime costs and disrupt his company’s round-the-clock schedule, Henry said.

“If people are just walking out the door getting paid and we have to figure out a way to replace them at the last moment — aside from the fact it’s a logistical nightmare — it’s a financial burden to say the least,” he said.

Ultimately, Henry might not have to worry. Efforts to pass mandated sick legislation in Pennsylvania have stalled in the GOP-controlled Legislature.

Kevin Shivers, executive state director of NFIB Pennsylvania, believes Wolf’s agenda — which also includes an increase to the minimum wage — will have to change now that Republicans built upon their majorities in the General Assembly.

While the election was a referendum on Corbett’s personality and inability to push through a conservative agenda, voters weren’t clamoring for initiatives such as paid sick leave when they elected Wolf, Shivers said.

“His best bet will be to use his political capital to fix the pension crisis and cut unnecessary and costly government programs like the (Pennsylvania Liquor Control Board) to help him get a handle on his most immediate problem – the state budget,” Shivers said of Wolf, a Democrat.

California and Massachusetts have followed Connecticut’s lead, while several cities across the county have instituted their own sick leave laws.

Philadelphia City Council tried to pass such a measure twice, only to see Mayor Michael Nutter veto the legislation both times.

The push for such a policy has long been on the radar for the Pennsylvania Restaurant and Lodging Association.

Melissa Bova, a lobbyist for the association, said the industries represented by the PRLA would be particularly hard hit because of a reliance on part-time work and schedules that don’t follow the normal 9-to-5 routine. With those industries already operating on a thin profit margin, that could mean increased costs, decreased hiring and even a move to replace workers with technology, she said.

“We don’t support cookie-cutter mandates that tell different businesses how to operate,” Bova said.

In his Fresh Start plan, Wolf has pointed to The Center for Economic and Policy Research’s survey — which also found minimal abuse of paid sick leave — as evidence his policy would be “better for employees and families and ultimately better for business.”

Business leaders disagree, harkening back to the notion that government should stay out of their affairs with employees.

“There are a lot of things that are good ideas that may or may not be in the purview of the government to mandate them,” Barr said.

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Eric Boehm is the national regulatory reporter for Watchdog.org. He lives in St. Paul, Minnesota. His work has appeared in Reason Magazine, National Review Online, The Freeman Magazine, The Philadelphia Inquirer, The Washington Examiner and Fox News. He was once featured in a BuzzFeed listicle. Follow him on Twitter @EricBoehm87 and reach him at [email protected]