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Paid Sick Leave Focus of Senate Committee Hearing

On February 13, the Senate Health, Education, Labor and Pensions Committee held a hearing on the Healthy Families Act (HFA) (as-yet-unnumbered). The HFA would require employers with 15 or more employees to provide seven paid sick days to employees working 30 or more hours per week to care for their own, or a family member’s, medical needs. Employees working less than 30 hours per week would receive paid leave on a prorated basis.

Chair Edward Kennedy (D-MA) said, “As members of Congress, we don’t lose our pay or risk our jobs if we stay home because of illness. But millions of Americans aren’t so fortunate…Among workers in the lowest income quarter, 80 percent do not have the ability to take time off for an illness without losing their pay or even their jobs. This lack of protection is particularly difficult for women and children. Women have moved into the workforce in record numbers, but they continue to take primary responsibility for their children’s health. Nearly 80 percent of mothers say they are solely responsible for their children’s medical care.” Sen. Kennedy detailed the benefits of paid sick leave, including faster recovery times for sick children who are cared for by a parent and lower public health risks from communicable diseases like influenza. He concluded, saying, “The world and workforce are changing, and our laws have to catch up. I look forward to hearing from our witnesses today about how we can move forward and make paid sick days our national law.”

“All across this country, without any Congressional intervention, the operation of labor market economics, and the voluntary cooperative efforts of employers and employees, are resulting in the establishment of leave policies that meet their unique needs,” said Ranking Member Mike Enzi (R-WY). Describing the bill as an “unfunded mandate” on states, Sen. Enzi said that it would be an “administrative and logistical nightmare for many employers.” He worried about the financial impact on small businesses and theorized that the legislation might result in reductions to other employer-sponsored benefits: “A dollar that must be spent here, often results in a dollar that will not be spent elsewhere. Imagine the irony for any employee who is granted sick leave under this bill, but whose employer decides to eliminate or reduce health plan benefits.” The measure, Sen. Enzi said, “throws good will out the window and abandons free markets and innovation in favor of another big government, one-size-fits-all mandate that will only compound existing problems.”

Debra Ness, president of the National Partnership for Women and Families, said, “Americans want to be responsible workers and be able to care for their families. In 78 percent of today’s families, both parents work for pay and the typical couple in America now works close to 90 hours per week. But our policies lag desperately behind and families are struggling as a result. We can and must do better and we will, if we truly value families.” Ms. Ness said that the unavailability of paid sick leave is especially difficult for lower income families: “Low wage workers typically have little or no savings to fall back on when they need time off, but have no paid sick days. For example, a recent survey of New York residents found that 71 percent of low-income workers report having less than $500 in savings…When sick workers have little savings, they are especially vulnerable to extreme financial crises and even bankruptcy. One study found that nearly two million Americans experience medical bankruptcy annually, even though 75 percent of those surveyed had health insurance at the onset of illness.” Ms. Ness emphasized the difficulties for women, saying that primary caretaking responsibilities for dependent children and/or elderly relatives “double[d] the chance of experiencing job loss because of family illness.”

Heidi Hartmann, president of the Institute for Women’s Policy Research, testified on the economic outcomes of mandating paid leave. Using figures from the Bureau of Labor Statistics (BLS), Dr. Hartmann said that 42 percent, or about 57 million, of workers lack paid sick leave. Women comprise just under half of this group, or about 23 million workers. She described the economic benefits of paid sick leave, including reduced employee turnover and training costs. Using BLS statistics, Dr. Hartmann told the committee that the estimated costs of seven days of paid leave in FY2006 would have been $22.3 billion, a figure which is far less than the estimated $31.2 billion benefit of the bill. She concluded by calling the committee’s attention to a side effect of the legislation: “Job-protected paid sick days are especially important to women workers…A bill to guarantee workers several paid sick days per year will lengthen and strengthen women’s attachment to their jobs, enabling them to gain job seniority and improve their long-term productivity. A paid sick days bill will help women’s average time on the job catch up with men’s, contributing ultimately to greater pay equity between women and men.”

Discussing what he considered to be unforeseen and negative effects of the bill, G. Roger King, a partner at Jones Day, said, “Employers in this country are already burdened by numerous federal, state and local regulations, which result in millions of dollars in compliance costs. These mandated, and largely unfunded, ‘cost of doing business’ requirements in certain instances not only hinder and impede the creation of new jobs, but also inhibit our nation’s employers from competing globally. Simply stated, a compelling case needs to be established before any additional regulations and statutes are imposed upon our nation’s employers in this area.” Mr. King outlined six “fundamental policy and structure observations” about the HFA, including the current prevalence of voluntary paid leave policies, the regulatory and legal burdens likely to be imposed by the legislation, the difficulty in determining the compliance of a growing number of employers who offer paid time off (a general bank of leave to be used for sick time, vacation, or personal leave), the potential for abuse, and the lack of data on “presenteeism, a relatively new term used to describe workers who remain on the job, or come to work, but who are not as productive as usual due to stress, depression, injury, or illness.” Mr. King was especially concerned that the enactment of the HFA would result in a “Bermuda benefits triangle” for businesses as they attempted to reconcile the various mandates of the Americans with Disabilities Act, the Family and Medical Leave Act, and state workers’ compensation laws. “Unfortunately, if the HFA is enacted based on the experience of many employers under FMLA, and the problems outlined above that can be anticipated with the enactment of the HFA, employers of all sizes may be discouraged from implementing any additional improvements in their paid leave programs assuming after paying for their additional paid leave costs, administrative expenses, and litigation costs associated with the HFA that they would even have any resources left to make such improvements,” said Mr. King.

Jody Heyman, a professor at McGill and Harvard Universities, presented a global perspective: “168 countries offer guaranteed leave with income to women in connection with childbirth; 66 countries ensure that fathers either receive paid paternity leave or have a right to paid parental leave; 107 countries protect working women’s right to breastfeed; 137 countries mandate paid annual leave; and 145 countries provide paid sick days or leave for short- or long-term illnesses.” Dr. Heyman responded to concerns that the HFA would wreak damage on the economy, saying, “The World Economic Forum, which brings together the top business leaders from around the world, has ranked the most competitive national economies. All of the 20 most competitive countries, with the exception of the United States, guarantee paid sick days…In fact, we have examined the relationship between national economic competitiveness and paid sick days and leave. Those countries which are most economically competitive are consistently more likely to guarantee paid sick days and leave for employees’ own health, for the care of children’s health, and to meet the health needs of other adult family members. It makes sense. If you guarantee paid sick days, you have healthier workers and a healthier next generation both essential to competition.”

During questions, Sen. Bernie Sanders (D-VT), asked Dr. Heyman how the U.S. fared in mandating leave policies, including but not limited to sick leave. Dr. Heyman said that the U.S. is “near the bottom” and that it guarantees no paid maternity leave, “placing us in the company of only four other nations: Lesotho, Liberia, Papua New Guinea, and Swaziland.”

Sen. Wayne Allard (R-CO) said that he was concerned about rural small businesses that depend on one or two skilled persons to oversee or run day-to-day operations. He asked Mr. King if there was any data on how the HFA or similar legislation would impact local communities. Mr. King said that, to the best of his knowledge, there was no data. Dr. Hartmann said that such data might become available in a few years now that local jurisdictions, such as San Francisco, are enacting paid leave laws.

Dr. Rajiv Bhatia, director of occupational and environmental health for San Francisco’s Department of Public Health, also testified at the hearing, and discussed the epidemiological benefits of paid sick leave.

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