by Chris Heaton - Vice President of Advocacy and Public Affairs
On October 29, 2018, New Jersey became the 11th state to adopt a statewide paid sick leave statute that requires virtually all employers to comply. The New Jersey law provides that all employees will accrue one (1) hour of sick leave for every thirty (30) hours worked, with a maximum accrual of 40 hours, unless the employer has an existing paid sick leave policy that provides an equal or better benefit. Employers must allow employees to carryover unused hours, up to a maximum of 40 hours to the next benefit year.
Connecticut was the first state to require private sector employers to provide sick leave to their employees in 2011. California followed suit in 2014 and since then eight (8) other states passed similar legislation (Arizona, Maryland, Massachusetts, Oregon, Rhode Island, Vermont, Washington and Washington, D.C.)(1)
Small businesses, many with five (5) or fewer employees, may find state laws such as this as a regulatory burden that removes flexibility between an employer and employee and imposes what many consider to be government overreach. It was not surprising when a lawsuit was filed in Texas by the Texas Association of Business (TAB) against the City of Austin over its planned implementation of a paid sick leave ordinance within the city that mirrors in some respects the New Jersey statute (requiring employers to provide one (1) hour of sick leave for every thirty (30) hours worked).
TAB contends the ordinance violates the Texas Minimum Wage Act, which bars local governments from regulating private sector wages. Many other cities around the country have similar ordinances, but is mandatory paid sick leave the best solution for employers and employees?
The Society for Human Resource Management (SHRM) expressed support for the lawsuit challenging the sick-leave ordinance in Austin because it supports a nationwide solution that works for both employers and employees. SHRM supports the “Workflex in the 21st Century Act” (H.R. 4219) by Rep. Mimi Walters (R-CA), which would “simplify paid-leave options . . . and increased flexible work arrangements to employees.”(2)
This law would create compensable leave requirements for employers based on the number of employees, but it also creates flexible workplace options that include biweekly work programs, a compressed work schedule program, telework, job sharing and flexible scheduling, among other options.
To highlight one example of this flexibility, under the biweekly program, the employer could allow an employee to work 60 hours one week and 20 hours the next week without having to pay overtime until the employee exceeds 80 hours in a two-week period. This could allow an employee to have more flexibility to address personal issues without having to take time off work or use paid leave.
Most employers want to offer pay and benefits that will help attract and keep qualified employees, especially in this era, where more job openings exist than there are available employees. But, many employers (especially small employers) must also grapple with laws and regulations that cut into their ability to earn a living and invest in their business.
Flexibility in scheduling, hours worked, and other options as outlined in H.R. 4219 provide a potential solution for employers and their employees by creating flexibility to take the time off employees need for family, health or other personal needs, without having to sacrifice pay for the employee or performance for the employer.