Why You May Add 7 Sick Days to Your PTO Policy in 2009...
December 13, 2007
Went to a local SHRM chapter meeting this week and heard Mike Aiken, a Governmental Affairs expert from the National Office of SHRM, talk about what was going on in Washington. Great talk, very knowledgeable guy...
One of the things that caught my attention was the proposed Healthy Families Act (HFA), which would require employers with more than 15 employees to offer full-time employees seven days of paid sick leave. The HFA would also mandate the sick time could be used for the employee's illness or to care for a child/parent/spouse/individual related by blood/domestic partner. Here's some commentary on the merits of the bill....
It's a broad bill that is likely to get a lot of traction in 2008/2009, if Congress continues to be controlled by
the Democrats and the White House goes "blue state" as well.
My take? Who can be against providing paid sick time for employees? Most employers already do this. My company offers 10 sick days a year that can be rolled over year after year, providing a nice cushion for those that have to go out on FMLA leave related to a health condition for them or their families. Package the sick days with a benefit like Short-Term Disability, and you've got a great safety net for employees, in addition to what's required by law.
Employers of choice already do this since they have to compete for talent. Organizations with mostly entry level jobs - food service, poultry processing plants, etc., probably don't offer that type of leave. You show, you get paid, you don't - tough - regardless of the circumstances. That's harsh and worthy of trying to come up with a better way.
Here's the catch and why more government isn't always the best solution - the bill as currently written would also prohibit employers from eliminating existing leave coverage in order to comply with the Act. That can get complicated. Early readings suggest that if you are an employer trying to do the right thing by offering a Paid Time Off (PTO) plan, you couldn't adjust the total number of PTO days to reflect the legal requirement for a stand-alone sick-time policy. You would have to simply add the seven to what you currently offer to be in compliance. For those of us offering a great benefit, that's crazy talk...
Here's hoping someone gets to the bill's sponsors and explains that if an employer is already offering 3 weeks of PTO to new employees, they're taking care of people. Otherwise, expect companies to start breaking out their PTO policies into vacation/sick designations, if it looks like the bill will pass.
Oh brother. The last thing businesses need is another government mandate.
Posted by: Evil HR Lady | December 14, 2007 at 12:27 PM
So, I was the guest speaker on quality and quality processes, etc., etc., for a quarterly meeting of the international division of a corporation that had been mainly a very successful national company for the previous 40 years. International business was good, and expected to be a major part of the business in the future (it has been).
Before we got into the fun, they had real business to conduct. First item of business: Kudos to the international teams in Germany and France. A recent audit and study showed they were the most productive teams in the entire company. Most bang for the buck, lowest turnover, least sick days -- on almost every measure, they were on top.
Second item of business: What to do about the expatriate vacation difference? Under German and French law, the native Germans and French got a full month of vacation (the rest of the company started at two weeks, got to four weeks after a century of perfect attendance). The head office wished the company could cut back to two weeks -- curse those national laws! -- and the difference between ex-pat vacation and native vacation was producing some rumbles.
An hour's discussion, no one ever made the connection that the great productivity may have been influenced by the extra vacation.
Has everyone forgotten the studies that show decline in performance after 8 hours on the job, and negative performance after 10? Has everyone forgotten the studies on the need for time off from work?
Government mandate? Why don't you provide the time already? Your company doesn't need the productivity?
Posted by: Ed Darrell | January 12, 2008 at 10:10 PM
Ed -
Good comments. I think most of the people who visit this site (HR people) regularly agree with your statements and take on the need for time off from work. For example, right now my company provides 17 days of vacation and personal days, and another 10 for sick days, which can be used to care for others as well.
Our policy is good for everyone, to your point.
Here's my point as a business persson. You can't write a proposed law that penalizes every business, including the ones in the 90th percentile and up who already doing great things. Our company shouldn't be forced to add 7 sick days to what we already provide, nor should the company with a PTO policy that includes similar benefit levels.
Mandates are fine for those who severely lag, but companies like ours shouldn't be penalized financially to the same degree. That's bad business and why some of these workplace bills ultimately don't make it through.
Like the perspective, come back often...
Thanks - KD
Posted by: Kris | January 13, 2008 at 08:34 AM
What's all wrong about all of this is the assumption that the federal government has any authorization to create any requirement of this sort in the private sector. Everyone should be writing their representatives and senators protesting this far reaching big brother action that undermines effective market forces. Those who are employers of choice are so in part because they already provide similar benefits. Removing this ability to stand higher than the competition helps no one in the long run. A new baseline of higher costs and lower ROI becomes the new standard.
On the other side, one would be naive to not recognize the negative impact on a small business. For a small business who is already offering 10 PTO days, adding 7 more is obviously 70% more. Who can afford to add 70% cost to any expense line? For an employer with 37 employees, they've just been forced to lay off a FT employee so the rest can receive more PTO. How is that good for anyone?
Posted by: SRHR | January 15, 2008 at 09:24 AM
I want to state up front that I believe whenever possible in providing a sick leave benefit for employees, regardless of their "level" in the organization. Our company allows 2 weeks vacation and 5 sick days a year initially. Even though we're a relatively small employer (90-100 employees), we try to do what most other employers in our region do so we can compete for talent.
That said, I don't believe government mandates are always the best solution to problems or issues. I also believe this bit of legislature, if passed, will put a lot of small employers out of business or will cause them to reduce staff to cover the additional cost they will incur to provide this benefit. There may be some small businesses out there who have great profit margins and who can afford this, but I have a feeling from all that I've read, they would be the exception, not the norm.
Putting small businesses out of business or causing additional layoffs to provide a sick leave benefit would seem to be the worst thing that could happen in our country at this time. And considering the small margins many large employers are operating under today to compete globally, I can foresee this mandate (as it's currently proposed) having the same result in many larger businesses as well.
Business is business. Businesses can't operate with a 1+ trillion dollar budget deficit the way the government does or plans to do (which we will all wind up paying for). If a business can't make money, they go under. If some piece of legislature burdens already burdened companies and tips the scale too far over the "not profitable" edge, it's not going to be helpful in the short or long term. Is this really what government needs to be doing at this time?
Posted by: R. B. | March 23, 2009 at 11:41 AM
I thought that the government would only make us add time if the amount currently did not meet the new standard, we give all employees 10 sick days a year so we wouldn't have to add(if my understanding is correct). Someone please advise if I am misunderstanding the proposed change.
Posted by: Lawoffice HR | March 24, 2009 at 01:03 PM