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Paid Sick Leave Proposal, Seeking a Ballot Appearance In Michigan, Saw Mixed Results Elsewhere

Activist group MI Time to Care remains determined to pass a ballot initiative proposal requiring employers to provide paid sick leave, after proposals orchestrated by group Raise Michigan failed to get enough signatures in 2015 and 2016.

The proposal, this time called the “Earned Sick Time Act,” would appear on the ballot in November 2018 if at least 252,523 signatures are collected within 180 days before May 30, 2018. The ballot language is the same as the proposals from 2015 and 2016.

The language states that employees of small businesses can gain one hour of earned sick time for every 30 hours worked, but cannot use more than 40 hours of paid earned sick time per year unless the employer agrees to a higher limit. Employees of all other businesses earn paid sick time at the same rate, but can use up to 72 hours of paid earned sick time per year.

Supporters of the Earned Sick Time Act argue the proposal will provide an opportunity for those struggling with a mental or physical illness to get paid when they cannot make it to work.

Research on the potential Earned Sick Time Act indicates that while this policy is aimed at improving employee benefits, businesses which have been effected by similar proposals around the country have had difficulty dealing with the cost of the bill and as a result employees don’t see the results proponents of paid sick leave initiatives hope for.

In a 2017 Pew Research survey, 78% of respondents indicated they have to cut back on spending to make up for lost salary when on sick leave. About 37% of respondents said they have to take on debt when on unpaid sick leave.

On the other hand, the United States is one of few developed countries to leave the choice of paid sick leave up to the employer. This means that paid sick leave is disproportionately denied to U.S. workers in comparison to other countries.

According to the Bureau of Labor Statistics, only 39% in the bottom quartile of private sector wage distribution have access to paid sick leave, while 84% of workers in the top quartile of the private sector have paid sick leave.

These statistics exemplify the unequal access to paid sick leave based on economic class; lower-income workers who arguably need increased access to paid sick leave are disproportionately denied this benefit in comparison to their high-income counterparts.

According to a report done by the Institute for Women’s Policy Research, minorities and those with lower incomes are also significantly more likely to be denied paid sick leave. The Earned Sick Time Act is an effort to help these people that struggle financially when on leave from work for medical or family reasons.

The Michigan Chamber of Commerce and other business-focused groups assert the Earned Sick Time Act will have negative effects, especially on small businesses. Wendy Block, the Senior Director for Health Policy, Human Resources, and Business Advocacy at the Michigan Chamber of Commerce, is concerned about the negative impacts which this initiative could have on businesses.

“Businesses want to attract and retain good employees. So when companies can afford to provide paid leave, they typically do. However, for those that cannot afford to do so, a paid leave mandate will have a chilling impact on their business and, ultimately, their employees,” Block said.

She argues the initiative is not flexible enough to accommodate for the limitations of smaller businesses, and would require these businesses to pay employees money they don’t have for labor they don’t receive in return.

“New mandates do not come without costs and, in this case, it will likely result in employees seeing increased employee responsibilities, fewer raises, fewer bonuses, reduced hours and even layoffs,” Block explained.

Connecticut passed its own paid sick leave law in 2012. According to a 2016 study by the Employment Policies Institute, a conservative think tank, the implementation of the paid sick leave law had a negative effect on the labor market work.

Although it is not a massive change, it is significant that there has been an increase in the number of unemployed workers by one percentage point, the study reported. While about 70% of those in their mid-thirties and above now have paid sick leave as a result of the bill, virtually none of those from 18-20 years old have paid sick leave. To pay for the costs of sick leave, those from 18-20 years old lost about $850 in annual income, according to the analysis.

Five U.S. states and a variety of cities have some form of paid sick leave policy in place. In San Francisco, California, there is a very similar policy to the one proposed for Michigan.

Employers must provide one hour of paid sick leave for every thirty hours worked. There is a forty-hour cap on earned sick leave per year for small businesses, and a seventy-two hours cap on earned sick leave for larger businesses. A small business means an employer has fewer than ten employees

A 2014 study published in the American Journal of Public Health after two years of the paid sick leave ordinance being in place in San Francisco highlights the policy's mixed impact. Thirty-nine percent of businesses had to reduce other benefits, 32% reported worse profitability and 18% reported that to compensate for the costs of the policy, they had to increase prices of their products. But support for the policy among employees is strong. Seventeen percent of businesses reported a noticeable increase in employee morale and 71% noted there is high support for the policy.

Like with many public policies, there may be both positive and negative implications if the Earned Sick Time Act becomes law in Michigan. Before Michiganders can decide on supporting the policy, MI Time to Care will have to garner enough signatures to get the proposal a spot on the November 2018 ballot.

Emily Jenkins is an undergraduate policy fellow at the Institute for Public Policy and Social Research.