More than a third of states have regulations mandating paid sick leave. Three more were added to the total this election cycle. Missouri, Nebraska and Alaska are joining the other 15 states with regulations requiring employers to provide some paid sick leave. This was something of a stealth campaign promoted by outside advocacy groups. According to the Kaiser Family Foundation:
These paid sick leave ballot measures flew under the radar compared with more high-profile ballot initiatives such as those on abortion…Campaigns supporting the sick leave initiatives in Alaska, Missouri and Nebraska raked in less than $9 million combined in cash contributions…Most of the money funneled to the paid sick leave campaigns came from backers outside those states, the filings show.
Economists believe that workers themselves influence employee benefits by voting with their feet. Prior to Obamacare, employers in low-wage industries often did not provide health insurance. It was not because these employers were stingy. It was because their workers were not willing to forgo equivalent wages to pay for health coverage. Workers preferred higher take-home pay. Why don’t more employers offer generous sick leave? Because sick days are not free. Like other (mandatory and elective) benefits they are in lieu of cash wages and higher take-home pay. Employee benefits are a portion of total compensation. If employee benefit consultants determine that, say, 80% of sick time is used, it will reduce other benefits like paid vacation days. Many workers may prefer vacations days to sick leave or prefer the flexibility to decide how to use paid days off in any given year. Mandates like these reduce employers’ flexibility to tailor benefits in ways that workers prefer.
At two different jobs that I’ve had over the years my employers grappled with how to make sick time fair. Some people came in when they were sick because their jobs were not conducive to staying home one day and picking up where they left off the next. Others used every sick day they had, presumably becoming healthier once they exhausted their sick days. Many used their sick days (rather than vacation days) to care for sick children. Coworkers without children often complained about having to pick up the slack for their childbearing colleagues. In my case both my employers opted for a paid time off (PTO) model, rather than accruing sick days and vacation days separately. The way this worked was rather than accrue 10 or 15 vacation days and five sick days, workers were allotted 13 or 18 paid days off to use as they pleased. (The larger number of days was for those with five or more years of service.) No doctor’s note was required, no excuses were needed, no need to hide the fact that you were not sick, but your kid was. It worked out great for most people.
It is not clear whether innovative benefit design like I discussed above are even allowed under the paid sick leave mandates in 18 states. There may be flexibility in some states but not others. My guess is that proponents try to limit flexibility as they don’t want to penalize unhealthy people by making them choose between sick days and vacation days. If this sounds implausible just look at Obamacare. Or it could be in their haste to mandate paid sick leave proponents didn’t anticipate some employers may already allow workers to decide how to use paid days off. In any case, it’s an unhealthy trend in workplace mandates for state laws to dictate how employers design employee benefits.