Neighboring Paid Sick Leave Jurisdictions Have Very Different Enforcement Experiences

Connecticut and New York City are just about neighbors. NYC is a mere 35 miles from Connecticut’s southwestern corner.

Connecticut was the first state to enact a PSL law. Come January 1, 2017, the Connecticut Paid Sick Leave law will have been in effect for five years. The New York City Earned Sick Time (Paid Sick Leave) law has been in effect since April 2014, about 2 ½ years.  The two jurisdictions have had very different enforcement experiences.

In Connecticut, there have been relatively few complaints during the five years of the law, perhaps 50-75, according to Heidi Lane, Principal Attorney at the Connecticut Department of Labor. The Department has not assessed any penalties against employers.

The state DOL continues to receive dozens of calls weekly from employees and employers seeking information about the PSL law, according to Attorney Lane   Some of the more frequent inquiries concern whether a particular position is a “service worker” and entitled to paid sick leave under the law; whether an employee is a “per diem” employee exempt from paid sick leave under the law; or whether employees are entitled to 40 hours of sick leave in addition to their employer’s existing leave policies. Thus far, employers who were not aware of the law have voluntarily come into compliance, according to Attorney Lane. The agency continues to do seminars to educate the business community about the law.

The NYC Department of Consumer Affairs (DCA), the agency responsible for implementing and enforcing the NYC PSL, in a report entitled NYC’s Paid Sick Leave Law: First Year Milestones, noted that in the first year of the PSL, it responded to “more than 8,340 emails and calls” regarding the law.  Employees were twice as likely as employers to call the DCA. The most common “topics of inquiry were “about how employees accrue sick leave hours and how much sick leave an employee has for use.”

The two-year New York City enforcement experience is dramatically different than that of Connecticut.  The DCA’s “PSL Facts” reports from April 1, 2014 tmoney-nychrough September 13, 2016 indicate that DCA has received 973 complaints. They have provided restitution of more than $2.5 million to about 14,500 employees. They have fined employees about $1.285 million. Comparing 2015 to 2016 through September 13, fines have increased nearly 160% and restitution has more than doubled. These percent increases represent quite a trend line and may be a harbinger of enforcement to come.

Benefits to Employers of NYC Earned Sick Time Act Have Not Materialized

If you are not familiar with Miles’ Law, let me introduce you to Rufus Miles. Miles, a federal employee in the 1950’s whose job involved reviewing budgets submitted by agencies, had a change in perspective about the budget review process when he moved to a position in which he needed to submit a budget for review. He moved from the reviewer to the reviewee, so to speak. “Where you stand depends on where you sit,” he supposedly observed and that has become his eponymous law.

A recent study of the first two years of the New York City Earned Sick Time Act concluded that “the effects of the paid sick days law on the business operations of New York City employers were far more modest than opponents had feared.”  Thus, the title of the study: “No Big Deal: The Impact of New York City’s Paid Sick Days Law on Employers.” It is a 32 page study, with charts and graphs, done by the Center for Economic and Policy Research of The City University of New York, and is well worth a read.

Like Miles, let’s have a change of perspective. Did the New York City Earned Sick Leave law deliver to employers the benefits its proponents touted?

The preamble of the NYC law states that the law will “foster greater employee retention and productivity” and reduce the number of employees reporting to work sick.17220-illustration-of-the-statue-of-liberty-pv-no-3

Concerning employee retention, the study found that “[v]irtually no employers reported any change in turnover.”

On productivity, the study observed that more than 94 percent of employers reported that “the paid sick days law had no effect on business’ productivity, while two percent of them reported that productivity increased. Only four percent of our respondents reported that productivity decreased.”

On reducing the number of sick employees reporting to work, the study found that “[m]ost employers (92 percent) reported no change in the spread of illness in the workplace, while nearly seven percent reported that the spread of illness decreased. Fully 90 percent of employer respondents reported no change in the number of employees coming to work sick, with equal numbers (five percent) reporting a decrease and an increase.” In other words, those that were asking customers, figuratively, “flu with your fries,” are still doing so.

The study does not report the ineluctable conclusion that the Earned Sick Time Act has not delivered to employers the benefits they were supposed to realize from it. Not a single one.

As my long time readers know, I am not opposed to paid sick days. Everyone gets sick from time to time. The challenge is that we now have forty jurisdictions and forty different laws requiring employers to provide paid sick leave. The compliance challenge for multi-location employers is significant.  We could also do without exaggerating the benefits of these laws to employers. While the sound bites sound good, those benefits have not materialized, at least not according to “No Big Deal,” and that is a big deal.