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Benefits, costs of paid sick leave bill debated

A bill introduced by California Assemblywoman Lorena Gonzalez, D-San Diego, aims to cut health care costs and protect public safety by mandating that all employees get at least three days of paid sick leave a year.

Assembly Bill 1522 would require California employers to provide one hour of paid sick leave for every 30 hours of work. Employers can cap the amount of paid sick leave an employee receives annually at 24 hours, or three days.

“Both workers and their employers lose out when employees have to choose between reporting for work while sick or losing pay because they don’t,” Gonzalez said in a statement announcing the legislation.

“Every time this choice comes up for a sick employee, everyone loses money — whether it’s through unnecessary emergency room costs, the billions of dollars lost in productivity annually when sick employees try to work while under the weather, or lost wages that impact whether working families can put food on the table.”

According to Gonzalez's office, if all workers were allowed paid sick days, it is estimated that 1.3 million emergency room visits could be prevented each year in the United States, saving $1.1 billion in health care costs annually.

She said more than half of the savings — $517 million — would go to taxpayer-funded health insurance programs such as Medicare and the State Children’s Health Insurance Program.

Some labor and employment attorneys who represent management said the bill could have an adverse effect by increasing operational and administrative costs, forcing employers to cut payroll.

Some companies might even lower wages of current employees to compensate for the added costs.

"The irony is, the very employees intended to benefit from this — the universe of those employees may be diminished because of layoffs," said San Diego attorney John Engel, a shareholder with Sullivan Hill Lewin Rez & Engel.

The law would apply to all companies, regardless of size.

"For smaller companies that are still going to be subject to the law, they may face the prospect of having to downsize or reduce other benefits they provide," said David Monks, a partner in the San Diego office of Fisher & Phillips. "By having to give paid sick leave, that's going to require them to pay money. They may have to cut back elsewhere."

Luis Osuna, a workers' compensation attorney with Golper, Sullivan & Rivera, said concerns about the law reducing company payrolls are overstated.

"Several other cities across the country have similar legislation, and in those cases, most companies have reported little to no impact on their business or the benefits they're able to offer employees," he said.

"The bill's requirements are not that draconian for employers. The employee must have been working at the same place of employment for at least three months and the employer can cap the number of paid sick days at three for the whole year."

Gonzalez said providing paid sick leave could end up being more cost effective for employers and the national economy.

The freshman lawmaker said that when employees work when they are sick, it is estimated to cost the U.S. economy $160 billion in lost productivity each year.

She also said working people with paid sick days are more productive and less likely to leave their jobs, which saves businesses money by reducing turnover.

Proponents of the bill tout the benefit of keeping sick people at home and away from the general workforce, where they can spread their illness.

Gonzalez said that nearly three in four food service workers (73 percent) and workers in child care centers and nursing homes don’t have paid sick days, which poses a threat to public health.

When employees in the food service industry report to work sick, "they can expose not only other employees, but they can expose customers and patrons of their business," Osuna said.

Monks, the Fisher & Phillips attorney, said businesses understand the reasoning behind the bill.

"On the whole, I think it's more of a philosophical opposition by employers," Monks said. "They're saying, 'Hey, let me run my business the way I want.' They understand the potential good that could come out of it, including the public health aspect of it."

Sullivan Hill's Engel said the proposed legislation is not out of line with current employment practices.

"It's not that overbearing," he said. "There's no denying businesses are not going to like it because it creates a financial and administrative burden for them. There's no doubt employees benefited by it are going to love it."

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