Paid sick leave debate heats up
By Ed Sealover
Denver Business Journal
A study arguing that a paid sick leave ordinance on the Denver city ballot in November will not hurt businesses was released by a liberal think-tank on Monday, the same day a coalition of independent restaurants rallied in opposition to Initiative 300.
The Bell Policy Center collected research from several studies in cities that already have paid sick leave laws and concluded that employer costs would rise only slightly because of the ordinance and could be offset by unknown savings that result from a healthier work force. The law also could reduce turnover if workers do not have to choose between going to work sick or losing their jobs, the study said.
"We are convinced a paid sick leave law will greatly benefit workers and their families, as well as overall public health," said Wade Buchanan, Bell Policy Center president, in a news release. "And we are confident it can be implemented with little to no harm to businesses."
But restaurant owners and workers, who rallied in Skyline Park in downtown Denver, said the study was full of inaccurate assumptions, beginning with the erroneous belief that business owners actually fire workers who call in to take an unpaid sick day off. They also argued that the narrow requirements in Initiative 300 will strip them of the flexibility to allow workers to trade shifts, and require them to overstaff and lose money in anticipation of a worker calling in sick at the last minute.
"It hurts our small businesses, it makes it harder for people to get back to work when unemployment in Denver is nearly 9 percent and it makes it hard to run a small business," said Leigh Jones, owner of Jonesy's EatBar at 400 E. 20th Ave. and incoming president of EatDenver, an organization of locally owned restaurants.
The tit-for-tat is the latest brush-up in the debate over an initiative that has passed in similar versions in San Francisco, Washington, D.C., and Seattle. Initiative 300 would require all businesses in Denver to offer one day of paid sick leave for every 30 hours an employee works, capped at nine paid sick days a year for businesses of 10 or more employees and five paid days off for smaller companies.
The Bell Center relies largely on findings from San Francisco, which implemented a paid sick leave law in 2007. Among the findings are:
• San Francisco workers have used an average of only three paid sick days a year. But even if companies budget for five more paid days per worker in addition to the average 250 days per year that employees work, that only increases pay costs by 2 percent.
• A Cornell University study found that presenteeism - the decreased level of productivity offered by sick workers - costs more than twice as much as the average annual per-employee costs for medical care. Offering paid sick days will decrease presenteeism, proponents argue.
• A 2010 Drum Major Institute report found that total employment in San Francisco increased by 3.5 percent from second quarter 2006 to second quarter 2010, while employment increased 3.4 percent in that time in surrounding counties that did not require paid sick leave. Buchanan argued this shows such a policy does not push new jobs out of town.
"The experience in cities that already have paid-sick-leave laws shows the costs to businesses are modest and manageable – and largely offset by improved productivity and reduced turnover," Buchanan said in a release.
But opponents questioned several major assumptions.
Josh Wolkon, owner of Steuben's and Vesta Dipping Grill restaurants in Denver and employer of about 170 workers, said he does not offer paid sick leave, yet does give retirement benefits and has a staff with low turnover – more than 50 percent of his workers have been with him for five years. Initiative 300 would take away his ability to be flexible with employees and put into place a rigid rules system that would increase his expenses, he said.
Adam Schlegel, co-owner of Snooze Eatery, said he already sends people home if they are sick, giving them a chance to heal without sickening customers and making sure they have future shifts.
And Pete Meersman, president/CEO of the Colorado Restaurant Association, said that because restaurants make their reputations and profits on customer service, they go out of their way to work with good employees and not threaten to get rid of them when they feel ill, as proponents of Initiative 300 would have people believe.
"People aren't getting fired because they're calling in sick ... They're trading shifts. They may be asked to call in ahead of time," Meersman said. "[Initiative backers] are trying to scare people into voting for this."