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Paid Sick Leave (PSL) Q&A

What is PSL?

Paid Sick Leave (PSL) is an employee benefit in the form of paid leave which can be taken during periods of sickness, to attend doctor visits, or to take care of family members.  PSL has received a tremendous amount of attention in Florida due to the recent attempt to put mandatory paid sick leave on the November 2012 ballot in Orange County, FL.  Currently, there are no federal legal requirements for paid sick leave. Unpaid sick leave is required for companies subject to the Family and Medical Leave Act (FMLA).


Who is behind PSL, where did the issue originate from?

Florida is not the only state dealing with the issue of mandated paid sick leave.  In recent years, some cities have approved mandatory paid sick leave programs (San Francisco and Seattle) while others have rejected them (Denver and Philadelphia).  Citizens for a Greater Orange County organized the Orange County petition drive for mandatory paid sick leave, with strong support from The Restaurant Opportunities Center United (ROC) and local unions.

 
What happened in Orange County?

The proposal introduced in Orange County would have applied to all employees in the private sector that work at least 160 hours a year.  Businesses with fewer than 15 employees would be required to provide unpaid sick leave while those with more than 15 employees must provide a mandated paid sick leave.  All employees, whether full time, part time or temporary, would have been able to earn one hour of sick leave for every 37 hours of work, up to 56 hours of paid sick leave.  An employee would have been determined by those working full time, part time, and those provided by staffing agencies.  Any business that had at least 15 employees for at least 20 weeks in the previous calendar year must provide mandatory paid sick leave.  Numerous lawsuits were filed by business organizations to prevent the questionable language of the ballot initiative.  Finally, on September 11, 2012, the Orange County Commission voted to delay consideration of the measure (due to confusing ballot language), ensuring the paid sick leave initiative would not meet the September deadline for inclusion on the November ballot.


Since it won’t appear on the ballot isn’t the issue settled?

Even though mandatory PSL won’t appear on the November ballot in Orange County, the issue is far from over.  Orange County Commissioners will continue to discuss the issue in the months ahead.  Even with the failure of the Orange County ballot initiative, the issue is starting to spread to other counties in Florida.  ROC-Miami has already begun the process of gathering support for a new mandatory paid sick leave initiative in Miami /Dade County.  We expect to see many counties and cities throughout Florida battle this issue.

It seems fair to me, why should I care about mandated PSL?

On the surface, it is hard to oppose mandatory paid sick leave. However, simple economics informs us that there is no free lunch and there will always be costs associated with benefits.  For example, Lawrence Summers, former Secretary of Treasury under President Bill Clinton and Director of the National Economic Council for President Obama, concluded that mandated leave programs are likely to lead to lower wages (compensation) and less employment.  A study of the San Francisco program completed by the Institute for Women’s Policy Research (IWPR), who supports mandated paid sick leave, provides some insight into potential consequences of such a program.  Results of the study showed 65% of businesses forced to offer sick leave reported lower profits, while 43% reported reducing other forms of employee compensation as a result of the mandate. Businesses that voluntarily offered sick leave to employees prior to the mandate were excluded from the study.

Applying the results of the IWPR study of San Francisco to Orange County, Florida, 54% of all firms affected by the mandate would have likely seen reduced profits and 40% of employees would have experienced reductions in other forms of compensation. The estimated cost to businesses in Orange County, Florida was between $69.2 million and $82.3 million.  These results apply to the proposal presented to the Orange County Commission in Florida and only considered Orange County, not the entire state.

Below is an example of the potential loss to business.  The following example assumes that a business has 20 full time employees and 10 part time employees, all of which earn $10 an hour. In this example, 6 days of paid sick leave per employee per year was used.

20 full time employees and 10 part time employees x 6 days per year = 180 days
180 days at 8 hours a day = 1,440 hours lost
1,140 hours at $10.00 an hour = $14,400 lost
1,140 hours spent to make up hours of sick leave at $10.00 per hour = $14,400

Total dollars lost per year = $14,400 + $14,400 = $28,800

*The above example is based upon reasonable interpretation of the requirements from the proposed Orange County ballot initiative.


Why not let each county decide for itself?

With 67 counties in the state of Florida, there could potentially be 67 different PSL ordinances for businesses to follow. Many variables come into play that could be extremely burdensome on business. For example, if a business has locations in 30 counties in Florida, they could have 30 different PSL rules to follow. Preemption would guarantee that if a PSL mandate was ever passed, it would have to be at the state level with one law for all businesses in Florida to comply.


What happens now?

Get involved. The Florida Restaurant and Lodging Association is currently organizing a strong, united effort to help create positive legislation regarding this issue. Contact the Florida Restaurant and Lodging Association’s Government Relations team at (888) 372-9119 or email jreynolds@frla.org to join the preemption coalition.


Are preemption and prohibition the same thing?  Does preemption mean PSL can never become law?

No, they are not the same thing and FRLA is not trying to prohibit PSL. While FRLA opposes harmful regulation that hinders business, it supports streamlined legislation that creates an even playing field across the state. FRLA is working to pass preemptive legislation so if PSL is ever mandated; a fair law covering the entire state of Florida is put into place. Without preemption at the state level, the threat of 67 different paid sick leave county rules is real.

 How do I get involved?

  • Contact the Florida Restaurant and Lodging Association’s Government Relations team at 888.372.9119 or email jreynolds@frla.org to join the preemption coalition.
  • Attend Tourism Day in Tallahassee on March 13, 2013, to support your industry and speak face-to-face with your elected officials.
  • Support FRLA PAC to help elect business-friendly legislators.

 

Does a phone call or letter to my legislator really matter?

Yes! Letters and phone calls are vital in the legislative process.  Legislators must hear from individual owners and businesses explaining how critical the preemption of paid sick leave to the state level is toward maintaining jobs.  If a sick leave preemption bill is not passed in 2013, businesses could be subject to 67 different county ordinances. 

 

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