What you need to know about New Jersey's push to mandate paid leave

Date: June 24, 2016

Shouldn’t we trust New Jersey’s small business owners to decide what is best for their employees and their business?

Mandatory Paid Leave Legislation, S799 was introduced in January and was passed by the Assembly earlier this year. The Senate recently amended the bill to exclude small business with less than ten employees and is expected to vote on the legislation during the week of June 27. We’ll keep you updated on the date of the vote.   Although a version of this bill failed to pass last session because of a disagreement between the Assembly and Senate, we expect this bill to receive strong support. It’s important that you contact your Senator today and ask him/her to oppose this bill.

S799 would institute paid leave statewide and would:

  • Mandate that workers accumulate an hour of time off for every 30 hours worked
  • Require companies with more than 10 workers to offer at least 72 hours of leave

While most advocates of sick leave mandates are probably well-intentioned, the data from both supporters and opponents of the policy indicate that a wide gap exists between intentions and results.  A recently released Freedom Foundation report critically examines all of the major studies on the impact of paid sick leave.

 

Some of the report’s significant findings include:

  • Paid sick leave mandates fail to decrease sickness in the workplace. Of the five studies to examine the effect of mandatory paid sick leave laws on presenteeism, defined as the frequency of employees coming to work sick, four found no reduction. Only one questionable study of Connecticut’s law found any reduction in presenteeism.
  •  Mandatory paid sick leave laws do nothing to reduce turnover. The evidence used by advocates to assert that mandatory sick leave laws reduce employee turnover, thus saving businesses money, is surprisingly weak. One problematic study of Connecticut’s paid sick leave law reported a slight decrease in turnover, while a more credible study of Seattle’s paid sick leave ordinance reported effectively no changes in turnover.
  • Studies misrepresent employer support for mandatory paid sick leave laws. All four of the studies that asked employers whether they supported the mandate found a majority of employers were supportive. In each case, however, a similar number of employers were already mostly or completely in compliance with the law and had to make few changes in response. Most businesses that had to create new or modify existing policies appear to be opposed to paid sick leave mandates.
  • Consumers, workers and employers are all negatively affected by mandatory paid sick leave policies. Employer surveys indicate that affected businesses frequently respond to paid sick leave laws by increasing prices, decreasing employee benefits and hours, and limiting expansion. Even after taking steps to offset the additional expenses, many businesses report reduced profitability. Unsurprisingly, the negative consequences of paid sick leave mandates are concentrated among firms that have to implement new or modify existing paid sick leave policies.

The report, “The Effect of Mandatory Paid Sick Leave Policies: Reviewing the Evidence,” can be viewed in its entirety on the Freedom Foundation’s website.

The Problems with Mandating Paid Leave:

  • In talking with several NFIB/NJ members we’ve heard complete opposition to this bill which will remove flexibility from employers.
  • Many business owners that we spoke with say that this legislation will force them to reduce the amount of vacation time and other “perks” that they currently offer. 
  • These types of proposals ignore the fact that most small business owners already arrange for their employees to take time off as needed, whether for illness or for a family emergency. Most employers in New Jersey already offer some type of paid leave for full-time employees; they just don’t compartmentalize the benefit into vacation days, sick days, or family leave. A nation-wide study conducted by the NFIB Research Foundation found that 73 percent of all small firms offered paid time off to their full-time workers. Among them, 67 percent offer two weeks or more.
  • The reality for New Jersey small businesses is that most owners compete for qualified employees by offering flexibility to balance family and work. 

TAKE ACTION – Contact your legislators today and ask them to vote no on mandated paid leave

 

Related Content: Small Business News | New Jersey

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