Sick Leave Benefits for Local Government Employees Part 1: An Overview

Recently, there has been a surge of interest on the West Coast in the pros and cons of paid sick leave benefits for employees.  This issue was hotly debated in 2014 by both the California and Washington State Legislatures.  In Washington State, the bill that would have required businesses with more than 5 employees to provide paid sick leave (from 40 to 72 hours per year) was passed by the House but died in the Senate.  Meanwhile, the California Healthy Workplaces, Healthy Families Act of 2014 was passed requiring California employers for the first time to provide paid sick days (up to 69.33 hours per year) to employees effective July 1, 2015. 

There are no federal laws yet that require either public or private employers to provide paid sick leave for their employees.  This is currently a matter for the states to decide.  While some employers do not provide a stand-alone paid sick leave benefit, many employers do.  President Obama has recently gone live promoting paid sick leave benefits.

I will be addressing this topic in four separate blog posts, including this initial introductory post.

The second post will identify issues to think about and questions to discuss regarding paid sick leave benefits.  It will look at the benefits, challenges, costs, issues and various approaches to address to this subject.   This writer recognizes paid leave for employee illness/injury in some form is an important and quantifiable benefit in the total compensation package offered by the employer (usually the value of paid sick leave ranges from 1% to 4% of the 100% compensation package).  

Most readers can agree that an essential job requirement for any employee is showing up.  Employers providing paid sick leave do so because they believe it is good business, helps recruit trained workers, provides economic security to employees, and trust that most employees will use their paid sick leave for the purpose intended.  However, some employees appear to “game” the system, feeling entitled to use their paid sick leave for other purposes than intended, giving paid sick leave a “black eye.”  Some employers view paid sick leave as an expense to avoid because of the cost, the potential for abuse, and choose to extend other benefits to employees or “pooled” leave programs rather than offer paid sick leave.   What is your opinion?  Do you have data to back it up?

Of those employers that do offer paid sick leave, there is a wide variance as to (1) how much sick leave can be earned in a year, (2) the amount that can be carried forward if not used, (3) the maximum accrual allowed, and (4) the percentage of the employee’s wage replaced when the employee (or member of the employee’s immediate family) is incapacitated (ranging from 50% to 100% of the employee’s wage by global standards).  Likewise, there is a wide variance as to (1) how much of the employee’s accrued but unused sick leave is cashed out, (2) when the cashout benefit is received, (3) when converted to vacation leave or paid into a tax-sheltered account, (4) what cashout is available when the employee separates or retires (ranging from 10% to 100% of sick leave hours not used). 

Not surprising, practices between the public and private sector in the USA are often quite different, as are practices around the globe.  According to the Bureau of Labor Statistics only 61% of private employers in the USA provide paid sick leave accruals to their employees.^[1]  About 90% of public employers do so.  Those employers who do not provide stand-alone sick leave programs often provide paid time off (PTO) programs combining vacation and sick leave into one pool. 

A comprehensive approach is needed to sustain paid sick leave policies and address excessive absenteeism. The next installment will include approaches employers think are working and those not working, recommendations and sample strategies in place as a result of collective bargaining or employer updates to HR policies.  An employer should evaluate their paid sick leave policies, train supervisors and use a data-driven system and not just a program to address absenteeism issues and change employee behavior.   This often calls for a “carrot” and “stick” approach, a combination of incentives for good attendance and sanctions for excessive use of paid sick leave.

One of the most complete listings of considerations for effective sick leave policies will be provided which include effective tracking, reporting, and accountability systems and attendance incentives.  Management and labor leaders are encouraged to partner and consider going through a step-by-step exercise to test the effectiveness of paid sick leave policies.  This exercise is designed to lead to a better system tailored to the specific organization and make-up of its workforce.  If you have a particular sick leave program or attendance incentive system that you think is working well and want to share with our readers, please send to Byron Katsuyama, Public Policy & Management Consultant, at MRSC.  “Best Practices” samples can be included in future installments on this topic.

 Based on my experience, this is a subject employers and unions have often avoided at the bargaining table (other than negotiating increases to sick leave benefits or pay-outs for non-use of the benefit in corrections officer, law enforcement officer or firefighter contracts).  Unfortunately, such concessions are often made with good intentions but do not always accomplish the intended results.^[2]