California Chamber of Commerce Targets Meager Paid Sick Leave Bill

For a state whose politicians often obsess over being on the leading edge of progressive issues, California’s approach to paid sick leave has put it surprisingly behind the curve.

The current law — a minimum of three days or 24 hours per year for workers — only looks good in comparison with the majority of states that don’t mandate any paid leave at all. Among the 15 states (and the District of Columbia) that do, California’s nearly decade-old provision ranks last.

Plenty of employers offer more than three days of paid sick leave to their workers, of course, and some of the state’s population centers (Los Angeles, San Diego, San Francisco) have local ordinances that demand it. But on the state level, the fight to expand such provisions, so critical for lower-wage workers whose employers are unlikely to offer additional time off, has been a bruising one — and not even the lessons of the pandemic have changed that.

Witness the scrum over SB 616, which currently sits on Gov. Gavin Newsom’s desk awaiting approval or veto. The bill, by Sen. Lena Gonzalez (D-Long Beach), would change state law to require that workers be allowed 40 hours or five days of paid sick leave per year, putting California in line with most other states that require such leave.

The measure isn’t perfect; it’s not even what Gonzalez originally sought. As introduced, SB 616 would have increased paid sick leave from three days to seven, but that got hammered down to five days in a compromise after the powerful Assembly Appropriations Committee placed the bill on suspense, a procedural move that left it in danger of being shelved altogether.

Even in its watered-down form, though, the bill is the target of the California Chamber of Commerce, which placed SB 616 on its job killer list and is urging Newsom to veto it as a dangerous drag on businesses, especially those with small profit margins such as food and retail.

“Those businesses that can afford to offer more than three days of sick leave are doing so, but many, many businesses cannot absorb that cost,” the chamber said in a letter to Newsom opposing the measure that was provided to Capital & Main. “These mandated, increased labor costs will inevitably either be passed on to consumers as higher prices for goods and services, or force employers to reduce jobs or cut wages or other benefits.”

But does expanding paid sick leave cost businesses money — or save it? Research from the California Budget & Policy Center leans strongly toward the latter.

In a letter delivered to members of the Legislature in August, state policy analyst Hannah Orbach-Mandel noted that paid sick leave policies have been shown to reduce “presenteeism,” in which employees show up for work but aren’t fully functioning because they’re sick. Researchers at Drexel University’s LeBow College of Business, meanwhile, found that across the country, the introduction of state-level paid sick leave benefits led to a 6% increase in labor productivity and a 1.6% increase in firm profitability.

Enhanced paid sick leave may also reduce job turnover, Orbach-Mandel noted, which is a significant cost for businesses both large and small. According to the Washington Center for Equitable Growth, Seattle’s paid sick leave policy reduced such turnover for low-wage workers in small firms outside the food and accommodation industries by approximately 5% overall, and by more than 5% for those in short-term jobs — a subset of the full job market, to be sure, but also a description that fits hundreds of thousands of California residents.

Using paid sick leave can lessen the impact and duration of an illness, and it also may help reduce the transmission of viruses at work, health experts said. A study published last year in the journal Health Affairs found that state-mandated paid sick leave reduced emergency room visits by 5.6%.

The ravages of COVID-19 presented California with a test run on expanding sick leave provisions, with the state mandating up to 80 hours of paid time off for those dealing with the coronavirus. That measure was credited by backers of SB 616 with reducing some of the pandemic’s worst effects, especially on lower-wage workers, primarily Black and Latino, whose employers otherwise would never have offered the additional time off.

“We should ask ourselves: Do we want someone with a bad cough, whether it’s from COVID, the flu, RSV, pertussis, to be working in your childcare center, the classroom of your children, factories or nursing homes?” asked Dr. Curtis Chan, San Mateo County’s deputy health officer, in August in support of the bill. “Sick individuals must have time to rest, heal and isolate themselves from others.” The current provision of three days, Chan added, doesn’t allow for that.

Proponents of the measure feel optimistic that Newsom will sign it. But the governor has also expressed concerns about enacting measures that grow the state budget, which is facing a $31 billion deficit. The Los Angeles Times reported that implementing SB 616 would cost $34.6 million in its first year and $67.2 million annually after that, not including the costs of investigating complaints and enforcing the law.

Still, the stakes are high. “While California is set to become the world’s fourth-largest economy, the state lags behind” on expanding sick leave, Orbach-Mandel said. “Many California workers face the impossible decision of going to work while sick or losing their paycheck.”