Will paid leave become mandatory in the near future? Sick leave for all workers is already the law in San Francisco, and proposals in favor of paid leave have shown up in such large bellwether states as Illinois, Minnesota, North Carolina, and Pennsylvania. In August, California’s state Senate Appropriations Committee effectively killed a sick-leave proposal for the remainder of the year. That generated praise from California’s chapter of the National Federation of Independent Business (NFIB).

“In the face of ... an unemployment rate of 6.9%, committee members saw the wisdom in not loading more burdens on California businesses,” says John Kabateck, executive director of NFIB’s California office. “Small-business budgets are like those of a family. When costs increase in one area, they’re forced to make cuts in other areas. Cutting other benefits, forgoing pay raises, reducing hours, or letting employees go are some of the difficult choices small-business owners would have been forced to make.”

Efforts to expand requirements for paid leave have been in the air since 1993, when the Federal Family and Medical Leave Act (FMLA) became the law. “Recently, it’s become more of a constant drumbeat,” says Susan Ackerly, vice president of federal public policy at the NFIB. “California and New Jersey have enacted a form of paid leave, and other states are thinking about it. At the federal level there are two different proposals for paid leave.”

A report by the NFIB Research Foundation shows the tax and administrative impact that mandated sick leave would have on businesses in California.
A report by the NFIB Research Foundation shows the tax and administrative impact that mandated sick leave would have on businesses in California.

Ackerly stresses that flexibility is the key for small businesses. A better path allows them to shape the kind of benefit plan that best suits the needs of their employees. “The well runs dry at some point for small-business owners,” she says. “If you say that a smaller employer should give seven days of paid sick leave, what happens to an employee’s vacation? Maybe he or she doesn’t get it.” In California alone, mandated paid sick leave would have taxed employers $4.6 billion and cost companies an estimated $59.3 billion in sales in the first five years of enactment.