At first glance, one might conclude that requiring employers to provide nine days of paid sick leave to employees is good idea. After all, everyone gets sick, right? What’s left out of the discussion by the City of Milwaukee Common Council – the latest municipality trying to impose its will on private business – is the cost to employers and the real impact this mandate will have on employees and their benefits.
The City of Milwaukee wants to mandate that private employers with 10 or more employees provide nine paid sick days (or 72 hours) a year to each and every worker. For employers with less than 10 employees (and for part-time employees), it’s five paid sick days (or 40 hours).
Nine days – paid days – free days if you’re not sick or just want a day off and prefer not to use vacation days. Sounds pretty good, doesn’t it? But it’s not free for the employer – the one who writes your paycheck and decides what level of benefits you will receive (i.e. vacation time, insurance plan and contributions, retirement, etc.) – and ultimately not free for employees.
For any employer, there is a finite amount of income that is earmarked for labor and fringe benefits. Just because the city mandates an increase in a certain fringe benefit like sick days, doesn’t mean there is a magical pot of money that the employer can dip into to pay for that extra sick time.
The mandate will simply make the employer shift the same earmarked money around so that it can accommodate the new requirement. This new law will provide the employer with few options. These include reducing the number employees, reducing the number of vacation days, reducing the employer contribution of the employees health insurance plan, reducing the employer contribution of the employees retirement plan or they may simply eliminate vacation altogether and move to a PTO (personal time off) system, where you’ll be given a block of days and whatever you use them for is your own business.
If you’re sick, or your kids are sick, you’ll have to dip into the same pool of paid days off as you would for vacation. So, instead of being offered two weeks of vacation and five sick days a year, you’ll see something like 15 PTO days.
And let’s not simply gloss over the fact that the city wants to impose this only on private business, not on the city itself. In fact, it wouldn’t apply to ANY government entity. The analysis – done by the city – of the proposed ordinance states plainly: "The requirements of this ordinance apply to all employers within the city except the federal government, the state of Wisconsin, including any office, department, agency, authority, institution, association, society, or other body of the state, including the legislative, and judiciary, or county or local government."
So what’s good for the goose is not necessarily good for the gander, it seems. If this were such a good idea, why then would the city not require itself and government institutions within Milwaukee to provide the same sick-leave policy? Could be because they did the math and hope you won’t.
Brad Briney is president of the Independent Business Association of Wisconsin (IBAW), Wisconsin’s oldest state based business association concentrating on issues facing small and independent businesses. Additional information is available at www.ibaw.com Briney is a commercial banker with JP Morgan Chase. The question about a city-mandated paid sick leave policy on private businesses will be asked in a binding citizen referendum on the ballot in the Nov. 4 election.
