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AIM: Mandated Sick Days will Stifle Innovation, Cost Jobs

Posted by John Regan on Sep 24, 2013 4:17:00 PM

Legislation mandating paid sick leave in Massachusetts would stifle innovative employer benefit programs, reduce overall benefit levels for workers and prompt businesses to avoid creating new jobs here, AIM told a Beacon Hill hearing today.

State House“While many supporters of these bills claim that they are filed in the interest of the employer community and that their passage will make for a more productive workforce, AIM believes that decisions regarding any benefit provided to employees should be left to the discretion of the individual employer based on economic circumstances, the size of the company, the nature of the employment relationship with each employee and the competitive environment,” AIM Vice President of Government Affairs Bradley MacDougall wrote in testimony to the Joint Committee on Labor and Workforce Development.

AIM opposes two bills that would require Massachusetts companies with more than six employees to provide paid sick time. The association and thousands of its employer members who already offer sick time voiced opposition to similar legislation last year that Legislators eventually sent to a study.

Advocates are now working to put the question on the 2014 statewide ballot.

The sick leave proposals would mandate that businesses with fewer than six employees offer up to 40 hours of unpaid time to workers. Businesses with six to 10 employees would be required to offer up to 40 hours of paid sick time, and businesses with more than 10 employees would be required to offer up to 56 hours of paid sick time.

Employees would be eligible for an hour of sick time for every 30 hours worked. Employers with more than 10 workers would be required to comply with the proposal within six months, and all others would have a year to conform their policies to those required in the bill.

The bill would leave an employer with 20 workers facing up to 140 lost work days per year due to state-mandated paid days alone, in addition to the holidays, vacations and personal days currently provided. And all companies would have to administer the law the same way - for example, the law would make attendance incentive policies unlawful.

MacDougall said the proposed mandates would eliminate popular benefits such as paid time off, which combines all paid time off (vacation holidays, sick time, and personal time) into one “bank” of days that can be managed and used by the employee for any purpose without reporting the specific reason.

The mandates would also strain the financial capacity of many employers.

“Reality is those Massachusetts employers have limited resources.  This proposed legislation would have a ripple effect and most immediately impacting Massachusetts families and employees by lost hourly work, decreased benefits or job loss,” MacDougall said.

“Long-term, Massachusetts would be a place where companies will avoid creating jobs or worst will leave.”

A manufacturing company in western Massachusetts maintained that competitive employers already provide generous benefits to workers: 

“Ultimately, the customer is everybody's boss, and company management and company employees are partners in meeting customers' needs.  In this regard company owners and managers are very much aware of how important a part the overall wellbeing of company employees plays in this equation and they do as much as they possibly can, given the economic constraints of the marketplace, to offer a comprehensive employee compensation package that will provide a solid standard of wellbeing for all employees,” the employer said.

Topics: Issues, Employment Law, Paid Sick Days

Legislature Tables Mandated Paid Sick Days for this Year

Posted by Brad MacDougall on Jul 6, 2012 10:47:00 AM

Beacon Hill lawmakers appear to have killed for this year a bill that would have required Massachusetts companies with more than six employees to provide paid sick time.

Paid Sick DaysThe Joint Committee on Health Care Financing sent the proposal to a study, a step that makes it difficult, though not impossible, for the bill to win approval before the Legislature ends formal sessions on July 31.

Associated Industries of Massachusetts (AIM) commends the Health Care Financing Committee for setting aside a measure that could impose crippling productivity challenges for employers still wrestling with a balky economy. AIM member employers sent more than 2,000 messages to legislators opposing the paid sick says proposal.

 “The Legislature has done the right thing for thousands of employers, particularly small businesses, working in through a difficult economy to expand and create jobs,” said John Regan, Executive Vice President of Government Affairs for AIM.

“Employers will remain vigilant to ensure that no similar paid leave proposal is enacted before the end of the session.”

Supporters of mandated paid leave have vowed to re-introduce the proposal when the Legislature begins its 2013-2014 session in January.

AIM and thousands of employers who already provide paid sick time have opposed sick-time mandates because they would take away the flexibility they need to design innovative benefit programs. Decisions regarding any benefit provided to employees should be left to the discretion of the employer based upon economic circumstances, the size of the company, the nature of the employment relationship with each employee and the competitive environment.

The sick leave proposal would have required businesses with fewer than six employees to offer up to 40 hours of unpaid time to workers. Businesses with six to 10 employees would have been required to offer up to 40 hours of paid sick time, and businesses with more than 10 employees would have been required to offer up to 56 hours of paid sick time.

Employees would have been eligible for an hour of sick time for every 30 hours worked. Employers with more than 10 workers would have been required to comply with the proposal within six months, and all others would have a year to conform their policies to those required in the bill.

The bill would have left an employer with 20 workers facing up to 140 lost work days per year due to state-mandated paid days alone, in addition to the holidays, vacations and personal days currently provided.

Originally sponsored by Rep. Kay Khan and Sen. Patricia Jehlen, the paid sick leave bill (H 3995) was redrafted by Rep. Cheryl Coakley-Rivera and released favorably this year from the Labor and Workforce Development Committee co-chaired by the Springfield Democrat.

Topics: Issues, Employment Law, Paid Sick Days

Bills Pose Threat to Employers as Lawmakers Wrap Up Formal Sessions

Posted by Brad MacDougall on Jul 5, 2012 11:17:00 AM

A variety of troubling proposals that threaten to impede an already slow economic recovery remain up for debate as the Massachusetts Legislature prepares to end formal sessions on July 31.

Massachusetts LegislatureAIM has consistently opposed proposals that would place costs, burdens and challenges on ability of employers to retain and grow jobs in the commonwealth. Cost burdens are especially dangerous at a time when confidence among Massachusetts employers took its second-largest one-month drop in history during June.

Three pending bills raise particular concern:

  1. Mandatory paid sick days - A redrafted mandated sick-time bill would require companies with fewer than six employees to provide unpaid sick time, and all other employers to offer paid sick time. The bill comes with a host of new workplace regulations. (Read AIM’s blogs)
  2. Workplace bullying – A bill that vaguely seeks to define “workplace bullying, mobbing and harassment” would stifle normal workplace coaching and critiques and invite frivolous litigation.
  3. Weakening of non-competition agreements – Various bills would weaken an employer’s ability to protect business and trade secrets through private-party contracts such as non-compete agreements.  The current legal protections are particularly important here in Massachusetts, where technology and innovation fuel a significant share of economic growth. (Read AIM’s blogs)

Not exactly the sort of bills you would include as part of an effective strategy to encourage job creators to invest in Massachusetts.  These proposals would, in fact, cause just the sort of bureaucratic tangle that discourages employers from adding the jobs that thousands of unemployed residents of the commonwealth so desperately need.

Let’s not give Massachusetts employers and (companies seeking to locate and invest in here) a reason to leave or say “No thanks” to Massachusetts.  Our collective efforts must be focused on job creation public policy for the residents of the commonwealth.

To learn more about these and other HR-employment legislative proposals pending before the Legislature please contact Bradley A. MacDougall by email (bmacdougall@aimnet.org) or calling 617-262-1180.

Topics: Workplace Bullying, Massachusetts Legislature, Issues, Non-Compete Agreements, Paid Sick Days

Legislative Committee Approves Redrafted Paid Sick-Time Bill

Posted by Brad MacDougall on Mar 13, 2012 3:11:00 PM

A legislative committee has approved a redrafted mandated sick-time bill that would require companies with fewer than six employees to provide unpaid sick time, and all other employers to offer paid sick time.

Paid Sick TimeMembers of the Joint Committee on Labor and Workforce Development issued their positive report on An Act Establishing Earned Paid Sick Time on Thursday. The bill now faces additional review by other legislative committees.

AIM plans to review details of the bill and make a formal recommendation to member employers. The association testified against the original version of the bill, which would have required all Massachusetts employers to provide paid sick days.

The revised proposal would require businesses with fewer than six employees to offer up to 40 hours of unpaid time to workers. Businesses with six to 10 employees would be required to offer up to 40 hours of paid sick time, and businesses with more than 10 employees would be required to offer up to 56 hours of paid sick time.

Employees would be eligible for an hour of sick time for every 30 hours worked. Employers with more than 10 workers would be required to comply with the proposal within six months, and all others would have a year to conform their policies to those required in the bill.

A summary of the bill indicates that employers would be prohibited from disciplining workers for using earned sick leave. Employers would also be barred from requiring workers who use paid sick time to take on additional shifts.

AIM and thousands of employers who already provide paid sick time have opposed sick-time mandates because they would take away the flexibility they need to design innovative benefit programs. Decisions regarding any benefit provided to employees should be left to the discretion of the employer based upon economic circumstances, the size of the company, the nature of the employment relationship with each employee and the competitive environment.

A mandate could also impose crippling productivity challenges for employers as they scramble to replace people on paid leave. An employer with 20 workers would face up to 140 lost work days per year due to state-mandated paid days alone, in addition to the holidays, vacations and personal days currently provided.

AIM members interested in more information about the pending employment-law bills may contact me at 617.262.1180, or bmacdougall@aimnet.org

Topics: Issues, Employment Law, Paid Sick Days, Mandated Paid Sick Days

T Leave Scandal Provides Cautionary Tale on Paid Sick Days

Posted by Karen Choi on Aug 24, 2011 10:50:00 AM

A recent investigation by the MBTA that found massive abuse of the federal Family and Medical Leave Act (FMLA) by T bus drivers provides a cautionary tale to state lawmakers as they debate mandated paid sick days.

Paid Sick DaysThe MBTA report found that the agency paid $2 million during past fiscal year in overtime costs to cover absent bus drivers taking fraudulent FMLA leave, referred to among employees as the “Friday-Monday Leave Act.”  The report indicated that 1,600 bus drivers took a total average of 18,125 days each year during the five-year period between 2006-2010 using the FMLA benefit after the agency cracked down on suspected abuse of sick days.

Drivers averaged more than 11,000 paid sick days each year in addition to the FMLA leave.  In recent months more than a dozen MBTA employees have been fired for submitting fraudulent notes or falsifying medical documents and forging signatures on stolen medical forms.

The $2 million FMLA tab was up $250,000 from the previous fiscal year.

Sick leave provides a level of income protection to employees in the event of accident or illness.  The majority of employers who offer sick leave provide this benefit to employees on a non-vested basis, meaning the paid leave is available to the employee if needed, but is not paid out at termination or rolled over from one year to the next.

A smaller percentage of companies allow employees to roll over some portion of unused sick leave from one year to the next; or allow employees to cash out a percent of unused sick leave annually.  Some companies may even offer significant flexibility, while not having a formally defined sick leave policy.

While employers struggle to make payroll, address skyrocketing health-care premiums and remain competitive during this jobless summer, labor unions and other advocates continue to push a mandated paid-leave proposal that would remove employer flexibility and choice under the guise that it is “good for business.”  Mandated paid sick leave introduces a host of  issues for employers throughout Massachusetts:

  • At companies that already offer paid sick leave, the benefit will change from being a safety net to an entitlement, one that carries forward from one year to the next.
  • Companies will likely experience an increase in the number of unplanned absences.  Employees using sick leave for non-sick related absences strain companies by impacting production and increasing costs related to overtime needed to backfill unplanned absences.  When an employee takes vacation or personal time, they schedule the absence in advance, allowing the company to staff to cover the absence.  Because sick leave is most often an unplanned absence, companies are left scrambling to cover the absence.
  • Companies looking to control abuse will become the “sick leave police” developing practices to monitor sick leave usage, including requiring doctors notes and monitoring Friday/Monday absences
  • Employers who have migrated to Paid Time Off banks will need to address what portion of their PTO program is identified as sick leave.  PTO programs may need to be modified to comply with the mandate.
  • Small employers would feel the impact most directly because they are more likely than large enterprises to not offer paid sick leave, or to offer limited sick leave or flexibility.
  • Employees may see attendance bonus programs disappear because providing the bonus and allowing unused sick time rollover from one year to the next results in double payment.

Employers have a finite amount of money available for total compensation, including base pay, incentives, insurances, payroll taxes, time off and a host of other benefits.  The budget is the budget.  So if Massachusetts mandates seven paid sick days, employees may be faced with cutbacks in other areas to fund this new mandate.  Whether the impact is in jobs, merit budgets, insurance premiums and co-payments or staff training and development opportunities – rest assured there is a shared cost to both the employer and employee.

Bottom line, this case shows that MBTA customers and Massachusetts taxpayers are left with a hefty bill for a debt-ridden agency. They are also left with a stark example of the way in which this type of policy changes employee perception of sick leave from using it to cover absences related to illness or injury to using it for personal time or pleasure. 

So how would your company react if Massachusetts mandated seven paid sick days?

Click me

Topics: Family and Medical Leave Act, Paid Sick Days, Mandated Paid Sick Days

Paid Sick Days Proposal is Anti-Jobs, Anti-Choice

Posted by Brad MacDougall on Jul 14, 2011 10:43:00 AM

AIM will speak at a Beacon Hill hearing today on behalf of thousands of Massachusetts employers who fear that a proposal to mandate paid sick leave will crush their ability to create jobs.

Paid Sick DaysThe association will tell members of the Legislature’s Joint Committee on Labor and Workforce Development that employers do not oppose paid sick leave as an employee benefit.  They instead oppose the mandatory nature of the legislation and believe that decisions regarding any employee benefit provided to employees are best left to the discretion of the individual employer.

Employers themselves provide the clearest evidence of the potential harm that yet another mandated benefit would cause for businesses both large and small. Here are excerpts from some of the 800 messages AIM members have sent to the Legislature:

“I hope to grow jobs for individuals and families. However, mandatory paid sick leave erases any serious hope for future job growth and threatens our ability to remain competitive in Massachusetts. Throughout this recession my company has struggled to retain jobs and benefits. This bill would make it more expensive to do business and would limit our ability to create benefit policies that accommodate our workforce and their families. In fact, this type of policy effectively takes choice away from our employees and their families.”

“As an employer of more than 60 office and factory workers we have always tried to provide our employees the best, affordable health care insurance as well as provisions for illnesses. We feel that the circumstances and capability of each company differ and that some provisions to benefit employees are better determined by the individual employers. As such, a provision to require up to seven sick days, no matter how written, is likely to put the burden of an additional seven days of employee absence on every employer.”

“Our company has been located in Massachusetts for the past 35 years. We have been successful even though our cost structures as a result of our location have been higher than most of our competitors located in other areas of the country. During this recession, we have been able to maintain our workforce, and have not resorted to job cuts, reduction in employee benefits, or other measures that would negatively impact our employees. We have always offered paid sick leave of five days. However, that has been our choice, not a mandate from the state. We object to having the state legislature determine what benefits we must offer, and at what cost. As we see more proposed costs in the form of state mandates, along with some of the highest energy costs in the nation, and as we see the potential for continued growth in our business being stymied by these costs, we will have to consider whether we will be able to be more competitive in a different geographical location.”

“My husband and I own a manufacturing plant. Over the last year we have gone from 15 employees down to 5 but we have managed to survive. We currently offer our employees health insurance for individuals and families of which we pay 70 percent. We pay 100 percent for life insurance and STD for all our employees. We give them up to two weeks paid vacation every year, 10 paid holidays and paid bereavement time if required. At our current rate of pay the addition of paid sick time will add another $2,100 per employee to our annual expenses. Passing this bill will cause businesses to look elsewhere for a more business friendly location.  Who benefits by forcing more business to close or leave the state?”

“Employers have enough challenges just trying to survive and provide good benefits for employees without having additional challenges like this in the mixture.”

“If the Commonwealth continues with the never-ending increases in the costs of doing business here, it will become the only employer within its borders. I wonder how many people are interested in buying products generated by the Commonwealth of Massachusetts.”

“Mandatory paid sick leave legislation is simply anti-choice and anti-jobs. When corporations grow their businesses and require additional employees to conduct those businesses, corporations have a choice as to where to employ any additional employees. The type of legislation that is being proposed will drive a corporation to locate its new employment opportunities outside Massachusetts.”

“Our company employs more than two hundred full-time people.  We pride ourselves on the strong, positive, relationships we enjoy with our employees.  Most of our employees have worked at our company for many years, often for most of their working lives.  Company owners and managers are very much aware of how important a part the overall wellbeing of company employees plays in this equation and they do as much as they possibly can, given the economic constraints of the marketplace, to offer a comprehensive employee compensation package that will provide a solid standard of wellbeing for all employees.”

Topics: Massachusetts Legislature, Employment Law, Paid Sick Days, Mandated Paid Sick Days

Employers to Discuss Key Issues with Massachusetts Policymakers

Posted by Christopher Geehern on Jun 6, 2011 1:37:00 PM

Some of the most troublesome employment-law issues facing Massachusetts companies – including independent contractor classification and proposed mandated sick leave – will be on the table Thursday when AIM members meet with Secretary of Labor Joanne Goldstein and two senior Massachusetts lawmakers at the State House.

Massachusetts State HouseThe second annual AIM State House Roundtable will give employers a unique opportunity to speak directly about business issues with the Patrick Administration’s point person on labor and employment law, along with House Ways and Means Committee Chairman Brian Dempsey, and Senator Michael Rodrigues.

“Employers frequently express their concern to us about issues such as treble damages, rules governing classification of employees and proposals to mandate sick leave and family leave,” said Tom Jones, Vice President in the AIM Employer’s Resource Group.

“Public officials need to hear these concerns as they develop policies to promote business growth and job creation. The State House Roundtable provides the perfect setting to do that.”

Goldstein in April expressed strong support for identical bills offered by Sen. Patricia Jehlen (D-Somerville) and Rep. Kay Khan (D-Newton) that would enable the 1.5 million workers in Massachusetts who currently lack paid sick days to earn an hour of paid sick time for every 30 hours worked and up to seven paid sick days a year. Under the proposals, employees who earn sick time would be able to use it to care for themselves, a child, spouse or other immediate family members.

The secretary called mandatory seven paid sick days “a basic right.”

AIM opposes mandatory sick days. The association believes decisions about time off and other benefits should be left to employers and their workers.

Dempsey authored a proposed state budget for Fiscal Year 2012 that avoided new taxes, gave cities and towns the power to control health insurance costs, placed the Workforce Training Fund into a trust and narrowed the scope of the onerous 2008 treble damages law. The Senate did not immediately follow suit on the treble damages provision, which would have limited mandatory awards to triple damages to cases in which employers willfully violated the Massachusetts wage and hour low.

The State House Roundtable will take place from 1-5 p.m. Participants will then return to the AIM Boston office for a networking reception.

Topics: AIM State House Roundtable, Associated Industries of Massachusetts, Employment Law, Massachusetts employers, Paid Sick Days, Mandated Paid Sick Days

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