As Regions Implement Sick Leave Laws, Small Businesses See "Huge Learning Curve"

There’s no federal law requiring paid sick leave. But many cities and states are stepping in. Some small business owners say there’s a lot to learn, fast.

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When Minneapolis passed a paid sick leave ordinance, it sought to fill a gap for local workers. There’s no federal legal requirement for private companies to provide paid sick leave, and as much as 28% of workers don’t have paid sick leave. But nearly a year and half after the ordinance went into effect, several small businesses have been cited for failing to adhere to the regulation.

For some of these businesses, the issue isn’t one of ignoring the rule. Several small business owners say there’s a significant ramp up in knowledge and internal systems required to comply with new sick leave laws.

“I have no idea how other companies are doing this.”

Take, for instance, Chowgirls Killer Catering, which employs up to 100 active employees depending on season. The company provided paid sick leave to salaried employees, but not hourly workers prior to the ordinance. “There was definitely a huge learning curve in just understanding the policy,” says Jillian Osborne, general manager of Chowgirls Killer Catering.

Osborne says she went to many sessions put on by the city’s chamber of commerce. She relied on their information to help interpret the law. But even though she was proactive, there were additional challenges for scheduling and tracking.

“The most frightening thing was how are we going to track these hours,” Osborne says, noting the caterer needed the help of an internal IT developer to program a system where hours are imported from payroll into the proprietary database and provide information on each employee’s banked sick and safe days.

“I have no idea how other companies are doing this,” she says.

Minneapolis serves as a microcosm for municipalities debating or implementing paid sick leave laws. More than 35 cities or counties and 11 states have passed laws requiring companies to provide paid sick and safe leave for employees.

Those cities and states often face legal battles, uncertainty about timelines and fines, and updates to work processes. In Austin, TX, a similar city ordinance was blocked from implementation in a legal fight. Another legal battle is roiling businesses in Pittsburgh, PA. In Chicago, IL, which instituted an ordinance around the same time as Minneapolis, some business owners worried about added costs and compliance issues.

Minneapolis is not immune to the obstacles around paid sick leave. The ordinance faced its own legal hurdles. And some businesses struggled to fully understand the regulations.

956 businesses have contacted the City of Minneapolis Civil Rights Department with questions about the ordinance. Brian Walsh, supervisor, labor standards, at the Civil Rights Department, says the city is using a soft touch approach for businesses that are confused.

“The Civil Rights Department does not take enforcement action against a business that reaches out to it proactively, requesting technical assistance and working in good faith to ensure compliance,” he says. “During the first year of enforcement, until July 2018, warnings were issued following investigations of first-time violations not involving retaliation.”

Data suggests workers won’t necessarily call in sick more frequently because of local ordinances granting paid leave.

The average worker in San Francisco, where employees receive up to nine days of paid sick leave per year, takes only three of those days, according to a study by the Institute for Women’s Policy Research. The Center for Economic and Policy Research found that the average worker affected by New York City’s paid sick leave policies also takes only three paid sick days per year.

For Osborne, despite the initial confusion and costs, she supports Minneapolis’s efforts to extend paid sick days across the workforce.

“It’s been a positive experience for us knowing our hourly employees, the ones usually most forgotten, are being looked after,” she says. “It’s important to invest in employees…It’s money well spent.”

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