Friday, January 13, 2006

Lunchtime Notes: Mandatory Sick Leave, Not So Bad for Madison After All?

by Tom Bozzo

The enormous-type above-the-fold headline in this morning's Wisconsin State Journal blared, "Sick leave law study has major flaws." An analysis of the potential costs of mandating nine days of sick leave by a cross-town consultancy, commissioned by the local Chamber of Commerce, shifted a decimal place in calculating lost property tax revenues and thus overstated the city's lost revenue by an order of magnitude — $21 million (huge hole in city budget) vs. less than $1 million. That's gotta hurt.

I've thought that the sick leave mandate was a bit on the generous side — I don't get 9 days of "sick" leave" (*) — but the WSJ story offers a detail on how the requirement can be met (that I'd previously missed) that changes my mind:
It would cover employees who work at least 12 hours a week, exempt businesses with fewer than five employees, and count any sort of leave - vacation, sick or personal time - toward the requirement. [emphasis added]
My employer, for instance, provides a newly hired full-time equivalent employee with eighteen days of eligible leave — twice the mandate. So establishments offering standard annual leave packages would easily meet the mandate's requirements and be substantially unaffected. The main exception would be places that don't offer their part-timers pro rata leave benefits, or possibly which play games with pseudo-temporary employees to avoid certain employment costs (**).

Clearly, the effect will be concentrated in sectors of the service industry where part-time work with minimal benefits is central to the business plan. Even here, it shouldn't take too much imagination to see how the cost of providing the leave can be offset with benefits in employee morale (and hence productivity) and retention.

When the study re-appears with its arithmetic fixed, it will be interesting to see if any such effects were considered.

Addendum: See also Lisa Subeck and Badger Blues.

(*) The ordinance would require eligible employees to be provided with one hour of leave per 30 hours worked, or 8-2/3 8-hour days for a 2,080-hour work year.

(**) Regarding which, I'm a long-standing doubter that such arrangements are necessarily efficient after productivity losses and turnover costs are considered.
How does a company with Economics in its name misplace a decimal point? Isn't the work double-checked?
Making the error is alarmingly easy. Failing to catch an error of that magnitude before releasing the report is Bad. They should have been as able to tell that the lost property tax figure did not pass the laugh test as Austin King...
Dude, Austin King doesn't pass the laugh test.
In this case, he has one up on the NorthStar economics people.
The simplest argument for sick leave is that, without it, the employee is incented to make others sick.

As anyone with kids in preschool or the early grades how often their child gets something that someone else in the class had a few days earlier.

Adult immune systems may be stronger, and physical interaction presumably is less, but germs that survive being airborne, or live on toilet seats and the like, are not exactly extinct.
Ken: Speaking as one who has caught airborne bugs that have made their way home from preschool, I find that to be a simple and very good point. From accounts I've seen of the cost of the mandate to employers, I'd be surprised if any benefits were taken into account.
Post a Comment

<< Home

This page is powered by Blogger. Isn't yours?