What’s the Deal with this Paid Sick Leave Ordinance?

Paid sick leave – seems like something every employee wants and most small businesses would support, right?  But the new ordinance passed in Austin may be placing too much pressure of Austin’s valuable small businesses.

Here’s an article from KVUE about one small business owner says he’s considering taking his business outside the city after the passing of the paid sick leave ordinance: ” Peter Morales, who owns a lot of small businesses in the Austin area, was helping out at Las Quesadillas on Saturday afternoon.
Morales said he already offers his workers paid sick leave.
“Whenever somebody calls in sick, we tell them to take the day off,” Morales said, explaining that, in the restaurant business, you can’t afford to have sick people working.
He said he thinks the ordinance is a good idea, but he believes the city needs to consider the impact on small businesses.
“I know that because we own different companies, so we support some of our businesses sometimes when times are not good,” Morales explained. “And for a business owner, if this were my only business, it would definitely hurt me.”
Morales said small business owners do a lot to give back to the city, even calling them “the heart of Austin”.
“I shop locally, I spend my money locally,” Morales said. “So any profits we make on our small business, we help turn the economy in Austin.”

Small businesses are like a patchwork quilt that preserve the strength and vitality of Austin as a whole.  Not only do the small businesses employ local residents, but much more money stays in the local economy to recirculate and further benefit Austin.  Small business owners need additional consideration.

AIBA, which functions to preserve and promote Austin’s small businesses, polled their members to determine their position. If the respondents opposed the ordinance, they were asked what changes would make the ordinance acceptable.  Read the results and comments here.

88% of respondents opposed the ordinance for the following reasons:

• This is a serious overreach of local government. The study supporting this was a national study conducted several years ago. There is no indication that the study eliminated independent contractors. Following a national trend, Austin has a large and growing number of independent contractors. Paid sick days cannot apply to independent contractors as it jeopardizes their standing as independents.

• The study conducted by Public Policy Polling for Work Strong Austin interviewed 600 Austin voters. 49% of those interviewed aren’t even subject to paid or unpaid sick days because they don’t work. According to the study, 29% are retired, 13% are self employed and 7% are students and homemakers. Of course they have an opinion. But should our City Council make decisions based on the opinion of those unaffected by that policy? We think not.

•  Let’s assume there is a problem with some in our community not being able to afford to take a day off when they are sick. These are primarily construction, maintenance and lower-wage hourly workers. If this is a problem, let’s find a way to fix the problem. Mandating a citywide policy has the potential to degrade or destroy the systems already in place by the majority of employers doing the right thing. Doing the right thing for employees and employer is a benefits policy that works to the benefit of both. Many AIBA members voiced that they have a system in place that provides the benefits their employees wanted which may or may not include specified sick leave. A broad policy like this destroys the ability for Austin’s entrepreneurs to be flexible and accommodating.

• Since this cannot by law apply to independent contractors, are we opening up a loophole that will encourage unscrupulous employers to reclassify employees as independent contractors to avoid compliance? The unintended consequences could be the loss of benefits enjoyed now by their employee status.

• Small employers will be hit hardest by this policy. Many struggle with rising property taxes and unaffordable leases. A small employer must juggle all aspects of their business just to survive. Most have told us in our surveys that they would be laying people off or cutting back hours to pay for an extensive sick leave policy. How will this help the most vulnerable business and employees when they no longer have a job?

• The unemployment rate in Austin is so low that employers are having to compete to attract qualified employees. This policy will tie their hands in bringing innovation to that competition. Let the marketplace drive better benefits. As an employee, if you’re not satisfied with your current benefits, another job is not hard to find. Look at local businesses…they’re looking for you.

• Many employers utilize Personal Time Off. It’s flexible, it’s measurable and it’s honest. By mandating paid sick time, our local government is encouraging a deceptive relationship between employer and employee. Have sick days but haven’t used them? Why let your coworkers get time off that you don’t get? Just call in sick. It’s dishonest and a system that encourages this shouldn’t be forced on businesses who are building honest relationships with employees.

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