BILL ANALYSIS Ó
AB 400
Page A
Date of Hearing: April 13, 2011
ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT
Sandre Swanson, Chair
AB 400 (Ma) - As Introduced: February 14, 2011
SUBJECT : Paid sick days.
SUMMARY : Requires employers to provide paid sick days, as
specified. Specifically, this bill :
1 Provides that an employee who works in California for seven or
more days in a calendar year is entitled to paid sick days,
compensated at the same wage the employee normally earns
during regular work hours.
2)Specifies that paid sick days accrue at the rate of no less
than one hour for every 30 hours worked.
3)Provides that paid sick days shall be carried over to the
following calendar year, but an employer can limit their use
as follows:
a) A small business employer (defined as having ten or
fewer employees during 20 or more calendar workweeks in the
current or preceding calendar year) may limit an employee's
use to 40 hours or five days in each calendar year.
b) All other employers may limit an employee's use to 72
hours or nine days in each calendar year.
4)Specifies that an employee shall be entitled to use paid sick
days beginning on the 90th calendar day of employment.
5)Requires an employer, upon oral or written request of an
employee, to provide paid sick days for the following
purposes:
a) Diagnosis, care or treatment of an existing health
condition of, or preventative care for, an employee or the
employee's family member.
b) For an employee who is a victim of domestic violence or
sexual assault, as specified.
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6)Defines "family member" to include a child (as specified), a
parent (as specified), a spouse, a registered domestic
partner, a grandparent, a grandchild, or a sibling.
7)Prohibits an employer from denying an employee the right to
use sick days, discharging, threatening to discharge,
demoting, suspending or in any manner discriminating against
an employee for using sick days.
8)Establishes a rebuttable presumption of unlawful retaliation
if an employer takes certain action within 90 days of
specified activity on the part of an employee.
9)Requires employers to provide notice of these requirements, as
specified.
10)Requires employers to keep certain records related to paid
sick days for five years.
11)Authorizes the Labor Commissioner to coordinate
implementation and enforcement of these requirements and to
promulgate guidelines and regulations.
12)Authorizes the Labor Commissioner to investigate alleged
violations and order appropriate relief, including
reinstatement, back pay, the payment of sick days unlawfully
withheld, and additional administrative penalties, as
specified.
13)Authorizes the Labor Commissioner, the Attorney General, a
person aggrieved, or an entity a member of which is aggrieved
to bring a civil action in a court of competent jurisdiction
to recover relief, as specified, including back pay,
penalties, liquidated damages and attorney's fees and costs.
14)Specifies that this bill establishes minimum requirements and
does not preempt, limit, or otherwise affect the applicability
of any other law or similar requirement that provides greater
accrual or use by employees of sick days, or that extends
other protections to employees.
15)Provides that these requirements do not apply to an employee
covered by a valid collective bargaining agreement that, among
other things, expressly provides for paid sick days and
finding and binding arbitration of disputes concerning the
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application of those provisions.
16)Provides that these requirements do not apply to employees in
the construction industry covered by a valid collective
bargaining agreement that meets certain conditions but does
not necessarily provide for paid sick days.
17)Specifies that the bill applies to certain public authorities
established to deliver in-home supportive services, except
where a collective bargaining agreement provides for an
incremental wage increase sufficient to satisfy the
requirements for accrual of sick days.
18)Makes other conforming and related changes to existing law.
19)Makes related legislative findings and declarations.
FISCAL EFFECT : Unknown
COMMENTS : According to the author, this bill is intended to
address the current situation in which a reported 6 million
California workers (or about 40 percent of the workforce) are
not provided paid sick days through their employer.
Existing California law provides for various forms of unpaid and
(in some circumstances) paid leave for employees. Current law
does not, however, generally require employers to provide paid
sick leave, as that term is traditionally used. California law
does impose certain standards to the use of sick leave for those
employers who do provide it (such as "kin care" leave under
Labor Code Section 233) but there is not a general obligation
for employers to provide sick leave.
In 2006, San Francisco voters approved Proposition F, the first
law in the nation that required workers with the ability to earn
and use paid sick days. That measure was implemented and is
enforced by the San Francisco Office of Labor Standards
Enforcement (OLSE). OLSE reports that there is no hard data as
to the utilization of sick leave under the San Francisco law, or
of its impact on employers or employees. However, in terms of
enforcement, OLSE reports that it had approximately 35 formal
complaints the first year of the law and sent an additional 35
cautionary letters to employers about whom anonymous workers had
contacted the office. In addition, OLSE undertook a three-month
public rulemaking process in early 2007 to clarify outstanding
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issues regarding the law and has made over 20 public
presentations to business and merchant associations.
Similar Efforts at the National, State and Federal Levels
Paid sick days legislation has been proposed at the federal,
state and local levels. For several years, a federal Healthy
Families Act has been proposed that would ensure that all
employees working 30 or hours more per week have seven paid sick
days a year. At least fourteen states have proposed legislation
for paid sick days over the last several years. As discussed
above, a San Francisco ordinance enacted in 2006 provides paid
sick days for all workers employed in the city. A similar
measure was narrowly defeated in Madison, Wisconsin.
ARGUMENTS IN SUPPORT :
The author of this measure states the following:
"Nearly 6 million working Californians - over 40 percent of
all workers in California - cannot earn paid sick days.
In 2006, San Francisco voters passed Proposition F, a first
in the nation law, that provided all workers in the city
with the ability to earn and use paid sick days. A 2011
report by the Institute for Women's Policy Research
analyzed a survey of over 700 employers and nearly 1,200
employees and found that 2/3's of employers support the
law. This followed a report by the Drum Major Institute
that "shows paid sick leave to be a cost-effective policy
with positive outcomes for employers and employees,
including increased worker productivity, reduced spread of
illness, and other health and economic benefits."
A Field Research poll conducted in August 2008 shows
overwhelming support by Californians for guaranteed paid
sick days. A large majority - 73 percent - of California
adults surveyed indicated that they would support a law
guaranteeing paid sick days for all California workers.<1>
This support crosses party, gender, and ethnic lines.
The lack of paid sick days negatively impacts family
-------------------------
<1> Survey conducted for the California Center for Research on
Women and Families by Field Research Corporation between July 8
and July 14, 2008.
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economic security and harms public health. Workers who have
no paid sick days are forced to make an impossible choice:
lose pay and risk job loss to care for a personal illness
or care for a sick family member. Many workers who show up
to work sick handle our food at restaurants, take care of
our kids at daycare centers, and nurse the sick and
elderly. When workers are forced to work sick, their germs
become our germs. Parents without paid sick days put other
children's health at risk.
In a 2008 report, Human Impact Partners found that the
health of all Californians would significantly benefit if
workers earned paid sick days and used them when ill or
when a family member needs care."
Proponents of this measure cite to various studies and reports
in their arguments in support of this legislation. First,
supporters contend that lack of paid sick days is a public
health hazard. They point out that the Centers for Disease
Control recommends workers who are ill "stay home from work and
school"<2> to prevent the spread of disease in the community and
workplace. However, they argue that only 15 percent of food
service workers in restaurants and food processing plants have
paid sick days<3>. They also contend that the risk of
occupational health hazard is increased in industries without
paid sick days, and note that 51 percent of all mining
employees, 73 percent of sanitation workers and nearly 500,000
manufacturing employees do not have access to paid sick days<4>.
Proponents also argue that paid sick days reduce the costs of
employee turnover and claim that employees with paid sick days
are less likely to leave their jobs<5>. Every time an employee
leaves a job, it costs the employer 25 percent of a worker's
---------------------------
<2> Centers for Disease Control website: www.cdc.gov
<3> Hartmann, Heidi, Ph.D., Public Testimony, February 2007
hearing on the federal Healthy Families Act.
<4> 2006 National Compensation Survey Analysis by the Labor
Project for Working Families
<5> Lovell V. (2005). Valuing Good Health: An Estimate of Costs
and Savings for the Healthy Families Act. Washington, D.C. :
Institute for Women's Policy Research.
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total compensation, on average, to replace that worker<6>.
Supporters also argue that the productivity of workers with even
minor illnesses goes down compared to the productivity of their
healthy co-workers<7>. Moreover, sick workers, or workers with
sick loved ones, who are able to take paid sick days recover
faster from illnesses than those who are forced to go to work.
Therefore, supporters conclude that paid sick days actually
increase employee productivity.
Finally, supporters point to a recent study<8> on the
effectiveness of the recent San Francisco paid sick leave
ordinance (PSLO), which made the following findings:
Despite the availability of either five or nine sick
days under the PSLO, the typical worker with access used
only three paid sick days during the previous year, and
one-quarter of employees with access used zero paid sick
days.
More than half of San Francisco employees with access
reported benefitting from the
PSLO either because their employer became more supportive
of usage, the number of sick days provided increased, or
they were better able to care for themselves or family
members.
Black, Latino, and low-wage workers were those who most
often benefitted from the law, but were also those most
likely to report employer non-compliance.
Parents with paid sick days were more than 20 percent
less likely to send a child with a contagious disease to
school than parents who did not have paid sick days.
Employer profitability did not suffer. Six out of seven
employers did not report any negative effect on
profitability as a result of the PSLO.
Most employers reported no difficulty providing sick
days to their employees under the ordinance. Approximately
one-third of employers reported any difficulties
implementing the PSLO, and only one-sixth needed to
--------------------------
<6> Employment Policy Foundation. (2002). "Employee Turnover - A
Critical Human Resource Benchmark." HR Benchmarks. (December
3): 1-5.
<7> Smith, A. (1989). "A Review of the Effects of Colds and
Influenza on Human Performance." Journal of the Society of
Occupational Medicine. 39: 65-68.
<8> Drago, Robert and Vicky Lovell. "San Francisco's Paid Sick
Leave Ordinance: Outcomes for Employers and Employees."
Institute for Women's Policy Research (February 2011).
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introduce an entirely new paid sick days policy because of
the law. However, some employers (also around one-sixth)
are in violation of the law and still did not offer paid
sick days at the time of the survey.
Employers are supportive. Two-thirds of employers
support the PSLO and one-third are "very supportive."
ARGUMENTS IN OPPOSITION :
Opponents argue that he costs for the mandates in this bill
would overwhelm businesses in California that are already
struggling to survive in this economy. Opponents point to the
same study cited by proponents on the effect of the paid sick
leave program in San Francisco, which found that 15.2% of the
employees surveyed were laid off or had their hours reduced
after the program was implemented; 14.1% of the employees
surveyed received fewer bonuses or had their benefits reduced;
and 21.7% of the employees had increased work demands. Out of
the industries surveyed, businesses with 24 employees or less
were the most negatively impacted by the paid sick leave
program.
In addition to the increased business expenses and potential
loss of jobs this bill will create, opponents argue that this
bill will also dramatically increase an employer's risk for
legal fees and costs. Not only does this bill create a private
right of action for employees to sue for any alleged violation
with the right to recover back wages, liquidated damages,
withheld sick days, attorney's fees, reinstatement, and
injunctive relief, but it also creates a rebuttable presumption
of retaliation. Specifically, under this bill it will be
presumed that an employer retaliated against an employee if the
employer takes any corrective action within 90 days of an
employee's complaint or opposition to an employer's practice or
policy regarding mandated paid sick leave. This bill also
imposes penalties against an employer for failure to post the
required notices imposed by this section, as well as maintain
records regarding employees' accrued sick leave.
Opponents note that California has the second highest
unemployment rate in the nation and is lagging the rest of the
country in recovering from the recession. With this dismal
financial outlook, California simply cannot afford to continue
to burden private businesses with costly mandates such as this
bill. Growth amongst the private sector is a critical component
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in California's economic recovery, which this bill will
certainly discourage, if not prohibit.
Opponents also contend that mandated paid sick leave creates
more opportunity for abuse by employees because it would impose
a new job protected right for employee leave. They contend that
this bill does not account for differences among industries or
the size of the firms, factors that impact the ability of
employers to afford this costly new mandate or compensate for
loss of production. This creates greater disruptions to
business that negatively impact other employees and customers.
Several public sector employers oppose this bill, arguing that
leave policies are part of a total compensation and benefits
package that should be determined locally, especially for
employers covered by collective bargaining agreements. They
contend that this bill undermines local control and the
integrity of the collective bargaining process. In addition,
the administrative burdens and additional costs to provide sick
leave will severely restrict the use of extra help and seasonal
employees, which in turn will increase costs and reduce
efficiencies in the delivery of services to the public.
They also argue that this bill poses a particular problem for
In-Home Supportive Services (IHSS) employees who do not work a
traditional scheduled work week. IHSS providers are paid for
services provided and calculated by the hours they work. This
program is funded by a mix of federal, state and local funds.
They contend federal reimbursement would not be available for
sick leave hours and it is not clear what portion of the cost
burden the state would share. They estimate the annual
statewide liability for providing paid sick days to IHSS
providers to be $13 million (based on about 39 million hours
worked in 2008 at an average salary of $9.98 per hour).
PRIOR LEGISLATION:
This bill is almost identical to AB 1000 (Ma) from 2009. AB
1000 was held in the Assembly Committee on Appropriations.
This bill is also similar to AB 2716 (Ma) from 2008. That
measure was held in the Senate Committee on Appropriations.
REGISTERED SUPPORT / OPPOSITION :
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Support
California Child Care Resource & Referral Network
California Commission on the Status of Women
California Conference Board of the Amalgamated Transit Union
California Conference of Machinists
California Employment Lawyers Association
California Labor Federation, AFL-CIO (Sponsor)
California Nurses Association/National Nurses Organizing
Committee
California Official Court Reporters Association
California Teamsters Public Affairs Council
California Women's Law Center
Disability Rights Legal Center
Engineers and Scientists of California
Health Access California
Health Officers Association of California
ILWU Warehouse, Processing & Distribution Workers' Union, Local
26
International Longshore and Warehouse Union
Jericho
Labor Project for Working Families
Northern California District Council-ILWU
Parent Voices
Professional & Technical Engineers, Local 21
Restaurant Opportunities Center of Los Angeles
St. John's Well Child & Family Center
The Legal Aid Society-Employment Law Center
UAW, Local 2865
UNITE HERE!
United Food and Commercial Workers Union, Local 5
United Food and Commercial Workers Union, Western States Council
United Steel Workers, Local 675
Utility Workers Union of America, Local 132
Opposition
Agricultural Council of California
Air Conditioning Sheet Metal Association
Air-conditioning and Refrigeration Contractors Association
Associated Builders and Contractors of California
Associated General Contractors
Association of California Healthcare Districts
CalChamber
California Aerospace Technology Association
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California Apartment Association
California Association for health Services at Home
California Association of Bed & Breakfast Inns
California Association of Health Facilities
California Association of Joint Powers Authorities
California Association of Joint Powers Authorities
California Attractions and Parks Association
California Automotive Wholesalers' Association
California Bankers Association
California Chapter of the American Fence Association
California Chapters of the National Electrical Contractors
Association
California Employment Law Council
California Farm Bureau Federation
California Fence Contractors' Association
California Framing Contractors Association
California Grocers Association
California Hospital Association
California Hotel & Lodging Association
California Landscape and Irrigation Council
California Landscape Contractors Association
California Legislative Conference of the Plumbing, Heating and
Piping Industry
California Lodging Industry Association
California Manufacturers & Technology Association
California New Car Dealers Association
California Newspaper Publishers Association
California Retailers Association
California Special Districts Association
California State Association of Counties
City of Lakewood
Engineering and Utility Contractors Association
Engineering Contractors Association
Flasher Barricade Association
League of California Cities
Marin Builders' Association
Mr. Bryan Boylan
National Federation of Independent Business
OPTO 22
Pacific Association of Building Service Contractors
Regional Council of Rural Counties
Riverside County School Superintendents' Association
Simi Valley Chamber of Commerce
Western Electrical Contractors Association, Inc.
Western Growers Association
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Analysis Prepared by : Ben Ebbink / L. & E. / (916) 319-2091