BILL ANALYSIS Ó
AB 400
Page 1
Date of Hearing: April 26, 2011
ASSEMBLY COMMITTEE ON JUDICIARY
Mike Feuer, Chair
AB 400 (Ma) - As Introduced: February 14, 2011
SUBJECT : EMPLOYMENT: PAID SICK DAYS
KEY ISSUE : IN ORDER TO PROTECT CO-WORKERS FROM EXPOSURE TO
ILLNESS AND PROVIDE FAIR ALTERNATIVES TO WORKING PARENTS WITH
SICK CHILDREN, SHOULD EMPLOYERS BE REQUIRED TO PROVIDE PAID SICK
DAYS FOR ANY EMPLOYEE WHO WORKS FOR SEVEN OR MORE DAYS IN A
CALENDAR YEAR?
FISCAL EFFECT : As currently in print this bill is keyed fiscal.
SYNOPSIS
This bill is substantially the same as the author's two prior
efforts in this area since 2008. The prior measures passed this
Committee by a 7-3 vote but were held on suspense in the
Appropriations committees. This bill, co-sponsored by the
California Labor Federation, Communications Workers of America
and the Labor Project for Working Families, creates the Healthy
Families, Healthy Workplaces Act of 2011 which requires
employers to provide paid sick days for an employee who works
for seven or more days in a calendar year. According to the
author, 40 percent of all workers in California do not have any
paid sick days through their employer. The author states that
this bill appropriately allows workers to earn paid sick days,
which they can use for personal illness, to care for a sick
family member and to recover from domestic violence or assault.
The author argues that studies have found that providing sick
days to workers saves money for businesses by reducing turnover,
reducing the spread of illness in the workplace, and improving
workers' morale and productivity. The sponsors state that the
lack of paid sick days is a public health hazard. The sponsors
also state that this bill will increase productivity since the
productivity of workers with even minor illnesses goes down
compared to the productivity of their healthy co-workers.
Finally, the author states that this bill will prevent parents
from choosing between caring for a sick child and work
obligations. Opponents representing many large and small
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business associations, including the California Employment Law
Council and the California Chamber of Commerce, argue that this
bill would unreasonably expand employers' burdens, costs and
liability. Opponents also state that many California employers
provide paid sick leave and/or paid vacation time even though
current law does not require it. Opponents conclude that in an
already troubled economy California should be seeking ways to
stimulate job growth and avoid forcing costly mandates on
employers.
SUMMARY : Creates the Healthy Families, Healthy Workplaces Act
of 2011, which requires employers to provide paid sick days for
an employee who works for seven or more days in a calendar year.
Specifically, this bill :
1)Provides that an employee who works in California for 7 or
more days in a calendar year is entitled to paid sick days,
accrued at a rate of no less than one hour for every 30 hours
worked.
2)Provides that an employee would be entitled to use accrued
sick days beginning on the 90th calendar day of employment.
3)Requires employers to provide paid sick days, on the
employee's request, for the following purposes:
a) for diagnosis, care, or treatment of health conditions
of either the employee or an employee's family member, or
b) for leave related to domestic violence or sexual
assault.
4)Prohibits an employer from denying an employee the right to
use sick days, or discharging or threatening to discharge,
demote, suspend, or in any manner discriminating against an
employee for using sick days, attempting to exercise the right
to use sick days, filing a complaint with the Department or in
court alleging a violation of this article, cooperating in an
investigation or prosecution of an alleged violation of this
article, or opposing any policy, practice, or act that is
prohibited by this article.
5)Provides that there will be a rebuttable presumption of
unlawful retaliation if an employer discriminates in the above
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ways against an employee within 90 days of: the employee
filing a complaint with the Labor Commissioner or in court;
the employee cooperating in an investigation or prosecution of
an alleged violation; or the employee opposing a policy,
practice, or act prohibited by this article.
6)Requires employers to give written notice to each employee in
English, Spanish, Chinese, and any other language spoken by at
least 5% of employees, stating that an employee has the right
to accrue, request, and use paid sick days; the amount of paid
sick days entitled to; terms of use of paid sick days; and
that retaliation/discrimination is prohibited and an employee
has the right to file a complaint or bring a civil action for
violations.
7)Requires employers to display a poster in a conspicuous place
in each workplace, with all of the information regarding
employees' rights that is required in the written notice.
8)Provides that employers who willfully violate the notice and
posting requirements are subject to a civil penalty of not
more than $100 per offense.
9)Requires the Labor Commissioner to administer and enforce the
requirements, including promulgation of regulations,
investigation, mitigation, and relief of violations.
10)Authorizes the Labor Commissioner to impose specified fines
for violations.
11)Authorizes the aggrieved person, the Labor Commissioner, the
Attorney General, or the aggrieved person's organization to
bring an action for civil penalties against an offender, as
well as attorneys' fees, costs, and interest.
12)Specifies that the requirements do not apply to employees
covered by a collective bargaining agreement that provides for
paid sick days, nor does the bill lessen any other obligations
of the employer to employees.
13)Specifies that the requirements do not apply to employees in
the construction industry covered by a collective bargaining
agreement if the agreement expressly waives the requirements
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of this article in clear and unambiguous terms.
14)Specifies that the requirements do apply 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 bill's requirements for accrual of sick days.
15)Provides that a small business employer (defined as an
employer with 10 or fewer employees during 20 or more work
weeks in the current or preceding calendar year) can limit an
employee's use of sick days to 40 hours, or 5 days, in each
calendar year.
16)Provides that all other employers (not small business) may
limit an employee's use to 72 hours, or 9 days, in each
calendar year.
17)Requires employers to keep records for at least 5 years
documenting hours worked and paid sick days accrued and used
by employees.
18)Authorizes the Labor Commissioner, if he or she determines
after a hearing that the employer has violated this article,
to order appropriate relief, including reinstatement, backpay,
payment of sick days unlawfully withheld, and payment of an
administrative penalty to the person whose rights were
violated; if paid sick days were withheld unlawfully, the
dollar amount of sick days withheld multiplied by three, or
$250, whichever is greater, will be included in the
administrative penalty; in addition, if other harm was caused
to the person by the violation (such as discharge from
employment), the administrative penalty shall also include $50
for each day or portion thereof that the violation occurred or
continued.
19)Authorizes the Labor Commissioner to take enforcement action
such as filing a civil action if prompt compliance is not
forthcoming by an employer; authorizes the Labor Commissioner
to order the employer to pay not more than $50 per day a
violation occurs to compensate the state for the costs of
remedying the violation.
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20)Authorizes the Labor Commissioner, the Attorney General, a
person aggrieved by a violation, or an entity a member of
which is aggrieved, to bring a civil action in court against
the employer or other person violating this article. Provides
that upon prevailing, the party filing suit shall be entitled
to appropriate legal or equitable relief to remedy the
violation, including reinstatement; backpay; payment of sick
days unlawfully withheld; payment of liquidated damages of $50
to each employee whose rights were violated; plus the dollar
amount of paid sick days withheld from the employee multiplied
by three or $250, whichever is greater; reasonable attorneys'
fees and costs.
21)Provides that in an administrative or civil action, the Labor
Commissioner or the court shall award interest on all amounts
due and unpaid, at the rate of interest specified in Civil
Code section 3289(b).
22)Provides that the remedies, penalties, and procedures
provided are cumulative.
EXISTING LAW requires, under the Moore-Brown-Roberti California
Family Rights Act, employers with 50 or more employees to
provide covered employees, upon request, with up to 12 weeks of
protected unpaid leave during any 12-month period for the
following reasons:
1)For the birth of a child or the placement of a child in
connection with the adoption or placement in foster care of
the child with the employee;
2)To care for a parent, spouse or child with a serious health
condition; or,
3)Because of the employee's own serious health condition.
(Government Code Sections 12945.1 et seq.)
COMMENTS : This bill is substantially identical to AB 1000 of
2009 and AB 2716 of 2008, which passed this Committee by a vote
of 7 to 3 but was then held on suspense in the Appropriations
committees. This bill is co-sponsored by the California Labor
Federation, Communications Workers of America and the Labor
Project for Working Families. It is intended to address the
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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.
The author's office states that this bill allows workers to earn
paid sick days, which they can use for personal illness, to care
for a sick family member and to recover from domestic violence
or assault. The author argues that studies have found that
providing sick days to workers saves money for businesses by
reducing turnover, reducing the spread of illness in the
workplace and improving workers' morale and productivity. The
sponsors state that the lack of paid sick days is a public
health hazard. According to the sponsors, the Centers for
Disease Control recommends workers who are ill "stay home from
work and school" to prevent the spread of disease in the
community and workplace. The sponsors also state that this bill
will increase productivity since the productivity of workers
with even minor illnesses goes down compared to the productivity
of their healthy co-workers. Finally, the author states that
this bill will prevent parents from choosing between caring for
a sick child and work obligations.
Various Reports and Studies Indicate a Need for Paid Sick Leave
and Highlight its Benefits: According to the Labor Project for
Working Families (LPWF), 6 million working Californians do not
have paid sick days. LPWF states that 76% of low-wage workers
have no paid sick days and have no choice but to go to work sick
and send their sick children to either school or child care.
According to LPWF, sick workers risk spreading contagion to the
public and are more likely to have an accident on the job.
According to a 2003 Kaiser Family Foundation Report, half of all
U.S. women forego pay when they stay home to take care of a sick
child (Women, Work, and Family Health: A Balancing Act, Henry J.
Kaiser Family Foundation, April 2003). A recent study,
conducted by the Institute for Women's Policy Research, which
used data collected by the U.S. Bureau of Labor Statistics, U.S.
Department of Health and Human Services, California Employment
Development Department and U.S. Census Bureau to evaluate the
likely impact of the previous year's identical bill found, among
other things: "If this bill becomes law, California employers
would pay just $1.3 million annually for wages and associated
costs to workers who take leave; savings to employers would
total $2.3 million annually, mainly from reduced costs of
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turnover; and, workers and their families would experience lower
expenditures for health-care services, saving $7 million
annually." (Valuing Good Health in California: The Costs and
Benefits of the Healthy Families, Healthy Workplaces Act of
2008, Institute for Women's Policy Research, April 2008.)
The author cites a Field Research poll from August 2008, which
shows that Californians overwhelmingly support guaranteed paid
sick days-73% of California adults surveyed stated that they
would support a law guaranteeing paid sick days for all
Californian workers. This support crosses party, gender, and
ethnic lines. Moreover, 76% of those surveyed said that paid
sick days should be considered a basic worker right, like a
decent wage.
Proposition F (San Francisco Ordinance Chapter 12W) Requires
Paid Sick Leave of All San Francisco Employers : In 2006, San
Francisco voters approved Proposition F, the first law in the
nation that provided 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. 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.
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 two 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 states, "ÝThis bill] is a
win-win for both workers and employers. In fact, a recent study
conducted by the Women's Policy Research Institute concluded
that by allowing workers to earn paid sick days, the amount
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which could be saved annually by employers could reach up to $1
billion. These cost savings are primarily attributed to the
cost of the reduction of worker turnover."
Proponents of this measure cite to various studies and reports
in support of this legislation. First, supporters contend that
lack of paid sick days is a public health hazard, pointing out
that the Centers for Disease Control recommend workers who are
ill "stay home from work and school" to prevent the spread of
disease. However, only 15 percent of food service workers in
restaurants and food processing plants have paid sick days
(Hartmann, Heidi, Ph.D., Public Testimony, February 2007 hearing
on the federal Healthy Families Act). Supporters also contend
that the risk of occupational health hazard is increased in
industries without paid sick days, and that 51% of all mining
employees, 73% of sanitation workers, and nearly 500,000
manufacturing employees do not have access to paid sick days
(2006 National Compensation Survey Analysis by the Labor Project
for Working Families).
Proponents also argue that paid sick days reduce the costs of
employee turnover because employees with paid sick days are less
likely to leave their jobs (V. Lovell (2005) Valuing Good
Health: An Estimate of Costs and Savings for the Healthy
Families Act. Washington, D.C.: Institute for Women's Policy
Research). Every time an employee leaves a job, it costs the
employer 25% of a worker's total compensation, on average, to
replace that worker. (Employment Policy Foundation. (2002).
"Employee Turnover - A Critical Human Resource Benchmark." HR
Benchmarks. (December 3): 1-5.)
Finally, supporters argue that the workers with even minor
illnesses are less productive than their healthy co-workers.
(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.) 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.
ARGUMENTS IN OPPOSITION : A large number of business
associations representing both large and small businesses oppose
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this measure. Among them, a coalition led by the California
Chamber of Commerce argues that the bill would unreasonably
expand both public and private employer's costs and liability
for a new protected and paid sick leave for employees.
Specifically, this group contends that the bill would "Ýadd]
onto the already numerous and burdensome posting requirements in
California. The costs for these mandates alone will overwhelm
businesses in California that are already struggling to survive
in this economy. As recently reported in the February 2011
Institute for Women's Policy Research on the effect of the paid
sick leave program in San Francisco, 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."
This business group goes on to argue, "In addition to the
increased business expenses and potential loss of jobs AB 400
will create, AB 400 will also dramatically increase an
employer's risk for legal fees and costs. Not only does AB 400
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 AB
400 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. AB 400
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.
California was recently rated one of the top ten litigious
states in the nation. AB 400 will certainly emphasize that
point with the various vehicles for litigation it creates.
California has the second highest unemployment rate in the
nation at 12.2%, 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 AB 400. Growth
amongst the private sector is a critical component in
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California's economic recovery, which AB 400 will certainly
discourage, if not prohibit. "
PRIOR LEGISLATION : AB 1000 (Ma and Skinner) of 2009 was
substantially the same as this bill in that it would have
provided that an employee was entitled to paid sick days which
would have been accrued at a rate of no less than one hour for
every 30 hours worked. Employers also would have been required
to provide paid sick days, upon request, for diagnosis, care, or
treatment of health conditions of the employee or an employee's
family member, or for leave related to domestic violence or
sexual abuse. The bill would have required employers to satisfy
specific posting and notice and recordkeeping requirements.
That bill was held on suspense in the Assembly Appropriations
Committee.
AB 2716 (Ma) of 2008 was identical to ABA 1000. It was held on
suspense in the Senate Appropriations Committee.
REGISTERED SUPPORT/OPPOSITION :
Support
California Labor Federation (sponsor)
9to5 National Association of Working Women -- California
California Child Care and Referral Network
California Conference Board of the Amalgamated Transit Union
California Conference of Machinists
California Federation of Teachers
California Labor Federation
California Nurses Association/National Nurses Organizing
Committee
California Official Court Reporters Association
California Pan-Ethnic Health Network
California Teamsters Public Affairs Council
California Women's Law Center
Communication Workers of America, District 9
Disability Rights Legal Center
Employment Law Center - Legal Aid Society of San Francisco
Engineers and Scientists of California
Equal Rights Advocates
Having Our Say!
Health Access California
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Health Officers Association of California
International Longshore & Warehouse Union
International Longshore & Warehouse Union - N. Cal
International Warehouse, Processing and Distribution Workers'
Union
Labor Project for Working Families
National Lawyers Guild Labor & Employment Committee
Professional & Technical Engineers, Local 21
Restaurant Opportunities Center of Los Angeles
Saint John's Well Child and Family Center (Los Angeles)
UAW, Local 2865
UNITE HERE!
United Domestic Workers of America/AFSCME Local 3930
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
Associated Builders and Contractors of California
Associated General Contractors of California
Association of California Healthcare Districts
Association of California Water Agencies
California Aerospace Technology Association
California Apartment Association
California Association of Bed and Breakfast Inns
California Association of Health Facilities
California Association of Health Services at Home
California Association of Public Authorities
California Association of Joint Powers Authorities
California Attractions and Parks Association
California Automotive Wholesalers' Association
California Bankers Association
California Chamber of Commerce
California Chapter of the American Fence Association
California Employment Law Council
California Farm Bureau Federation
California Fence Contractors' Association
California Framing Contractors Association
California Grocers Association
California Hospital Association
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California Hotel and Lodging Association
California Landscape Contractors Association
California Lodging Industry Association
California Manufacturers & Technology Association
California New Car Dealers Association
California Newspaper Publishers Association
California Retailers Association
California Service Station and Automotive Repair Association
California Special Districts Association
California State Association of Counties
City of Lakewood
Engineering and Utility Contractors Association
Engineering Contractors' Association
Flasher/Barricade Association
Hall Ambulance Service, Inc.
League of California Cities
Marin Builders' Association
National Federation of Independent Business
Pacific Association of Building Service Contractors
Regional Council of Rural Counties
Simi Valley Chamber of Commerce
Western Electrical Contractors Association
Western Growers
Several Individuals
Analysis Prepared by : Kevin G. Baker / JUD. / (916) 319-2334