Employers Beware: Paid-Sick-Day Laws May Be Coming Your Way

Employers around the country may need to brace for a new type of state-mandated employee benefit—paid sick days for workers—after three coastal states already have imposed it.

It could become a critical factor as CEOs and company chiefs weigh their staffing and talent needs against rising costs and regulations that discourage expanding employment, including Obamacare and minimum-wage hikes.

“This will only serve to eliminate any plans small employers have to grow and expand their businesses.”

California recently became the third locale—after Connecticut, in 2011, and New York City earlier this year—to impose paid sick leave on companies. Its law requires all employers to grant workers at least three days a year that they can use to call out sick and still get paid. The law is expected to affect about 39% of California’s workforce, or about 6.5 million workers, making it the most widespread sick-day law on the books in the United States.

Employees in California will get one hour of paid sick time for every 30 hours worked, though businesses can cap the benefit at three days annually. Employees must work at least 30 days in one year to become eligible, and the law excludes home-healthcare workers. The law will go into effect July 1 of next year and applies to all businesses regardless of size, unlike laws in Connecticut and New York City that don’t apply to the smallest businesses.

Organized labor praised the law, but some business interests objected. For example, the National Federation of Independent Businesses complained that the new measure will penalize small businesses in California that already are among the most burdened in the country. “This will only serve to eliminate any plans small employers have to grow and expand their businesses,” said John Kabateck, the group’s California executive director, in a statement.

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