Paid Sick Leave Hasn't Harmed D.C. Businesses

MBTPI strongly supports legislative proposals requiring employers to provide workers with earned sick and safe leave. This critical public health tool allows employees to attend to health needs for themselves or their children, thus protecting coworkers, classmates, and business customers from communicable illness. Overall, earned sick leave would lower health care costs and improve workplace well-being and productivity. According to a report by the Institute for Women's Policy Research (IWPR), if a law guaranteeing workers this right were to pass in Maryland, health care expenses in the state would fall by $41 million annually, with roughly half the savings returning to taxpayers.

Unfortunately, the Maryland Earned Sick and Safe Leave Act (House Bill 735/Senate Bill 703), which would have allowed workers to earn a minimum of one hour of paid sick leave per 30 hours on the clock, failed in committee last session. Critics of the bill claimed the law would impose too great a burden to small businesses, though the IWPR report disputed that and a large majority of Marylanders supported the bill according to independent polling.

While initiatives have been introduced in several states in the past few years, Connecticut remains the only state to have passed such legislation (it did so through a close vote in 2012), but several cities, including San Francisco and Washington D.C., have had such requirements for over half a decade.

Effective in May of 2008, the District of Columbia's Accrued Sick and Safe Leave Act mandates that employers offer one hour of paid leave to workers for every 37 to 87 hours worked (depending on the size of the company) to workers that have been employed at that firm for at least one consecutive 12 year period.

For the first time since its enactment, the D.C. Auditor has now studied the economic impact of the law on the private sector. The report, which was released Wednesday, includes the results of a survey sent to 800 D.C. businesses that asked owners if paid sick leave would lead them to move their firm out of the District, to which over 87 percent responded in the negative. The audit further found that this new law did not discourage new businesses from forming in the District, and 91 percent of employers in the District complied with the law's requirement of posting the notice of sick leave rights within the workplace.

This provides strong evidence that sick leave laws do not create excessive burdens on small business, which advocates can point to in this coming session should related bills be reintroduced.

Unfinished Business in the 2013 Session

MBTPI supported a number of proposals which were not successful this year. We plan to continue working on these issues.

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Earned Sick Leave

The Maryland Budget and Tax Policy Institute (MBPTI) supported HB 735 and SB698, requiring that employers provide employees with earned sick and safe leave and requiring employers to allow employees to use earned sick and safe leave. The bill would have benefited Maryland’s economy, reduced health care costs, and helped working families provide and care for their members. Earned sick leave is an important public health tool, enabling employees to take care of their health or the health of their children in a timely manner, and protecting coworkers, diners, or other customers from infection.

The cost to Maryland businesses would have been low, amounting to about 25 cents per hour per employee according to the Institute for Women’s Policy Research. More importantly, the business savings – primarily due to reduced turnover but also to increased productivity as a result of less sickness in the workplace, healthier customers, and other effects – completely offset these costs. The experiences of Connecticut and San Francisco show that earned sick leave requirements can be part of a vibrant, growing economy.

Unfortunately, the bill was opposed vigorously by business organizations. The House bill was withdrawn; the Senate bill died in committee. Yet the evidence shows that paid sick leave is not just a humane practice; it is good economic policy. MBTPI will support this legislation in the future.

Life-saving cigarette taxes

MBTPI supported legislation to add $1 per pack to Maryland’s tobacco taxes (HB 683/SB 700). This would have improved Maryland’s health by discouraging smoking, especially among young people. And it would have provided revenue which could be directed to health services. Both House and Senate bills died in committee, though. MBTPI will continue to support this measure on the principles of promoting good health and providing needed revenue.

Reforming corporation taxes

The state corporation tax got a lot of attention this session. Many bills were submitted to reduce the corporation income tax rate. Others proposed reforms to modernize the corporation tax, most notably by requiring “combined reporting” a tax system that prevents multi-state corporate groups from using subsidiaries and affiliates to avoid Maryland corporate income tax.

MBTPI supported a joint strategy of broadening the tax base and lowering the rate. The Institute supported combined reporting and other reforms to discourage corporate tax shifting and to broaden the corporate income tax base. A majority of the states with corporate income taxes have closed these loopholes.

We also supported a reduction in the corporation tax rate from 8.25 percent to 7.5 percent. Lowering the corporate income tax rate to 7.5 percent would put it near the same rate at which most Maryland personal income is taxed (including both state and local income taxes). We believe that this package would protect the revenue base needed to fund public services that are important to the economy, make Maryland’s tax system fairer and more modern, and help local Maryland businesses.

All of the bills to alter the corporation income tax either died in committee or were reported unfavorably. MBTPI continues to support sensible business tax reform.

Protecting resources for schools

MBTPI supported legislation to protect future education funding (HB 1474/SB 958). Over a decade ago, Maryland enacted a groundbreaking set of education finance reforms know as the “Thornton Program.” These reforms were based on a rigorous study of the actual costs in the state’s best-performing schools. They were intended to assure adequate education funding for all students, and to provide the resources necessary to reduce systematic performance gaps between students of different income categories and racial and ethnic groups. During the period of the Great Recession and its aftermath, the state found it necessary to limit the growth in the formula amounts. HB 1474 would have helped to prevent further erosion in Maryland’s commitment to full and fair public school funding. The bill died in committee. MBTPI will be calling on Governor O’Malley to fully fund the inflation increase in school costs in the next budget, and will again support legislation to protect future school funding.

Evidence-based policies

MBTPI supported legislation to promote evidence-based policy outcomes. SB 831 would have established a Committee on State Budget Evidence-Based Policy Options. The Committee would have reported annually on areas of opportunity within the operating budget where the state could benefit from evidence-based policies. This bill also died in committee. Over the summer, we will look at other states that have adopted this practice to gauge its success.

Unlike some states (Texas), Maryland’s legislature meets every year. MBTPI will be keeping track of these issues, and others, and pursuing them further in the 2014 legislative session.

The Week Ahead

Last week MBTPI blogged about sequestration and Maryland's annual average employment in 2012. We also testified in support of bills to create a tiered earned income disregard for recipients of temporary cash assistance, and earned sick and safe leave for employees.

For the week of March 4th to March 10th:

• Budget hearings are wrapping up. There are a few hearings on higher education, and in the Senate Health and Human Services Subcommittee. Most other subcommittees start making decisions. More information can be found on the budget hearing calendar.  
• Other issues with hearings and floor sessions this week include gun control, abolishing the death penalty, corporate tax reform, and possibly transportation funding. More information can be found on the committee calendar and floor agendas (click on a date to get more detailed information).
• Board of Public Works meets Wednesday, March 6th.
• Governor's Office of Healthcare Reform holds a stakeholder meeting in the Joint Hearing Room at 10am on Thursday, March 7th.
• Bureau of Labor Statistics releases national employment figures for February on Friday, March 8th.
• Bond Bill Saturday is March 9th.

The Week Ahead

Today's Week Ahead is abbreviated as we're taking part in Maryland Nonprofits' Annual Conference today. Last week, MBTPI blogged about film credits and we hosted a guest blog about school breakfast from Maryland Hunger Solutions. MBTPI also testified on several bills that would cut the corporate tax rate, and on transportation financing (all testimony).

For the week of February 25th to March 1st:

• Budget hearings continue. Highlights include the Department of Health and Mental Hygiene, the Maryland State Department of Education, and the Department of Human Resources. More information can be found on the budget hearing calendar.
• Hearings on other bills also continue. This week is going to be a busy one in Annapolis, with hearings on paid sick leave, the minimum wage, and gun control. More information can be found on the committee calendar and floor agendas (click on a date to get more detailed information).
• Homelessness and Reentry Lobby Day is Thursday, February 28th.
• Bureau of Labor Statistics will release the state-level 2012 employment averages on Friday, March 1st.
• And last, but definitely not least, unless Congress acts by the end of the week, sequestration cuts go into effect Friday, March 1st. The White House released state-by-state summaries of sequestration's impact yesterday. The Washington Post created an interactive page; they also provide a scan of the White House report so you can read all about the effect of sequestration on Maryland.

Maryland Workers Need Paid Sick Leave

The Working Matters coalition (MBTPI is a member) will be holding a press conference/rally on Thursday in Annapolis to announce the official filing of the Earned Sick and Safe Time Act, a bill to allow workers to earn a limited number of annual paid sick days from their employer.


Paid Sick Days Press Conference
Thursday, January 31, starting at 11:00 AM
Senate Office Building – East Wing Conference Room
11 Bladen Street, Annapolis

For more information or to RSVP, please contact Melissa Broome at (410) 236-6079 or melissa@jotf.org 

As for why MBTPI supports the Earned Sick and Safe Time Act, well...

Everyone gets sick and everyone deserves the opportunity to recover without risking their economic security, or the health of others. Yet more than 700,000 Marylanders are unable to earn paid sick days. This often means they go to work sick, send sick children to school or daycare, or - in the worst situations - lose their job because they cannot come to work.

Working Women Need Paid Sick Days

• In every corner of Maryland, women care for their families and also bring home a significant share of their household income.
• Two-thirds of all family caregivers are female, yet women-dominated industries are among the least likely to offer paid sick days.
• Forty-three percent of women working in the private sector are unable to take a single paid sick day.
• Twenty percent of women with children in the private sector are unable to take a single paid sick day.
• Nearly one in four American women report physical or sexual abuse by a husband or boyfriend at some point in their lives. Paid safe days protect the paychecks and jobs of victims of domestic violence, stalking, or sexual assault when they need time off to seek assistance.

Paid Sick Days Protect Families

• Children inevitably get sick and they get better faster when their parents care for them. Parents without paid sick days are more than twice as likely as parents with paid sick days to send a sick child to school or day care. They are also five times more likely to report taking their child or a family member to the emergency room because they were unable to take time off work during normal work hours.
• For the typical family without paid sick days, just 3.5 sick days without pay is equivalent to losing an entire month of groceries. For single-parent families, which are often headed by women, the situation is even worse.

Paid Sick Days Improve Public Health

• Workers without paid sick days are more likely to go to work sick, and more likely to delay needed medical care, leading to prolonged illness and costly health problems.
• Between September and November 2009 – the H1N1 flu pandemic’s peak months – 8 million workers went to work sick, and may have infected 7 million of their coworkers.

Paid Sick Days Benefit Businesses

• Paid sick days benefit employers by reducing turnover.
• Workplaces are healthier when sick workers are able to stay home. The spread of disease slows, workplace injuries decrease, and workplaces are both healthier and more productive.
• “Presenteeism” or workers under-performing because of illness, is estimated to cost employers $160 billion per year—twice as much as the cost of absenteeism.
• Workers with paid sick days are 28 percent less likely than workers without leave to be injured on the job, according to the National Institute for Occupation Safety and Health.
• Adults without paid sick days are 1.5 times more likely to report going to work with a contagious illness.

If you  or your organization wants to join MBTPI and the other members of the Working Matters coalition, click here.