PAYDAY Workforce Solutions Blog

President Obama is Serious About Wage and Paid Sick Leave Issues

On Sep 24, 2015

President Obama chose Labor Day to take action on paid sick leave. On September 7th, he signed an executive order requiring federal contractors to provide up to seven paid sick days a year to their employees, impacting 300,000 workers. He spoke in Boston about the benefits to employers and employees of paid sick leave, and de-emphasized the costs. He chose Boston as the place to talk about the importance of paid sick leave because Massachusetts passed a paid sick leave requirement in late 2014. Opponents say that the new law will result in lost jobs and lower pay, but payroll services can help eliminate possible cost increases while improving efficiency.

What Obama Wants from Congress

Along with signing an order making federal contractors provide paid sick leave, the president wants Congress to pass legislation for family and medical leave in the private sector. With 40 percent of the private-sector workforce without these protections, and the only wealthy nation in the world without mandated paid sick leave, vacation leave, or parental leave, the U.S. lags far behind countries like Luxembourg, Norway, Finland, Austria, and Germany that provide more than 40 paid sick days to workers who need time off for long term treatment and five paid sick days for common illness like the flu. President Obama wants Congress to pass the Healthy Families Act to guarantee seven days of paid sick leave per year to private sector workers, plus spend $2.2 billion to help states develop paid leave programs.

State Paid Sick Leave Legislation

The executive order follows four states that have implemented paid sick leave legislation. Connecticut led the charge in 2011 with its Paid Sick Leave Actrequiring employers to allow employees to accrue one hour of paid sick leave for every 40 hours worked, up to 40 hours per calendar year. California followed with the Healthy Workplaces, Healthy Families Act of 2014, requiring one hour of paid sick leave for every 30 hours worked, entitled to be taken after working 90 or more days. Massachusetts joined the paid sick leave bandwagon in November 2014, with voters approving a proposed earned sick time law that would give employees at companies with 11 or more employees up to 40 hours of paid sick time per calendar year. Oregon’s new sick leave law was signed in June 2015 to give up to five paid sick days a year

Obama Administration Initiatives

The newly signed executive order that requires paid sick leave for employees of federal contractors is just the latest of wage and leave laws the Obama administration is trying to pass. The administration has plans to help Americans meet work and family responsibilities with a knowledge base about work-family policies, paid parental leave for federal employees, expanding the Family and Medical Leave Act (FMLA), helping families with child and elder care costs and options, and enforcement of equal pay laws. The President currently has a more difficult task because of the Republican-controlled House and Senate, but he plans to do everything possible to make his initiatives happen.

What Employers Should Do

Employers should stay informed of local laws and proposed laws regarding paid sick leave, and watch for Congress’ action on the issue. Other areas considering sick leave legislation include Washington State, Chicago, Illinois, and Philadelphia, Pennsylvania.

Washington State is currently considering statewide sick leave legislation, Chicago is getting ready to vote on paid sick leave, and Philadelphia lawmakers are debating it. Employers should find out how the governors in their states feel about state and local paid sick leave, and pay attention.

Employers should review their time off policies, communicate the status of paid sick leave laws and pending legislation, and review tracking and reporting capabilities. Federal contractors have to follow the implementation of Obama’s latest executive order for compliance with accrual tracking, policy changes, and payroll procedures.

When sick leave becomes law, PAYDAY can help employers set up and maintain sick leave in compliance with the regulations.


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