TESTIMONY
PARTNERSHIP FOR NEW YORK CITY
by Kathryn Wylde
PRESIDENT & CEO
New York, New York
November 17, 2009
press release (PDF 70K)Testimony Submitted to the New York City Council Committee on Civil Service and Labor
Intro 1059, Paid Sick Leave
Thank you, Chairman Nelson and members of the committee for the opportunity to testify today regarding Intro 1059, Paid Sick Leave legislation. The Partnership represents 200 leading businesses, mostly international organizations that are headquartered in New York. Partnership members employ about a million people in New York City and contribute over $150 billion to the annual Gross City Product.
We agree that the City Council has a role to play in establishing public health policies that help prevent the spread of the H1N1 virus and other contagious conditions. We also agree that employers will benefit from adopting policies that allow employees to deal with health emergencies. We do not agree, however, that intervention by municipal government as contemplated in Intro 1059 is appropriate or practical. Nor do we think it is the right time to enact a local ordinance that will most certainly result in the elimination of jobs and business closings during the highest period of unemployment since the Great Depression – an effective rate that exceeds 17%.
Backers of this legislation suggest that it would affect only a minority of New York City employers who currently do not offer paid leave and are ignoring public health considerations. They claim it would add just $5.37 per week per employee to employer costs. None of these claims are true. We have had this bill reviewed by a large number of employers who currently provide generous paid leave policies, many as part of collective bargaining agreements, and every one indicates that they would be affected by this bill as currently drafted. So far as we can tell, no New York City employer would be exempt.
The proposed legislation is so broad and prescriptive that virtually no private sector employer offers the package of benefits that it requires. Employers we represent estimated their benefit costs could increase by as much as 40 percent as a result of full compliance with this bill. In one typical example, an employer figured their costs would increase by $1,682 per employee per year or $32.34 per week. Companies we surveyed estimate the cost of implementing Intro 1059 anywhere from $2.8 million to $14 million a year, for just their local employees.
Second, the bill would introduce new uses for paid sick leave that exceed what is standard in collective bargaining agreements, corporate policies and in the federal Family Medical Leave Act. For example, eligibility in this legislation extends beyond an employee and their immediate family to great grandparents, second cousins and others. Paid sick leave could be used for any “health-related” purpose and extend to issues such as violence, domestic violence and sexual harassment. The bill would override reasonable notice provisions regarding use of paid leave that most current policies include, leaving employers with inadequate notice to get backup help to cover absences.
Third, Intro 1059 would require renegotiation or cancellation of collective bargaining agreements that are currently in place, since they would be in violation of the proposed law. Intro 1059 mandates a one size fits all approach that does not allow flexibility for workers or employers.
Fourth, many New York City employers have a workforce in multiple jurisdictions. For them, the bill creates complex administrative burdens and has implications for maintaining parity among their employees across the country. One company estimates that achieving parity under this bill, which they feel would be necessary, would cost them at least $20 million a year.
There are a number of other problems raised by the bill. For example, many employers make cash payments for unused sick time when employees leave the company. This could not continue under a law that would require employers to reinstate unused time if an employee leaves and returns to service within one year. Employers that currently offer unlimited sick time would likely terminate this practice under a law that is so expansive in defining eligibility for leave. Productivity gains, which might be achieved through paid sick leave, would likely be offset by the bill’s prohibition of monitoring the use of sick time to prevent abuse. Retailers and other companies that have black out dates for paid leave as a result of seasonal demands would be particularly vulnerable to the new mandates and these are industries that already operate on thin margins.
Should the City Council move forward with a paid sick leave mandate, the Partnership contends that it should exclude small business (generally defined as companies with 100 or fewer workers); exempt companies that are party to collective bargaining agreements; and exempt those companies that already have paid leave or reimbursed leave policies. The bill should not allow the use of paid sick leave to care for extended family and eligibility for leave should begin after one year (standard practice), not on the 90th day of employment.
Federal action that is narrowly targeted to employees with contagious diseases would be preferable to municipal legislation, since it would not disadvantage New York City employers against competitors operating in other jurisdictions. Similarly, if the city wants to encourage paid sick leave, tax credit incentives for employers that provide such leave would reduce the risk of job losses.
As always, the Partnership is prepared to work with the Council to identify appropriate ways to address the public health and economic justice concerns that are the motivation behind a bill that, while well-intentioned, would cause serious collateral damage to our economy.
About the Partnership for New York City
The Partnership for New York City (www.pfnyc.org) is a network of business leaders dedicated to enhancing the economy of the five boroughs of New York City and maintaining the city’s position as the center of world commerce, finance and innovation. Partnership companies account for nearly 7 million American jobs and contribute over $740 billion to the national GDP.