America may be one of the last countries in the world to adopt a national paid sick leave policy for its workers. But that will soon change, thanks to the latest regulatory announcement made by the Obama Administration.
In this rule, federal government contractors will be mandated to provide paid sick leave for their employees. Beginning in January of 2017, employees will be eligible for up to 7 days of paid leave a year.
This law continues President Obama’s string of initiatives aimed to improve the working and living conditions of America’s working class and provides a much-needed relief for households, especially those homes where children or seniors require attention on a sporadic basis (sick days, doctor appointment, etc.)
In a recent article in the New York Times, Thomas E. Perez, the labor secretary, issued the following statement: “This is really part of a broader conversation across America about what a 21st-century social compact should look like.”
Who will this rule primarily affect? To start, this study suggests that more than 35% of private workers currently do not have access to paid time off. This means that employees are choosing between taking off from work and losing the day’s wages, or working while sick. It’s a problem that affects the bottom sector of wage earners in vastly more significant ways.
For example, the chart below outlines the percentage of wage earners that have access to paid sick leave. The earners in the highest 25% bracket are 2.2 times more likely to have access to sick leave than those working in the lowest 25% bracket.
Source: BLS National Compensation Survey – Benefits.
While the rule will help more than 1 million workers better balance their professional and personal lives, it’s been met with concerns from many corporations who suggest that the law will be a compliance nightmare. The rule will impact several industries more significantly. Small businesses and fast food franchises stand to be hit the hardest. While many contractors may have a policy in place, many of these policies will need to be amended to comply with the new national standards. This may mean increasing paid leave across the board in lieu of granting better benefits to only part of your staff.
The bill, referred to as The Healthy Families Act, was forged under President Obama’s executive orders, after the bill spent years stalling in a stagnant congress. During his two terms in office, President Obama has pursued several aggressive regulatory changes to better support the current economy and its workers. Prior to this latest regulation, the administration has pushed through several rules designed to provide basic working rights to America’s struggling middle class sector.
