Paid Sick Leave in Jersey City Off to Healthy Start, Rutgers Report Concludes

Hank Kalet | April 10, 2015 | Health Care, Social
But business leaders argue that at one-year anniversary it’s too soon to understand full import of policy

Assemblywoman Pamela R. Lampitt (D-Burlington and Camden)
It was no surprise when advocates for low-wage workers and groups representing business came to different conclusions this week about a report on the impact of local earned-sick-leave rules in Jersey City.

After all, the two sides have not seen eye to eye since the city introduced and passed its ordinance in 2013, and they have remained at odds as eight other towns have passed their own sick-leave rules. Business groups have filed suit to stop a Trenton ordinance passed by voter referendum from taking effect.

This disagreement also frames the debate in the Legislature. Democrats are touting an Assembly bill that would require all New Jersey companies to provide earned sick leave, and its sponsor, Pamela Lampitt (D-Camden), expects it to come up for a vote before the legislative session ends in June. Republicans have criticized the bill, and Gov. Chris Christie has said earned-sick-leave mandate would cost the state jobs.

One thing that both sides do agree on is that the debate is over jobs.

“Jersey City has added jobs at a faster clip than the state as a whole,” said Ann Vardemon, an organizer with New Jersey Citizen Action who directs the Main Street Alliance, a business group that endorses the earned-sick-leave rules. “It hasn’t been the job killer that Christie and others have gone on the record saying about paid sick days.”

Michele Siekerka, president of the New Jersey Business and Industry Association, which has more than 20,000 business members, said it is too early to know what the impact will be.

“Many of those companies in Jersey City may not have had people exercise their days off, so we may not know what the carryover means for business,” she said. When the employee takes off, “you are then paying two employees for one shift — the one who is sick and the replacement — which becomes expensive for a small business.”

Jersey City was the first of nine municipalities in the state to adopt earned-sick-leave rules, passing its ordinance in late 2013. It went into effect in January 2014. Newark was next, in January 2014, followed by East Orange, Irvington, Montclair, Passaic, Paterson, and Trenton. Bloomfield joined the group earlier this year. A hearing is scheduled for April 16 on the challenge to the Trenton law.

Under the Jersey City ordinance, workers at companies that employ 10 or more people can earn an hour of paid sick leave for every 30 hours they work, up to a total of five days for the year. They can carry over unused sick leave into the following year, under the ordinance. Companies with nine or fewer employees must provide the same amount of sick leave, but they are not required to pay employees for their time off.

Despite this provision, the vast majority of smaller businesses are offering paid sick time, according to the Jersey City report, which was conducted by the CWW Center for Women and Work at Rutgers University and released on April 1. It was required as part of the original Jersey City ordinance.

According to the report, which was written by Danielle Lindemann and Dana Britton, 80.3 percent of the 289 employers surveyed said they were providing earned sick days, with three-quarters of them having done so before the law took effect in January 2014. Of those businesses providing leave, 91.3 percent are providing paid leave — with 88.2 percent of smaller businesses doing so. A total of 289 Jersey City employers and 198 employees were interviewed via telephone in January and February, with results adjusted to account for disparities in sample size. The margin of error was plus or minus 5.5 percent for businesses and plus or minus 7 percent for workers.

“I think (the number of employers providing paid leave) was a surprise, and a good thing, ultimately,” said Jersey City Mayor Steven Fulop. “A lot of employers are recognizing that offering paid leave creates a better work environment.”

The report also found that 31.7 percent of businesses “saw increases in productivity, improved quality of new hires, or a reduction in turnover due to the law.” The percentage was higher “among those who changed their policies due to the law,” the report said, with 41.8 percent reporting improvements.

The report also found that:

  • “28 percent of employers who made changes to their existing policy in response to the law reported a reduction in the number of sick employees coming to work.”
  • “92.4 of employers said that there has been no change in their employees’ use of sick days,” with just 3.4 percent saying workers were taking more time off and 4.1 percent saying workers were taking less time.
  • 35.9 percent of workers on the job for at least a year “reported that their employers were more supportive of taking leave and 37.2 percent indicated higher job satisfaction.” The numbers were higher for workers who saw an increase in available sick time, 84.4 percent saying “employers were more supportive of leave taking” and 71.9 percent claiming “higher job satisfaction.”
  • [related]“Overall,” the report said, “our findings reveal a number of positive impacts of the ordinance on businesses and employees in Jersey City and many areas in which the impact has been essentially neutral. Though the short time span since the adoption of the policy means that the effects of the law have not yet been fully realized, even at year one, many benefits are evident.”

    Business groups criticized the report. Michael Egenton, vice president for legislative affairs at the New Jersey Chamber of Commerce, raised questions about the report’s authors because the Center for Women and Work is pro-labor and pro-sick-leave.

    “This wasn’t just Rutgers,” he said. “It was the Center for Women and Work, which has a bias. We just question whether you are going to have a study that is tilted toward the findings they want to come up with.”

    He also questioned the timing of the report.

    “One year (of data) doesn’t make for a valid and reliable study on the implications of sick leave on a jurisdiction,” he said.

    Report co-author Dana Britton, director of the Center for Women and Work, said the report relied on academically accepted methodology for data collection and analysis. Data collection was conducted by the Eagleton Center for Public Interest Polling, using the Dun and Bradstreet index of businesses, and the questions were developed jointly by the two academic centers. Data from employees was collected via phone surveys.

    Just as importantly, she said, the report’s findings “tracked pretty closely with results of other studies in Connecticut, the San Francisco and Seattle studies.” Those other studies also found that “most business did not need to change their policies, most offered sick days and most were paying their employees.”

    She also said that a year “is a good moment to check in.”

    “You certainly want to check in early on,” she said. “Could things change over time? There is no evidence to believe that things will be disastrous going forward because most said it was easy to comply.”

    Egenton is not so sure. He said the issue is not necessarily sick time, but the aggregation of mandates being placed on business by all levels of government, — what he calls “death by a thousand cuts.”

    “One law or provision will not be the death knell, but multitude of restraints” — including the minimum wage and its indexing to the Consumer Price index, the Affordable Care Act, and other regulations — create a problematic atmosphere for business.

    “Unless you have made payroll, then you don’t know the trials and tribulations of managing a business operation,” he said. “If sick leave means that costs will rise, you are going to find employers challenged. They will be scaling back hours, not hiring, scaling back benefits. The report fails to recognize these drawbacks.”

    This is the argument that Gov. Christie has made. The governor, whose office did not respond to requests for comment, said during a March town hall meeting in Fair Lawn that he supported paid sick leave for individual businesses, but mandating it would create new expenses. As reported, the governor cited “the real fear of job loss” and the likelihood that it would make “New Jersey less competitive than the rest of the country.”

    Other Republicans have made the same argument. After A-2354 was approved by a 6-4 vote in the Assembly Budget Committee, Assemblyman Anthony Bucco (R-Morris) called it “another straw on the camel’s back.”

    “If we keep going the way we’re going, our business climate can’t get any worse,” he said.

    Both Assembly Speaker Vincent Prieto (D-Hudson) and Senate President Steve Sweeney (D-Gloucester) have said they support the state earned-sick-time bill. Assemblywoman Lampitt said the state bill, which is similar to Newark law and would require paid sick leave for all businesses, is being revised to include “some minor amendments.” She expects it to come up for a floor vote before the Legislature adjourns in June.

    “Having access to days off is vital to the success of taking care of our elderly, of our young students’ health and the welfare of the community,” she said. The report, she added, should help create some additional momentum for the bill, because it “basically said life isn’t going to end” if sick leave is mandated.

    “They’ve seen very little abuse,” she said. “There have been no fires to put out and they are realizing this can be done.”

    Sen. Loretta Weinberg (D-Bergen), the Senate sponsor, said the Senate will act once the Assembly completes its work. She agreed that the report should help.

    “Certainly it was positive,” she said. “It seemed to indicate that, like other issues when people predict the end of the world, it didn’t quite happen.”

    Fulop said Jersey City might consider amending its law to match the others in the state to ensure that we are “being consistent with other municipalities.” This is why he supports a statewide effort.

    “We have spoken to Speaker Prieto about this,” he said. “The Legislature has a lot of influence, but it is only two of the legs to getting any legislation passed.”