Last Tuesday, the Montgomery County Council unanimously passed a bill requiring all employers to provide employees with sick leave and time off.
The Bill, which was introduced in November 2014, is one of the strongest paid sick leave laws in the country because it will apply to all workers in the county. The Bill says, “An employer must provide each employee earned sick and safe leave for work performed in the County paid at the same rate and with the same benefits as the employee normally earns. A tipped employee must be paid at least the County minimum wage… for each hour the employee uses earned and safe leave.”
“The external costs of individuals making that choice between a day’s income or a day spent showing up to work sick are borne by all of society,” said At-Large Council Member and Council President George Leventhal at the Council Meeting held June 23 in which the Bill was passed. “It is public health imperative that employees don’t show up sick. It is a public health imperative that those employees that have the least bargaining power have some minimal protection so that they don’t lose the income that they need to stay housed and to be secure and stable.”
The bill does not go into effect until Oct. 1, 2016, the delay according to Leventhal allows businesses more time to prepare for the new law and fully understand the amount of extra paperwork needed to be done as a result.
Employers with fewer than five employees must provide each employee with both paid and unpaid sick and safe leave for work performed in the County.
The bill requires employees to accrue paid leave before accruing unpaid leave in a calendar year. The accrual rate of sick and safe leave for employees is equal to one hour of sick leave for every 30 hours worked. The bill limits the amount of paid sick leave an employee can take in the calendar year to one week or 56 hours of accrued paid sick leave, for companies with more than five workers.
Smaller companies are required to grant less paid sick leave. Companies with fewer than five employees are only required to grant 32 hours of paid earned sick leave and 24 hours of unpaid earned sick leave in a calendar year.
All employees are limited to 80 hours of earned sick and safe leave in a calendar year.
While the bill was ultimately passed by a unanimous vote, the bill’s impact on small businesses was the big sticking point for some Council members and the Gaithersburg-Germantown Chamber of Commerce.
“While most of our members provide paid sick leave to their employees, many don’t provide sick leave for their part-time employees,” said Marilyn Balcombe, president of the Gaithersburg-Germantown Chamber of Commerce. “This is particularly true for our very small employers. The bill creates both an administrative and financial burden. It’s a double-whammy for small employers because they often don’t have the bookkeeping and administrative support to keep record of the accrued leave and while it may seem like a small task, it is one more thing that takes away from the task of running a business.”
“Our overall view of the bill was that there shouldn’t be a cookie-cutter approach for paid leave,” said Balcombe. “There are a lot of nuances in employee compensation. Some employers might pay a higher hourly rate with fewer benefits or offer more flexibility in lieu of paid leave. By requiring paid leave, some employers may change other aspects of their compensation – provide fewer hours or reduce holidays.”
“It’s all personal,” said District 2 Council Member Craig Rice during the Council debate on the bill. Rice represents the Germantown and upcounty area. “We all have stories either personal or we have heard from folks who have stories about how sick leave made sure that they were able to take care of loved ones, to take care of personal needs, and still retain their job and retain their economic stability. We also must look at the stability of these businesses that employing the employees as well. Many small businesses struggling every day to make ends meet, and those are the lifeblood of Montgomery County when it comes to our economic stability.”
At-Large Council Member Nancy Floreen said, “I see from the County analysts that it has the implication of costing local businesses over $40 million. That is a lot of money. We want to make sure that while we do good things for our community, we don’t lose the jobs that these benefits are associated with. How do we find a path that serves the interests of employees, but also recognizes the really important role of jobs, and jobs provided by the small business community in particular? Big businesses already do this; we are not talking about that. We are talking about small businesses here.”
Balcombe said the Chamber of Commerce worked with Councilmembers to make the bill less burdensome for small businesses. She said that the Chamber was able to move the date the Bill takes affect back, allow for electronic notification of accrued leave, and clarify that companies already offering paid-time-off would not have to alter drastically their current program or offer more than 56 hours of total leave for full-time employees, among other changes.