Workers Comp Zone


In the next week we’ll probably see Governor Brown act on a handful of pro-worker bills of interest to the workers comp community.

But in terms of sheer impact, the sick leave bill that Brown recently signed is probably the most important achievement for workers this year.

The bill, AB 1522, called the Healthy Workplaces, Healthy Families Act of 2014  (D-Lorena Gonzalez) will provide limited sick leave benefits to many hard working  Californians who previously did not have such a benefit. Backers claim that up to 40% of California’s workforce does not have paid sick leave benefits.

That’s an astounding figure, particularly to many of us who work for companies with generous sick leave policies.

AB 1522 does not supersede existing sick leave policies that some companies have. Some workers are exempted from coverage.

Workers  covered under AB 1522 will still have to earn sick leave and must have worked at an employer for up to 30 days  within a year of commencing employment before acquiring sick time. Thereafter, employees would gain one sick leave hour for every 30 hours worked.

The bill provides  that paid sick days may accrue and be carried over to the following year. However, employers may limit their use to 24 hours or three days in each year. No accrual or carry over is required if the full amount of leave is received at the beginning of each year. It provides that an employer has no obligation under to allow an employee’s total accrual of paid sick leave to exceed 48 hours or six days. Employers are not required to cash out unused sick leave.

Sick leave can be used for diagnosis, care or treatment of an existing health condition (or preventive care) of an employee or the employee’s family member. It can also be used by an employee who is a victim of domestic violence, sexual assault, or stalking.

The bill says that “If the need for paid sick leave is foreseeable, the employee shall provide reasonable advance notification. If the need for paid sick leave is unforeseeable, the employee shall provide notice of the need for the leave as soon as practicable.”

AB 1522 had been on the Cal Chamber’s 2014 Job Killer List. According to the Cal Chamber, AB 1522 is a costly employer mandate. After amendments to the bill, the Cal Chamber took it off the Job Killer list, but remained opposed.

The Cal Chamber had argued in opposition as follows:

While many employers voluntarily offer sick leave for full-time employees, expanding this mandate to temporary, seasonal and part-time employees will create a huge burden on employers.

The Employment Policies Institute recently published a limited study on the effects of Connecticut’s Paid Sick Leave law that went took effect in 2012 and only applies to larger employers and non-exempt service workers. Although the survey was admittedly limited in the number of businesses evaluated, the results indicate the new law has had a negative impact on growth and jobs. Of the 156 businesses that responded to the survey, 31 of the businesses had reduced other employee benefits to balance the cost of the paid sick leave; 12 had reduced employee hours; 6 had reduced employee wages; 19 companies had raised their prices; 6 companies had laid off employees; and, 16 companies stated that they would limit their expansion in the state. Thirty-eight of the businesses surveyed also indicated that they would hire fewer employees as a direct result of the new law, while others stated they planned to offer fewer raises.

Similar results were reported in the February 2011 Institute for Women’s Policy Research on the effect of the paid sick leave program in San Francisco. Specifically, out of the employees surveyed, 15.2% of the employees surveyed were laid off or had their hours reduced after the program was implemented; 14.1% of the employees surveyed received fewer bonuses or had their benefits reduced; and, 21.7% of the employees had increased work demands. Out of the industries surveyed, businesses with 24 or fewer employees were the most negatively impacted by the paid sick leave program. Moreover, the report provides that “low-wage workers were more likely than higher-wage workers to report that their employers took action to reduce costs in implementing” paid sick leave in San Francisco.

In July 2014, employers in California were faced with a $1.00 increase in the minimum wage. This $1.00 increase is in addition to the other cumulative costs employers are already facing including increased personal and sales taxes under Proposition 30, higher worker’s compensation rates, reduction in the federal unemployment insurance credit, higher energy costs, and increased costs associated with the implementation of the Affordable Healthcare Act. A recent study conducted by the California Foundation for Commerce and Education found that operating costs for California businesses are, on average, 19% higher than competitors in the rest of the nation. California employers cannot absorb all of these costs and be forced to provide paid sick leave without cutting other costs such as labor. Accordingly, AB 1522 will impact jobs as well as future growth. “

Perhaps there is some risk that companies will locate in Texas or Nevada as a result of the perceptions or cumulative effects of workplace mandates.

On the other hand, some workplace mandates would seem to be a matter of fairness and good health policy.

The arguments in favor of AB 1522 are compelling.

It is in the public interest to have a healthy workforce, not a sick workforce. Forcing people to work when they are sick or when they do not feel well is often counterproductive.

I’d rather not be exposed to your flu, much less your Ebola virus.

Many lower-rung workers are faced with choosing their health and their family’s well-being or their job.

AB 1522 is a limited response to that dilemma.

How does this affect workers’ comp?

Ultimately, many injured workers will benefit. The reality is that many injured workers end up having to take time off work that will not be covered by workers’ comp temporary disability payments.

Sometimes the worker has maxed out the allowable temporary total disability (104 weeks). Sometimes the worker may not feel well due to the effects of the work injury and may stay home from work, but be unable to get in to the doctor right away to get an off-work certification.

Sometimes an injured worker’s family may need to take time off to assist the worker if home health care is not provided after a surgery.

So requiring that employers provide earned sick time to workers will help some injured employees retain their jobs and help their family members stay employed.

Too often we look at workers comp as an island, without appreciating the synergistic framework that other benefits and worker protections can offer. This is an example of how other legislative efforts can really help injured workers.

Here is the link to the history and text of AB 1522:

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Julius Young