Milwaukee Third Municipality to Pass Paid Sick Leave Ordinance

Medicalcare This past Tuesday, the voters of the City of Milwaukee overwhelmingly (68%) approved the sick pay ordinance. Under this ordinance, private employers in Milwaukee must provide paid sick leave to workers, who earn the benefit at the rate of one hour of sick pay for every thirty hours of work.

The Milwaukee Journal-Sentinel reports:

Employers would have to grant 72 hours of sick leave per calendar year or 40 hours if they have fewer than 10 employees.

Although the ordinance is due to take effect in about 100 days, the Metropolitan Milwaukee Association of Commerce has filed notice that it intends to legally challenge the law on the grounds that (1) it is inconsistent with federal and state laws for family and medical leave; and (2) oversteps the city’s authority to require sick pay from employers outside the city that have employees living in Milwaukee.

I am no expert on the second issue, but the first ground of challenge seems utterly without merit.  The federal FMLA and state leave law provide a floor under which no law may go, but states and municipalities have always been free to be more generous, and, in this case, provide some paid leave to workers.  The fact that the business group believes the ordinance will cause them economic harm is not grounds for setting the ordinance aside.

I am hopeful that the court deals quickly with this matter so that the ordinance can go into effect when scheduled and start providing much-needed relief for the workers of Milwaukee when they become sick.

This Post Has 9 Comments

  1. Lenny Hanson

    So basically you don’t think that people should have to prove themselves as productive enough employees BEFORE receiving benefits like this? Do you know anyone who has lost their job because they missed too many days for 100% legitimate illness-related reasons? Congratulations, voters like you have voted jobs for low income workers right out of the city. Think before you act next time.

  2. Brigid Moroney

    Here’s my concern about this ordinance: What if a private company has employees in both the city of Milwaukee and…Wauwatosa for example. Just because one employee happens to work at the office located across the street from the city of Milwaukee border (in Wauwatosa), he/she will be negated the benefit of paid sick days enjoyed by his/her counterpart working for the same company in the very same position at the Milwaukee location. That just doesn’t seem fair.

    I understand federal legislation with a similar initiative has been introduced (Healthy Families Act)…so why a ballot initiative in Milwaukee? More generally, why mandate paid sick days in a specific city?

    While paid sick days sound great in theory, limiting the mandated provision of such benefits to employers in the city of Milwaukee seems like it will generate inequity for those companies that employ individuals both within and outside the city limits.

  3. Tom Kamenick

    I wonder how many law firms will be able to afford part time law clerks during the school year if they have to give them paid time off?

    I also wonder how many people who currently have, say, 2 weeks of vacation and 3 paid sick days will simply see a week of their vacation time, which they can schedule in advance, shifted to sick time, which they can’t?

  4. Bruce Boyden

    My only concern with this ordinance is the same as the mayor’s, and a variation on Brigid’s: Company X, deciding whether or not to locate in Milwaukee or Wauwatosa (or Chicago), now has a disincentive to locate in Milwaukee. Paid sick leave is a great benefit, which I assume means it’s an expensive benefit. Which means it might be an important part of the decision of where to locate, or stay.

  5. Paul M. Secunda

    Thanks for all the comments everybody!

    Let me see if I can respond to some of the concerns raised:

    1. The cost of doing business by providing up to nine days of sick leave per year is not a great enough disincentive to locate in Milwaukee, all others being equal. Indeed, the argument may be that you will get more productive employees who are better motivated if they have better benefits.

    2. I do believe that until there is a federal paid leave law which supersedes this ordinance this a possibility of employers just shifting their costs so that given great pay for sick leave, there is something less of some other sort of compensation (pension, health insurance, wages, vacation days, etc.). I do think a paid version of the FMLA for at least 7 days is a realistic possibility in this administration.

    3. The federal law’s passage will also address the inequities between employees in the same companies in different locations.

  6. Tom Kamenick

    I’m less concerned with possible location or relocation than I am with how current employees will be treated. Small or not, this increases the cost of employing workers. An employer can shift around vacation and sick days for full-time employees to make up the difference (harming the employee in the process – who would rather have sick days in lieu of vacation days?), but part-time employees do not offer that sort of flexibility.

  7. Richard M. Esenberg

    Paul writes that “[t]he cost of doing business by providing up to nine days of sick leave per year is not a great enough disincentive to locate in Milwaukee, all others being equal.” In some cases that will certainly be true, but, without reducing other forms of compensation, this mandates an increase in labor costs of just over 3%. It does it, moreover, for businesses who have concluded that either the labor market or the value added by those employees currently not receiving this benefit doesn’t warrant providing it. For businesses with high labor costs and low margins (something that I suspect describes a significant number of service businesses, particularly in lower income areas), there may well be impacts on relocation, business start-ups, business survival and expansion, and employment levels.

    Even where this does not happen, there may be, as Paul points out, countervailing reductions in other forms of compensation. It’s not clear to me why this is a good thing. Why should the city decide that 9 paid sick pays are worth the loss of 3% in cash compensation?

    As for the argument that “you will get more productive employees who are better motivated if they have better benefits,” I am always skeptical of arguments that the state must force people to act in their self interest. Many employers have reached the conclusion that paid sick leave is a desireable thing. Others – the ones affected by the ordinance – have decided that it is not. Maybe its just because some of them are greedy exploiters of the working man and woman, but these are precisely the firms that are going to take that 3% back from some other form of comp.

    The problem with this type of ordinance is that whatever benefits it confers are obvious, while its costs are hidden. ordinance becomes effective.

    But I’m not sure that it will. The state law claims seem substantial.

  8. Kyle Hartman

    Any new statute or ordinance comes with its own implementation problems, and this one is no exception. Setting aside the increased labor costs, the ordinance also increases the administrative and legal costs to existing employers, a particularly important consideration in light of current economic realities.
    As of yet, guidance regarding the implementation or enforcement of the ordinance is unavailable, creating more questions than answers for employers. For example, a similar ordinance in Washington D.C. at least attempts to enumerate what is required of employees to request leave, when it must be requested, employer responses, and specific penalties for failure to comply. In contrast, Milwaukee’s ordinance simply states that an employer may not impose unreasonable barriers to use of paid sick leave.
    Clients have already inquired if they can use the vacation policies, originally offered to attract and motivate their employees, to meet this city mandated requirement. Provided that existing policies meet the accrual requirements of this ordinance, and whatever administrative rules regarding requests for leave are issued, I think the answer is yes– compliance with this ordinance will certainly come at the expense of other employee benefits or compensation. Unfortunately, this ordinance may better serve counselors and litigators than employees or employers.

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