Patti Dunham, MA, MBA, SPHR
Melissa Weigand
In November 2008, Ohio voters will most likely have the opportunity to determine whether employers with 25 or more employees will be required to provide their full time employees with seven paid sick days per year. Similar to the smoking ban and minimum wage which Ohio voters passed in November 2006, this proposed Act may become law as a result of a ballot initiative. If passed, Ohio would be the first state to pass such a law but may not be the last as there appears to be a growing trend for consideration of such types of legislation.
If you haven't heard of the proposal or haven't sunk your teeth into it, it is definitely time to learn as much as you can about this impending Act and its potential impact on your organization. Although the proposed Act remains somewhat vague, here are some of the highlights:
- Ohio Healthy Families Act (HFA) applies to all employers with 25 or more employees.
- HFA Provides 7 paid sick days for full time employees (defined as those working 30+ hours) and pro-rated amounts for part-time employees to care for themselves and their families' health needs.
- The paid days begin to accrue immediately upon hire; accrued time can be used after 90 days.
- Employees would be able to carry over up to seven sick days each year, although it is still unclear if there is a limit to the total amount that can be accumulated in a sick leave bank (i.e. is there a maximum?)
- Time can be used for almost any "undocumented" medical reason for the employee or for the employee to care for a child, parent (including inlaws), or spouse which is the result of a physical or mental illness, injury, or medical condition or to obtain a medical diagnosis or preventative medical care.
- Employers cannot require a medical certification unless the time off exceeds more than 3 consecutive work days and the employee has 30 days to provide certification.
- Employers cannot count paid sick leave as an occurrence under a no-fault attendance policy.
Although it is pretty clear that employers will be required to provide seven days of paid sick days, most of language in the Act is poorly drafted. There are a lot of ambiguities and as Greg Rogers, Partner with Taft Stettinius and Hollister LLP, Cincinnati, stated "…(most) of which will only be clarified through the litigation process, if it is deemed constitutional." Constitutionality of such an Act will no doubt be in question in Rogers' opinion, as requiring employers to pay someone to do nothing will most likely be challenged in the courts.
Is such an Act, if enacted, potentially unhealthy for employers? It's possible! This piece of legislation would require employers to comply with this law without reducing or eliminating leave the organization already has in place. Although this is unclear, it appears that even PTO banks may not be "safe" although they appear to be the best bet for employers. A recent survey conducted by SHRM indicated that 55% of HR Professionals responded that their organizations offered sick leave as part of a paid time off plan, only 37% offered a separate sick leave plan. Does this mean that 55% of us will need to add separate sick time to our PTO banks? It is still unclear. Much discussion has surrounded the example of an employer who provides ten days of paid time off (which employees may use at their discretion for sick, vacation, or personal time) and whether or not that would qualify as the seven paid sick days. Some attorneys feel that may in fact not be enough. Employers may need to modify the policy so that seven of the ten are specifically for sick days and the remaining three would be for the employee's choice…it is unclear.
What does appear to be clear is that this proposal may potentially take a big chunk out of businesses' budgets. A small employer of 25 with an average wage of $10.00/hour who only offers vacation time today would have to incur an additional $3000 in gross wages per year just to comply with the act. This does not include the additional cost for taxes, workers' compensation, overtime, productivity, etc. that can cause that number to rise significantly, not to mention the amount of time in administration and tracking of the benefit. These potentially significant costs to businesses will no doubt cause Ohio employers to be less competitive in a time when we are trying to promote business in the state.
So how do we prepare? There has been some consideration by companies on how to financially prepare for what they feel will be the inevitable passing of this legislation. Many organizations have already begun making changes to their current policies in anticipation of the Act. Thoughts include eliminating attendance bonus programs, making adjustments to other benefit plans and even making adjustments to compensation increases for 2009. Obviously, employers are going to have to revise many of their existing policies governing attendance, including discipline (no-fault attendance policies) as well as paid time off policies. The best advice? Get prepared! A recent study by Policy Matters Ohio, a Cleveland-based liberal think tank found that 2.2 million Ohioans would see their benefits expanded if the measure passes. That's 2.2 million who are likely to vote for its passing! Talk with your attorney on their recommendation on how to handle the potential change within your organization. Many local law firms are providing seminars specifically addressing the issue and how to prepare for the change. Don't wait; you need to talk with your attorney sooner than later on their recommendation on how to handle the potential change within your organization to avoid unhealthy impact.
Patti Dunham and Melissa Weigand are with Strategic Human Resources, Inc.
(http://www.StrategicHRinc.com). If you have any questions or would like to share your comments or success stories with either of these consultants, contact them via Patti at:
Patti@StrategicHRinc.com.
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