Paid maternity and family leave has been championed as the next big leap for the U.S.’s workforce, but it’s not the only place we should seek progress. Shockingly, one out of every four employees in the U.S. doesn’t have paid sick leave—a fact that reveals problems that are not being adequately addressed. Taking a sick day shouldn’t cost you a day’s wages, but unfortunately for millions, it does.
States Starting to Wake Up
Thankfully, states all over the country are rising to the challenge and giving this issue, which impacts everyone, legislative attention. Places like Maryland, Rhode Island, Washington, and Arizona, among others, are requiring businesses to offer paid sick leave—a trend I believe will and, more importantly, should continue.
People get sick, regardless of their age, location, demographic, or job, and sick leave policies draw a clear line between the haves and the have-nots. Those without paid sick leave are not well-off bankers and lawyers but rather hourly and part-time employees such as servers, bus drivers, and janitors. Most of those roles already make less than salaried, full-time workers and could financially struggle without a day’s pay. So, without paid sick leave, they are forced to choose between a paycheck and their health if they fall ill.
Additionally, hourly workers are less likely to be offered benefits like health care, leaving them to pay doctors’ bills out of pocket. When they get sick, they are faced with a choice: being able to afford rent, groceries, and utilities (not to mention any medical bills) or toughing it out and going into work. As a business owner with responsibilities that can’t be placed on hold when I’m ill, I can’t count how many times I’ve had to work through a sick day, regardless of how terrible I felt. The situation is even more challenging for hourly workers who have to do the same with added financial stresses.
Changing these laws levels the playing field, freeing hourly and part-time workers from the burden of unpaid sick days, which is a good thing. These laws can also help reduce the likelihood of sick employees coming to work ill and infecting their coworkers.
Who Bears the Costs?
But, for all the good these changes will bring, business owners will bear an unfortunate but unavoidable cost—a cost that will hit small and midsize businesses the hardest. The cost includes paying for employees’ sick time, as well as the expenses involved in complying with all of the detailed rules contained in the laws.
Most of these states’ laws mandate time-off accrual based on hours worked, but each state has different guidelines for rollover, usage, recordkeeping, and data retention (sometimes for up to 3 years). These complex rules impose a substantial accounting and HR burden on organizations trying to comply with the law, especially for those working with paper and spreadsheets.
From an HR perspective, using spreadsheets and time cards to keep exhaustive records and navigate compliance laws takes up valuable time. Even a well-staffed HR department is likely to spend at least 2 hours a week, at the bare minimum, on compliance, which translates to 2 full workweeks a year. This burden could also be much larger depending on the number of employees and the number of offices. That time would be better spent focusing on company culture and executive leadership.
Software to the Rescue
Many firms will look to software to automate their processes, but they have to be careful of which solution they choose. Not every solution can support ever-changing laws, and some may instead lead to employers having out-of-date information.
As companies take advantage of software to streamline the implementation of these laws, the overall cost becomes more manageable. Despite the costs and impacts these laws have on businesses, I do believe these laws are necessary and in the best interest of both workers and employers.
Brett Derricott is a serial entrepreneur and an active angel investor. He’s been recognized by Utah Business magazine’s Forty under 40 for his business acumen and is also the founder and CEO of Built for Teams, an HR intelligence platform that helps business leaders understand, manage, and grow their human capital.