The City of Tempe is exploring joining the ranks of San Francisco, Seattle and New York City in mandating businesses located in town to provide paid sick leave for employees. Although no formal drafts have been presented of such an ordinance, the council reviewed the possibility at a September 17th working session. It is another bad idea from the college town which seems to care more about maintaining their progressive image than being business friendly.
Not only is it highly offensive that the city believes it has the right to control how a business administers sick leave, it is simply poor policy. These types of regulatory controls burden businesses and ultimately inhibit growth. Policymakers who intend to help the “working person” with such proposals pit the employee against the employer and wind up harming both. This one-size-fits-all approach ignores the diversity of industries, enterprise size, margins and an infinite number of other factors and complexities. Take for instance restaurants – serving staff frequently change their shifts with one another in order to accommodate sick or personal days. This flexibility tends to work out in the wash for both the restaurants management of the bottom line as well as for employees.
Small businesses especially will feel the pain. For many of them, mandatory minimum sick leave days will factor into their cost/benefit analysis of hiring additional employees. It is another cost they will have to absorb. This will be accomplished by not hiring, cutting current benefits, eliminating hours or diminishing profits. All these options have a deleterious effect on the economy. The idea that a regulator knows best, how to direct such an intimate policy within every individual business, is absurd.
This seems to be a “solution” looking for a problem. A study by the Freedom Foundation found most businesses provide a number of paid sick days, workplace illness is not a widespread issue, and mandatory paid sick laws do not reduce employee turnover. Instead of promoting healthy work environments, such laws seem to be more of a power grab for governments. Were Tempe successful, they would be expanding their authority greatly. Additional authority requires more money to support enforcement. Businesses would then incur the costs to track and report to their local city on top of business licenses, taxes and other regulatory hardships.
Tempe’s notion is not just harmful to the economy, it is also illegal. In 2013, the state passed legislation preempting political subdivisions on issues of workers compensation, paid and unpaid absences, rest periods and meal breaks. Critics will claim that such legislation was rendered void when a Flagstaff coalition won a voter ballot initiative in 2006 allowing cities, towns and counties to determine their own minimum wages if they exceed that of the state minimum. However, in a stipulated judgement by Attorney General Brnovich, the voter initiative was specific to minimum wage and does not impliedly repeal that of the state statute’s other provisions. If Tempe chooses to move forward, a lawsuit is likely to ensue which will deem the ordinance unconstitutional.
Legalities aside, Tempe is venturing into dangerous territory when it comes to attracting and retaining businesses. Such extreme invasive policies are likely to isolate their community and make them less competitive with surrounding jurisdictions. In their effort to create a “workers’ paradise,” they are harming the very entities who provide the work.