Diagnosing A Defeat: Why The Sick Leave Bill Failed

Last winter, it seemed all but inevitable that New York City would become the latest city to pass a law mandating that all city businesses provide paid sick leave to their employees.

A coalition of worker-rights groups, including Make the Road New York, the Working Families Party and the legal advocates A Better Balance had lined up to push for the legislation; a veto-proof majority of 37 city councilmembers had not just endorsed but co-sponsored a bill that would require at least five days of annual leave for all workers. And with the nation in the grip of swine-flu panic, visions of restaurant cooks showing up sick for work had even some small business owners admitting that some kind of sick-leave law was probably inevitable.

One year later, the Paid Sick Time Act is virtually dead, after Council Speaker Christine Quinn declared in October that “now is simply not the right time for a measure that threatens the survival of small business owners.” After more than a year of tense political battles and dueling economic impact surveys, the sick leave bill slipped into legislative limbo with a simple two-page statement by a single elected official.

It’s a denouement that seems to have stunned even the bill’s opponents. “It’s tough to dispense with a bill that seemed to have so much support from councilmembers,” says Jack Friedman, head of the Queens Chamber of Commerce, who was anticipating having to settle for a compromise bill. “But we’re happy. These are tough economic times, and that bill would have cost a lot of money to small businesses.”

Make the Road New York co-director Andrew Friedman (no relation) was equally surprised, albeit unhappily. “My instinct was that we were going to perhaps have a compromise that was offered to us that was going to be less than what we wanted,” he says. “It’s unusual that a bill has such broad support in the council and nothing happens.”

The reason, it turns out, is about far more than a shift in public concern from public health to the economy. Piecing together the reasons behind sick leave bill’s abrupt plummet from political favor reveals a story of political maneuverings by some unexpected players, the murky science of calculating the economic impacts of new worker-rights policies, and a political system that vests incredible power in the council speaker. And through it all, the question of the merits of paid sick leave—whether it would be a boon to low-wage workers, a catastrophe for small businesses, or both—has largely gotten lost in the shuffle.

A Health Crisis?

San Francisco passed the nation’s first comprehensive sick-leave law in 2006; Washington, D.C. followed suit two years later.

No one truly knows how many city residents are unable to take paid time off when they’re sick. The Community Service Society, in an analysis released last year of data from its annual “Unheard Third” telephone survey of New Yorkers, estimated that between 1.65 million and 1.85 million city residents—about 48 percent of the private-industry workforce—received no paid sick time, and between 1.3 million and 1.5 million (39 percent) had no paid leave time at all. Paid sick time is particularly lacking in industries typified by low wages, small staffs and poor unionization: For example, more than three-quarters of workers in leisure and hospitality jobs, like those in restaurants and food service, had no paid sick leave, according to the CSS survey.

As a result, say advocates of mandatory paid leave, workers stay at work when sick not only to avoid losing a paycheck, but because they’re afraid of losing their jobs. Andrew Friedman cites one Bushwick short order cook who, after working seven days a week for years, became so sick that his legs were shaking as he worked. After his boss told him he couldn’t go home, he eventually called an ambulance and was admitted to Woodhull Hospital—and promptly fired.

A survey by the University of Chicago’s National Opinion Research Center found that nearly one-quarter of people nationwide say they’ve been threatened with losing a job for calling in sick, notes Vicki Shabo of the D.C.-based National Partnership for Women and Families, which is spearheading the national push for sick-leave laws. “At a time when it takes 42 percent of unemployed workers six months or more to find a new job, that’s not a tenable situation.”

Instead, many workers say they just suck it up and head for work—even when it means risking infecting their colleagues, or putting sick kids on the school bus. Such “presenteeism,” according to some researchers, presents a growing—and hidden—cost to the economy. “Right now there’s all these ads, ‘If you’re not feeling well, don’t get on the train,'” says Andrew Friedman. “I don’t know how they think all these people without paid sick leave are going to get to work.”

With horror stories like this as the backdrop, Manhattan Councilmember Gale Brewer introduced a bill last year to require businesses with fewer than 20 employees to offer five paid sick days a year; larger companies would have to provide nine days. (This is actually less stringent than San Francisco’s law, which requires nine sick days for any company with 10 or more workers.) Sick time could be used for oneself or to care for a sick child or family member.

Business groups immediately opposed the sick-leave bill, with the city’s borough Chambers of Commerce banding together to form the 5 Boro Chamber Alliance to fight it, charging that some businesses could be out tens of thousands of dollars. Yet with 37 of the council’s 51 members—though notably not Speaker Quinn—signed on to the bill, the Alliance began meeting with Brewer in an attempt to hash out a compromise.

Dueling Surveys

The landscape abruptly shifted, however, in May, when Quinn broke her silence to declare that she was putting the bill on hold until fall, when the Partnership for New York City, the city’s largest business group, planned to release its own survey of employers on sick-leave policies. The bill’s backers griped that the Partnership didn’t represent small businesses (it describes its own members as “a select group of two hundred CEOs from New York City’s top corporate, investment and entrepreneurial firms”) and was biased by its stated opposition to sick-leave laws. But Quinn insisted that the bill would wait until the employer study was complete.

The promised survey, conducted by the mammoth audit firm Ernst & Young, painted a dramatically different picture of the city sick-leave scene. Where CSS had found that 39 percent of workers had no paid leave time at all, the Partnership estimated that figure as a mere 12 percent. And where sick-leave proponents figured that any added costs to businesses would be minimal—as the costs of sending employees home with pay were offset by the savings from increased productivity and reduced presenteeism—the Partnership study projected $789 million a year in added costs, most of it borne by companies that already provide generic leave time, but would have to re-jigger their policies to meet the specific sick-time requirements in the bill, by adding sick days and revising rules that made some heavy business periods off-limits for time off.

The result was a battle royale over the merits of the competing studies. Advocates of the CSS approach argued that the Partnership’s survey amounted to little more than a web poll: E&Y explained in its report that in order to “maximize the number of businesses that received the survey,” it had made sure that “any employer with access to the internet in New York City could respond to the survey.” By allowing companies to choose whether to take the survey, critics charged, the Partnership study left itself open to “selection bias”: If businesses that provide sick time are more likely to respond and fill out the form, then that could skew the survey’s findings.

Partnership research director Merrill Pond confirms that no attempt was made to account for self-selection bias, but adds, “Given the wide distribution and the large number of responses, we believe that the results provided a robust sample for analysis.”

The Partnership, meanwhile, critiqued the CSS study for its relatively small sample size (1,212 people). Nancy Rankin of A Better Balance, who helped CSS produce its sick-leave study, responds that unlike the Partnership web survey, theirs was a random telephone poll whose sample size was reflected in the study’s stated margin of error of +/-2.8 percent. Furthermore, she notes, the Partnership asked employers only about their typical workers, lumping together policies for different pay grades: “We know that if you’re top management and you’re in the corner office, you get paid sick days. If you’re cleaning the corner office, you don’t.”

The more politically important number, meanwhile, was that $789 million annual cost to businesses, a figure that Ernst & Young derived by multiplying an estimated 0.3 percent increase in employer costs by the total payroll of all private firms in the city. Fully 60 percent of that figure the Partnership attributed to increased costs at companies that already provide sick leave, on the argument that businesses that provide general leave time—not specified for sick days or vacation—would be forced to scrap those plans and instead provide sick-only leave. (The Partnership report cited an Urban Institute study as having reported similar effects in San Francisco after that city passed a mandatory paid sick leave law; however, a reading of that study finds that it says nothing about cost to employers who already offered paid leave.)

This proved to be yet another bone of contention. The bill itself says that any company that provides “an amount of paid leave sufficient to meet the accrual requirements … is not required to provide additional paid sick leave or paid sick time for such employee.” Partnership CEO Kathryn Wylde says that lawyers she consulted said this wasn’t good enough, and that “City Council legal staff agreed with us”; Brewer’s office insists Council legislative staff felt the language was fine as it was, and would not affect companies that already provide paid leave.

Quinn Lays Down The Law

It was details like this that were expected to be hashed out in negotiations. But that never happened—something that each side blames the other for. “I think there was general agreement that something that was more geared towards protecting the jobs of people who were sick, particularly in the food industry, was a legitimate cause that everybody could get on board with,” insists Wylde. “It’s just that there was no interest on the part of the advocacy groups in having that conversation. They wanted all or nothing.”

Retorts Andrew Friedman: “I’m 100 percent sure that’s not true. I know where we started and where we ended, and there was a real willingness to compromise even on fundamental aspects of the law. I know the speaker’s folks know that too because they were in conversation with us.”

Friedman does credit Quinn for making “a good-faith effort to try and figure whether there was a way that nobody was ecstatic about but would make real incremental progress. But I think she had a hard time figuring out how.”

In D.C., the compromise came from exempting from the sick-leave law certain sectors—recent hires and employees whose income is derived partly from tips—something that New York’s sick-leave advocates had ruled out as unacceptable. (In San Francisco, paid sick leave was presented directly to voters as a take-it-or-leave-it referendum; one of the complaints from that city’s small business owners was that they didn’t have a chance to influence the final legislation to ease such problems as increased paperwork requirements.) But where Washington councilmembers had adapted the final legislation by incorporating several items from a list of proposed amendments provided by the D.C. Chamber of Commerce, Quinn’s October surprise pre-empted any similar action in New York.

The question remains: Why? Tea-leaf readers have tended to assume that when presented with a decision that was destined to anger at least one important constituency—her Democratic base was strong supporters of sick leave, but she’d likely want to court the backing of business leaders (and Mayor Bloomberg, a strong opponent of the paid sick leave law) for a 2013 mayoral run—Quinn decided to punt, using the Partnership study as cover. (Quinn’s office did not respond to questions about her reasons for opposing the bill.) “There wasn’t really a moment where we were sure she was going to champion this bill,” notes A Better Balance director Sherry Leiwant. “I think she was sort of hoping it would go away.”

And while the Council had the numbers to pass the bill over Quinn’s objections, that’s something that’s never happened in recent Council memory. “We could have called it up on the floor,” Brewer acknowledges. “But having been around since John Lindsay, I know that not all sponsors would have voted for it.”
The reasons, say veteran council-watchers, are entrenched in a political culture of deference to the Council leader. With the council speaker having the power to control committee chairmanships and the monetary stipends that go with them—known as “lulus”—it’s been almost impossible for councilmembers to muster support for any bill without the speaker’s blessing.

“I remember some councilmembers saying, ‘I’d like to vote with you, but I can’t because if my lulu is taken away, I can’t pay my mortgage,'” says former councilmember Sal Albanese, who tried eliminating speaker-controlled perks in the early 1990s, but couldn’t gain support (and was denied a committee chair as punishment).

Albanese says that things have improved slightly thanks to increased media scrutiny, but only slowly. “I was removed as committee chair on three separate occasions for voting against the leadership,” he says. “That has improved.” Still, he notes, committee chairs are still appointed by the speaker, and the speaker alone, and lulus remain intact.

“The unfortunate thing,” says Albanese, “is that the state legislature is so much worse, nobody’s paying attention to the City Council. They’re considered a bastion of competence and can-doism.”

An Uncertain Future

The future of paid sick leave legislation in New York is now cloudy at best. Quinn says she’s open to reconsidering the legislation “in a better economy,” though she hasn’t provided specifics.

Following Quinn’s dismissal of her bill, Brewer shot off a press release insisting that “the time has come for paid sick days in New York City and we will not stop working until it is a reality.” She says she’ll be meeting with Quinn every two months to discuss reviving the bill: “It’s only the first chapter, and there are many, many more chapters to go.”

Proponents of paid sick leave can take heart in the fact that legislation is moving forward elsewhere: The National Partnership for Women and Families notes that there’s broad legislative support for statewide sick leave laws in both Connecticut and Massachusetts, which could help pave the way for future compromise legislation that’s acceptable to both worker advocates and business leaders.

Still, Queens Chamber of Commerce head Jack Friedman isn’t too concerned. “We’ll watch it and see what happens,” he says. “But knowing politics, when things like this are put aside, they’re generally put aside for longer periods of time rather than shorter periods of time.”