Monday, August 25, 2008

Should businesses be reviewing paid leave policies in advance of the Healthy Families Act?


The above-the-fold headline on the front page of Sunday's Plain Dealer business section reads, "Employers consider altering benefits before voters decide sick days issue." A whole lot of ink has been spilled in law firm newsletters all over Ohio discussing this very issue. As the article notes, some lawyers are recommending and business are considering making revisions to benefit plans and leave policies now, to potentially lessen the blow if the Healthy Families Act passes on Nov. 4.

This debate centers around two sentences in the proposed law, section 4114.07:

(B) An employer with a leave policy providing paid leave options shall not be required to modify such policy, if such policy offers an employee the option at the employee’s discretion to take paid leave that is at least equivalent to the sick leave described in this section.

(C) An employer may not eliminate or reduce leave in existence on the date of enactment of this Act, regardless of the type of such leave, in order to comply with the provisions of this Act.

Some are considering changes now because of 4114.07(C). Before the law passes, a company will be able to reduce employees' vacation days to insert paid sick leave, or amend its current leave program to switch to a paid time off system. After the law goes into effect, however, current leave programs cannot be subtracted from to add the 7 paid sick days.

The question in my mind is what does "leave that is at least equivalent to the sick leave described in this section" mean? Is is leave that an employee can for his or her own physical or mental illness, injury, medical condition, or professional medical diagnosis, or that of a child parent or spouse? Or, does the leave have to comply with the subtle nuances of the statute, such as lack of notice, incremental leave as small as 1 hour, and no medical certification for leaves of less than 3 days?

If a business has policies that, alone or take together, enable employees to take 7 paid sick days, that business should, in theory, be okay under 4114.07(B).

If companies try to get out in front of the OHFA and change their personnel policies now by converting vacations in paid time off, which can be used for any reason including sick leave, will business still have to grant an additional 7 days of sick leave if the PTO they do grant does not meet the OHFA's minimum requirements for the use of paid sick days?

Common sense would dictate that a day that can be used as a paid sick day should suffice, and the other nuances are merely administrative and can be added in after the fact by businesses if the OHFA passes. However, there is nothing common sense about this law. Businesses run a real risk by making any changes in advance of the election. They very well might end up paying double benefits.

In other words, their are serious pros and cons to making any changes now.

 

Pros Cons
7 days that an employee can use for sick days is equivalent to the overall leave provided for in the HFA, and therefore should suffice under 4114.07(B). Ambiguities in the proposed law mean that any changes made now might not suffice unless the paid sick leave is tracked feature-by-feature, such as no notice and leave in 1 hour increments.
Waiting to make changes risks not be able to subtract from current benefits, thereby adding the cost of 7 paid sick days. Making changes now risks that they will not suffice under the statute, thereby adding the cost of 7 paid sick days.
Employees may prefer a more flexible leave program. Negative employee morale by changing leave plans, such as eliminating vacation days.
PTO policies offer employees greater flexibility in how they use their time off. PTO policies provide employers less control over how employees use their time off.

 

Any decision about amending leave and benefit policies in advance of the election is not a easy as it might sound. These decisions must be carefully thought out after weighing these pros and cons.

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