Mandating Sick Pay Is just Sick

Paid sick time could be mandated by New Hampshire law if current legislation survives any proper vetting.  HB 662 would require all New Hampshire employers with 10 or more employees to offer five days of paid sick time every calendar year.   

Honestly, it’s a nice idea to suggest that workers deserve a few paid sick days.   And maybe they do.  But instead of the state mandating it by law, and then raising taxes to document, track it, regulate and enforce it, why not simply invest our legislative time and resources into improving the business climate in New Hampshire?   A superior business climate attracts more businesses who will then compete for the available pool of employees by offering better wages, benefits, and maybe even paid days off, on terms they can each agree to without the unnecessary burden of oversight and regulation that drives up costs and depresses wages and opportunity.

It is clear that the New Hampshire House needs to spend more time figuring out how to get out of the way of small businesses in New Hampshire so they can succeed on their own instead of trying to regulate every aspect of the employee-employer relationship.

But that's not the the current plan.

If you are willing to jump down this rabbit hole this Fosters.com article covers most of the salient claims.  But its full of unpleasant side effects legislators never consider on the path to warm and fuzzy regulations.

 So what might those be?  

There is no free lunch.  With the best of intentions the state is mandating increased labor costs independent of the employee employer relationship, with no regard to the kind of business or the nature of the work.  It seeks to abrogate an aspect of negotiation--more pay or more benefits, and the end result is to depress wages and hours across the board under the assumption that everyone will need or want five paid sick days simply because someone in the New Hampshire House and some focus groups leaned in that direction. 

This law as currently written would only affect employers with 10 or more employees.  Can anyone see just how awesome only having nine employees just became?  As a small business owner the state has now defined a portion of your business plan for you, where the magic number ten adds a base of 50 days worth of additional payroll costs  to your bottom line the minute you cross it and that number grows every time you hire from that point on. 

The bill ignores human nature, particularly in the industries it claims to be helping.  Yes managers pressure workers to come in but no amount of legislation can fix that because employees who are not sick call out even without paid sick time benefits.  They call out for all kinds of reasons, most of them a reflection of a desire or need to do something other than report to work.  And correct me if I’m wrong but don’t we already have a manifold of laws to promote that kind of behavior at the federal level?  So to suggest that a state level mandate supports a healthier work environment ignores the reality of the workplace.  Yes, some people will use that time when they are sick, but will just as often use it for other things.  Supporters insist they have provided some protections for employers from abuse (see below) but ignore the simple fact that the best protection from abuse would be for them to stop meddling in the private arrangements of employees and the employers who pay them for their labors.

As proof that legislatures should resume a hands off approach, one of the supposed protections to businesses (to prevent abuse) include requiring a doctor’s note for any absence of three days or more.  But this assumes that abusers would take three days or more at one time.  People who want to work who are actually out that long are probably sick and not taking advantage of the free ride.  But what if they do not feel the need to go to a doctor?  The state is effectively mandating doctors office visits just to get a note so that the employees avoid the other protection built into the law--that employers are free to terminate abusers without employee recourse.  "No note" could equal abuse which introduces problems of inter-company politics where some people might be excused without a note and others not, and more than likely drag the state--at taxpayer cost--into a regulatory or mediary role if problems are reported by an employee who was terminated or by any other employee who feels the law is being applied unevenly to other employees. 

Meanwhile, anyone who feels inclined to extend their weekend by calling out on a Friday or a Monday (or both)--something that might actually constitute abuse--may do so without recourse by law.   Abusers are rewarded with protection while people who are legitimately sick could be burned unless they pay for a doctors visit to avoid the risk of termination. 

Great law.  

Given the current economic conditions, our state’s growing anti-business inclinations, and the federal government’s wholesale assault on income generators, adding additional labor costs to small businesses is more than likely going to prompt employers to make do with existing staff until they feel that the investment (including the cost of paid sick days) is worth the risk to their business plan and their bottom line.  That means fewer jobs thanks to state law. 

State mandated sick time will very likely depress wages to some degree in every industry forced to comply with the state law.  You could just as easily ask employees if they’d like their wages depressed in exchange for sick days, but that fails to hide the real costs, and government is all about hiding costs from people. 

It also ignores the fact that the incentive to seek employment based on benefits has a secondary effect of motivating workers to expand skills or experience to make themselves more attractive to larger companies that can afford more generous packages without significant impact from a legal mandate on their bottom line.   This migration also opens up opportunities for people seeking employment who may not be as concerned with sick days or other kinds of benefits, or whose skill set is more suited to positions with fewer demands or more flexibility.  

I suppose mandated paid holidays for private businesses are next?  No religious ones of course—imagine all the fuss that would start.  Only state employees can get that.  Go figure.  But a nice package of five civil holidays sounds good.  Families feel a lot of pressure to stay home on Arbor day and Flag day.  The State had best get on the stick and make this happen before the window closes. 

HB662 will just make the business climate more cumbersome and grow the government regulatory bodies needed to enforce it at taxpayer expense.  Depressing wages and increasing taxes.  If that doesn't sum up the philosophy of our democrat legislature I don't know what does.

Comments

[NH Lady]

Great reason to keep your workforce to 9 or less is absolutely correct.

Otherwise you could be paying for up to 50 days of sick pay each year.

As a small business owner, I already give my employees (part-time and fultimers) one hour of vacation/sick time for every 40 hours worked for employees with less than 5 years employment and 1.5hours per 40 hours for employees who have been here for over 5 years. They can use the time in whatever way they choose. They also get paid for all major holidays.
I do this by choice and resent anyone meddling in my business.

[Steve M]

And you should resent it. The state must stop electing busy-body nihilist legislators who are obsessed with writing laws to see their names upon them.

We need people who are there to protect us from excessive regulation, not who strive to appear useful simply through the number of bills they write.