California businesses sharply divided on expanded paid leave proposals

Two bills that would expand workplace benefits for employees are dividing California’s small business community as the industry works to recover from deep pandemic-related losses.

Senate Bill 616, authored by Sen. Lena Gonzalez, D-Long Beach, would increase the number of paid sick days employees can use from three to seven days per year while also expanding the number of paid sick days that can be accrued each year from seven to 14.

Assembly Bill 518, authored by Assemblymember Buffy Wicks, D-Oakland, would broaden California’s paid family leave program so employees could have paid time off to care for loved ones who aren’t members of their family but are “considered family,” such as an elderly neighbor or friend, for example.

Under current law, family members are restricted to spouses, domestic partners and blood-related relatives, including children, parents, grandparents and siblings.

The legislation applies to every business that employs individuals “under any appointment or contract of hire and includes the state, political subdivisions of the state, and municipalities.”

Adriana Soto, a hostess at the Disney California Adventure Park in Anaheim and a member of the United Food and Commercial Workers Local 324, firmly supports SB 616.

“This is an important bill to ensure workers can stay home when we’re sick without having to worry about being disciplined, losing our job or feeding our family,” she said.

Others aren’t so keen on the legislation.

David Houston, who owns five Barney’s Beanery locations in Pasadena, West Hollywood, Burbank, Santa Monica and Westwood, fears expanded sick time would be abused. He employs about 300 workers.

“When people know they will be paid for sick days, they’re going to take them, whether they’re sick or not,” he said.

Richard Christenson, vice president of Quality Aviation in Fontana, agreed.

His business supplies parts to the aviation industry and offers two weeks’ vacation to employees. But Christenson said workers could easily use some of their expanded sick time for additional vacation days.

“We’re not allowed to ask,” he said. “We can’t say, ‘Did you go to the doctor?’”

Houston and Christenson’s predictions run contrary to a new poll from the Small Business Majority that finds strong support for expanding workplace benefits for employees.

The poll, conducted by Lake Research Partners, reflects a survey of 400 small business owners in California with three to 100 employees.

The report found that 87% of small businesses support paid family leave policies, including a recent state law that expanded job protections to guarantee up to 12 weeks of protected leave for employees while on extended sick, family, medical, disability or parental leave.

And 86% support a policy that would give workers paid family leave to care for someone other than family, but who is “like family.”

AB 518 has garnered heavy support from Equity California, a Los Angeles-based nonprofit that advocates for LGBTQ rights.

“Families come in all shapes and sizes,” said Jorge Reyes Salinas, a spokesperson for the organization that employs about 35 workers. “In the LGBTQ community, those who are related by blood may not be the ones who are the most supportive to these people.”

Salinas said his organization saw the need for legislation like AB 518 during the Monkeypox health emergency last year.

“Some employees lost their income when someone they knew who fell into that ‘chosen family’ category contracted it, and they had to take time off to care for them,” he said.

Bianca Blomquist, California policy director for the Small Business Majority, said employers feel the expanded benefits would help them attract and retain quality talent.

“Our research shows that small business owners in California believe it is important to have access to a host of benefits to retain employees and obtain financial security,” Blomquist said in a statement.

The poll notes, however, that 91% of businesses are financially struggling to provide flex time to employees while 88% are struggling to provide maternity leave and 83% are strapped in their effort to provide paid family medical leave.

Gonzalez, who co-authored SB 616 to provide employees with additional sick days, said the legislation makes sense.

“During the pandemic, we saw the immensely positive outcomes of having COVID-related sick leave, preventing more outbreaks in workplaces, averting prolonged illness amongst employees and maintaining workplace productivity,” Gonzalez said in a statement.

The worst of COVID-19 may be over, she said, but her bill would help address ongoing health issues that routinely crop up among businesses.

“Life happens and people get sick,” Gonzalez said. “Ensuring the health and safety of workers should be just as important now as it was when we were at the height of the pandemic.”

While more than 150 organizations support the measure, more than 60 are firmly opposed, including the California Chamber of Commerce.

The Chamber has placed the legislation on its 2023 Job Killer List, saying it “imposes new costs and leave requirements on employers of all sizes,” and that “small employers throughout the state are already struggling” to implement and comply with enacted leave mandates.

Art Solis, who co-owns four 3.99 Pizza Co. restaurants in Covina, West Covina and Montclair that employ a total of around 20 workers, has a problem with AB 518.

“It’s crazy,” he said. “A lot of small mom-and-pop businesses still haven’t recuperated from COVID-19. I still have rent that wasn’t forgiven to me that I owe, and then to sit here and have more employees taking paid family leave?”

Solis said expanding such benefits would ultimately force employers to reduce their roster of full-time employees so they could hire more part-time workers with fewer benefits.

“And the minimum wage keeps going up,” he said. “They keep throwing darts at small business owners. We can’t keep up with it.”

The Small Business Majority poll shows that small business owners would be “extremely interested” in applying for a grant if California had such a program to help them cover costs associated with an employee going on leave.

More than eight in 10 are interested in applying for the grant, while only 18% are not, polling shows. Owners of larger businesses tend to be more interested in this program than owners of smaller businesses.

Wicks, who authored AB 518, said California’s current paid family leave policy reflects “an outdated nuclear family model” and only allows workers to receive partial income replacement to care for certain narrowly defined family members.

“Who we count as members of our family and choose to care for includes so many more Californians than what our current laws recognize,” Wicks said in a statement.

The Sacramento-based California Landscape Contractors Association, one of two organizations that oppose the measure, says “small businesses often do not have or can’t afford full-time human resource professionals to manage and track all the various requirements coming from new Sacramento employment regulations.”

Both bills now need to clear appropriations committees — in a year the state is facing a nearly $32 billion budget deficit.

SB 616 would incur first-year costs of $804,000, according to the Department of Industrial Relations, and $760,000 annually thereafter. The bill analysis states the administrative costs to the California Department of Human Resources and the California workforce have yet to be determined.

And AB 518, according to the Assembly Appropriations Committee, would incur one-time costs of approximately $3.7 million and ongoing costs of approximately $900,000 annually to the Employment Development Department. The bill analysis states this legislation will result in approximately $26 million in additional benefits paid in 2024.

Fiscal effects on the workplace for both bills have yet to be determined, according to their respective analyses.

While the California budget does not include specific funding for paid sick leave expansion, it does have $4.2 million to implement the changes required by SB 951, which starting in 2025, will increase the amount Californians receive through the state disability insurance program when they take time off work to care for an ill family member or a new child.

“Paid leave has been a top priority for Gov. Newsom since day one — taking action to increase benefits, expand access to millions more workers and strengthening protections to these crucial programs,” spokesperson Alex Stack said.

At a press conference earlier this month, Newsom said, “Broadly speaking, of course, I’m supportive of those specific bills. It comes at a price and comes with a consideration of cost. We look forward to doing more in the future, we just have to balance those priorities against others.”

Source: Orange County Register