New York City Council Approves Sick-Leave Requirement for Small Businesses

Entrepreneur

The New York City Council today passed a bill requiring many small businesses to provide five days of annual paid sick leave to their employees.

The legislation, which passed 45–3, is expected to go into effect next April, affecting companies with 20 or more employees. In October 2015, it would begin applying to New York City businesses with 15 or more employees. Next, the bill will go to Mayor Michael Bloomberg's desk, although he has said he will veto it. The Council is expected to have enough votes to override any veto attempt.

Supporters say the legislation will provide necessary economic security for workers, while opponents are concerned the new requirement will discourage hiring among small companies during a time of high unemployment.

After fighting the bill for three years due to concerns over its economic impact, Christine Quinn, speaker of the City Council, now says the local economy is strong enough to handle it.

"I think this is just a great day for city workers, with a million workers now going to get sick leave," Quinn said at a press conference. At the same time, she said "the smallest of businesses, those that operate on month-to-month cash flow," are exempted from the new law, as is the still-struggling manufacturing sector.

Workers can use the sick leave when they or an immediate family member get sick, as well as during public health emergencies.

Related: New York City to Require Employers to Give Paid Sick Leave

In the City Council chambers, council members rose before the vote to comment on the sick-leave bill. "We can celebrate today for the million workers, but we cannot celebrate for the hundreds of thousands who are not included in this," said Councilman Charles Barron.

Councilman Peter Vallone, who identified himself as a former small-business owner, said the Council should stop telling entrepreneurs how to run their businesses "before we run them into the ground." He voted against the legislation.

Attitude New York, a local limousine company, has more than 70 employees and doesn't currently provide paid sick leave for its 40 to 50 chauffeurs, though it does for its managerial staff. "If everybody feels like they can just take their five days regardless [of whether they're sick], that could be very expensive," says Rosina Rubin, chief operations and financial officer for Attitude New York. Her husband founded the company in 1986 and she joined in 1990.

But some entrepreneurs, particularly in the tech industry, are not flinching. "I don't think we'll even blink at it," says Shane Snow, founder of Contently, a 30-month-old tech startup with 18 employees. Top tech startups already offer excellent benefits, Snow explains, because they must compete with Google and other progressive companies for elite talent. And digital work can be done remotely, making it easier to offer as much time off as needed, "so long as you get your work done," which Snow says is the policy at Contently.

Besides, Snow says employee happiness is crucial at a small company. "If you put your people in a bad financial position just because they got sick, they're not going to be excited to come to work, and neither will their coworkers," he says. "And guess what? Before you know it your business is lagging, people are leaving."

Although it isn't the first of its kind in the United States, the New York City paid sick-leave bill could influence other urban hubs to adopt similar legislation. San Francisco, Washington, D.C., Milwaukee, Philadelphia and Seattle have already passed mandatory sick-leave laws. Portland, Ore. passed such a bill earlier this year that will go into effect in January 2014.

If a critical mass of cities is reached, sick-leave laws could come up for votes in state legislatures and in Congress.

"I absolutely would like to see the state [of New York] pass legislation of this type, as well as I would like to see the federal government pass legislation of this type," Quinn said. "I hope New York City taking this action will get other jurisdictions to think about what actions they should take."

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