The 2017 Maryland General Assembly is underway. As they do in every session, lawmakers are considering some significant issues over the next three months that will impact Marylanders for years. What’s different this year is that Maryland, a longtime petri dish for Democrats, has a Republican governor who, in year three of his first term, holds an exceptionally high job approval rating.
How a Republican governor is so popular here may seem like a head-scratcher, but in Governor Larry Hogan’s case, it’s no mystery. He’s made good on several commonsense promises that have benefited all Marylanders, not just those who lean right. His ability to broker deals while maintaining Republican principles and practices, however, will be tested this session by an issue that’s once again infecting Annapolis: paid sick leave.
Though it has surfaced many times historically, legislation requiring Maryland employers to offer paid sick leave benefits to workers gained momentum in 2016 when it was pushed aggressively by Democrats and passed in the House of Delegates before later dying in the Senate. But like a once-latent boil, it’s back.
The gist of the Democrats’ proposal stipulates that employers with 15 or more employees would be required to provide their workers with seven days of earned sick and safe leave annually, paid at the same wage rate as the employee normally earns. These benefits would also extend to part-time employees. Proponents believe this would guarantee paid sick leave for 500,000 Maryland workers who Dems allege don’t already have it.
Recognizing that the Democrat-led bill would resurface this year, Hogan introduced his own version of paid sick leave legislation, proposing that it apply to businesses with 50 or more employees. Part-time employees would be covered after a minimum of 30 working hours. If a company already has a general leave policy that meets these minimum requirements, the state will leave them alone. The state will also honor existing collective bargaining agreements with unions.
Maryland companies with less than 50 employees that choose to offer paid sick leave will be eligible for tax breaks, exempting the first $20,000 of their income from taxes. Hogan’s legislation will also provide protection for seasonal industries by exempting workers employed for less than 120 days over a 12-month period. Paid sick leave requirements are already enacted in a small number of states and local jurisdictions, including Montgomery County, but none offer tax breaks like Governor Hogan’s.
Democrats argue that paid sick leave is the right thing to do and makes Maryland companies more competitive and attractive to potential employees.
Republicans, on the other hand, insist that the mandate would burden employers, making them less likely to hire additional workers or retain current ones, consequently worsening Maryland’s already unfavorable business climate.
It’s fair to say that people who are ill yet feel compelled to work put others at risk, especially in the food service industry. Think, for example, how quickly and ferociously the stomach flu ravages everyone — and every toilet — in your home.
On the face of things, paid sick leave legislation sounds nice. After all, who would say “no” to the idea of employers giving employees paid time off for being ill? Even a 2015 Goucher College poll suggests that it’s a popular policy. Three quarters of respondents indicated they support it for Maryland employers with just 10 or more employees. But a look at the issue under the microscope reveals that it is not only too complicated to poll but also deadly for Maryland businesses. Here’s why.
This type of government intervention in the workplace adds layers of convoluted bureaucracy to businesses, which in turn impacts employees, departments, technologies, budgets and more. Employers deal with sick employees well enough on their own and almost always offer some paid sick days.
Additionally, legislated paid sick leave invites abuse. Having an available supply of prearranged Monday morning hangover days on hand will multiply the number of employees who just don’t feel like going to work that day.
The greatest impact, however, will be on increased payrolls. Even a small percentage payroll bump will be detrimental to companies operating on thin or break-even margins, effectively wiping out their profits.
In short, paid sick leave, regardless of which party proposes it, is policy looking for problems. Governor Hogan faces a liberal, often hostile legislature that will do everything in its power to push its version of this legislation through. Hogan’s preemptive option is an attempt to establish a stake in the ground at the more sensible end of things. While this rearguard action isn’t ideal for Maryland job creators, it may be the only move preventing them from a terminal condition precipitated by Democrats.
Matthew Pugh is a member of the Republican State Central Committee. His column does not represent the collective opinion of the committee.