Mandatory Sick Time Law Will Be a Mess

by Rob Roper

Last session the legislature passed Act 69, mandating that Vermont employers provide employees with paid sick leave. The law takes effect for employers with five or fewer employees in January 2018. The legislature conducted a survey of small businesses on this topic, and of the responses were enlightening.

55% are unfamiliar with the law and don’t understand it. Only 11% say they understand it very well. This is gong to be a nightmare of implementation. Of those that do have knowledge of the law, overwhelming they learned about it through the press, not a state agency, so one has to wonder how detailed and accurate their understanding is.

23% of survey respondents already have formal sick leave policies in place, 39.6% have informal policies, and 37% do not offer any paid sick leave. However, of the businesses that do formally or informally offer paid sick leave, 33.5% don’t track it at all and another third of respondents do not adequately track it for purposes of Act 69 compliance.

The report accounts for three categories of costs associated with adding sick time requirements to small businesses

  • Paying workers for time taken as earned sick leave
  • Operational costs to replace workers when they are absent during illness
  • Administrative Costs to comply with the requirement.

To that last point, “Software packages exists for small business that cost between $100 and $1000 per year. The use of these packages will also require some upfront cost for training….”

To deal with these additional costs, the survey notes that businesses “will use a mix of resources to cover their additional costs. Lowering future wage increases or other employer provided benefits, reducing hours, reducing business profits and increasing prices….” That calls into question any benefit to employees as a result of Act 69.

But what the survey report doesn’t account for is the expected fines that will inevitably result from lack of compliance due to lack of understanding, complexity, and expense. Act 69 sets a fine of up to $5000 for violating the law – a law that very few know about and are unequipped to comply with. This is not a good situation.

– Rob Roper is president of the Ethan Allen Institute. 

{ 3 comments… read them below or add one }

H. Brooke Paige February 2, 2017 at 6:40 pm

“Ignorance of the Law is no excuse” unless you are a Vermont Legislator !

Reply

Gregory Houghton February 3, 2017 at 2:22 am

IMHO one way to keep the cost of sick time down would be 1) let employees carry over sick time not used to the next year. Most employers make the mistake of making sick time use or loose. No one is going to voluntarily loose their sick time.

Reply

Bill Adamson February 4, 2017 at 10:09 pm

I don’t want a reward for calling in. It’s one more perverse incentive at the end of a long list of them.

Reply

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