Employers and employees will testify today regarding a controversial bill that would require employers in Hawaii to offer paid sick leave to employees.
House Bill 1727 would require employers to provide a certain amount of paid sick leave to their employees each year unless they pay employees more than the minimum wage.
According to the text of the bill, an estimated 43 percent of private-sector workers in the state lack paid sick leave. At the same time, nearly 250,000 state residents are caregivers for family members and are unable to adequately provide care and be employed full-time without paid sick leave.
The bill would require employers with more than 50 employees to allow workers to accrue one hour of paid sick leave for every 40 hours of work, with a limit of 40 hours of sick leave obtainable per calendar year. Only workers who work more than 680 hours per year would be eligible, and they would only be able to spend the accrued hours after their 750th hour of work after employment.
Employers would be exempt from this requirement only by employing fewer than 50 employees or by paying employees more than the minimum wage. The threshold for the latter exception increases with time, however: Beginning in 2019, employers would be exempt if they paid employees $1.65 more than the minimum hourly wage; in 2020, however, that threshold would rise to $3.15 more than the minimum wage, and again in 2021 to $4.90 more.
The bill, which passed the House and is moving through Senate committees, has proven contentious among businesses.
“It’s just a ploy to increase minimum wage,” said Gordon Takaki, president-elect of the Hawaii Island Chamber of Commerce.
Takaki pointed out that the 2021 requirement to pay employees $4.90 more than the minimum wage would effectively require businesses to pay employees $15 an hour — a benchmark minimum wage increase advocates proposed as an ideal new minimum wage — to be exempt from the sick leave requirements.
Takaki said he would expect some small businesses to choose not to hire additional staff so as to not exceed the 50-employee threshold. He also expressed confusion about whether the 40 hours of paid leave accrued in a year could accumulate year after year — the bill currently is not clear.
“From a business perspective, it’s not a good bill,” Takaki said.
Takaki, along with dozens of business owners and trade associations, testified in opposition to the bill during several previous committee hearings.
“This is another mandated benefit that will increase the cost to employers and could stifle job growth,” Takaki wrote in his testimony. “As many national rankings have shown, the cost of opening and running a business is extremely high in Hawaii. With every additional workplace mandate, the competitive distance is increased which, in turn, affects the ability of employers to sustain and create jobs, as well as provide benefits to employees.”
Other organizations agreed with Takaki, with the Hawaii Food Industry Association stating that the bill would “place a huge administrative burden on employers, which is also a financial drain that they would have to make up for in other areas,” while Hawaii Petroleum warned the burden of the increased business costs would eventually fall upon the consumer in the form of increased prices.
Another trade association, however, supported the bill.
The American Council of Engineering Companies of Hawaii testified in support, stating “it would provide paid sick leave benefits to those who need it most, i.e. minimum wage workers, without significantly increasing employers’ administrative effort and costs.”
Other statements of support were proffered by labor unions, with the Hawaii State Teachers Association, International Brotherhood of Electrical Workers, International Longshore and Warehouse Union and others all recommending the bill’s passage to improve working and living conditions for minimum wage workers.
“While (our) members are fortunate enough to be covered by a collective bargaining agreement providing in many cases generous amounts of paid sick leave, many of Hawaii’s workers, over forty percent, are not afforded the same benefit,” wrote Michael Brittain of the International Brotherhood of Electrical Workers. “As a result, these workers are required to choose between providing for their families or working while sick and enduring a loss of income to recuperate.”
The American Federation of Labor and Congress of Industrial Organizations wrote that supporting the bill “will provide workers who need it the most with a few paid sick days a year. Children who are sick will finally be able to stay at home and recover and sick employees will finally have the opportunity to regain their health allowing them to return to work at full productivity.”
Another hearing about the bill will take place today before the Senate Committee on Labor. A hearing before the Senate Ways and Means Committee has yet to be scheduled.
Email Michael Brestovansky at mbrestovansky@hawaiitribune-herald.com