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Effects of Mandatory Paid Leave Extend Beyond Seattle

(YOUR HELP NEEDED NOW! The Seattle City Council’s Housing Human Services Health and Culture Committee is scheduled to vote on August 10. AGC members are urged to contact the members of this committee: Nick Lacata Sally Clark Tom Rasmussen Sally Bagshaw.)

The Seattle City Council is considering legislation requiring employers to provide paid sick leave to employees. AGC opposes the legislation outright and proposes that contractors be excluded from its provisions should it be enacted.

The ordinance would apply to all Seattle employers and employers outside the city that perform 80 hours or more of work in the city. Depending upon the size of the employer the proposal requires five seven or nine days of paid sick leave for all employees. The complete text of the draft bill can be viewed at CB 117216.

In his letter on behalf of AGC to Seattle Councilmembers AGC’s Seattle District Manager raised the following concerns about the proposal:

Forces Changes in Industry Standard Practices

The construction industry is perhaps unique in that paid time off for sick days has never been part of the compensation package for hourly workers. Because of the cyclical and intermittent nature of the work pay has always been for time worked. For this reason compensation packages have focused on the hourly rate health and retirement benefits. This proposal turns upside down the long established practices of the industry regarding worker compensation and is an unwelcomed government intrusion into an area that has been successfully negotiated by management and labor for years.

The Proposed Ordinance is Prejudicial to the Collective Bargaining Process

AGC of Washington negotiates agreements with the carpenters laborers operators teamsters and cement masons. For the reasons stated above paid time off for sick leave has never been part of these agreements and isnot an issue that has been brought to the table by craft workers.

Section 14.16.130 of the proposed bill requires collective bargaining agreements to waive sick leave requirements in “clear and unambiguous terms.” Since sick leave has never been in our agreements with labor a government-mandated requirement to explicitly exclude sick leave from these agreements creates a new bargaining issue. It is not the proper purview of the City to insert itself into the long-established contractor employer-employee negotiations of benefits.

The Proposed Ordinance Will Substantially Increase Costs for all Contractors

Construction work by its nature is performed at multiple sites and multiple jurisdictions. And construction workers often work at more than one site and in some cases for multiple employers. Mandating paid sick leave for employee hours worked in Seattle will require contractors to put in place new accounting procedures to track their time.

Further some contractors who currently have Paid Time Off (PTO) policies for management and home office employees that don’t meet the minimum requirements will have to change their current leave policies. For companies with multiple office locations throughout the country the mandate would also create inequities in their HR policies that would need to be resolevd.

The proposed legislation punishes theses responsible employers who are already providing paid leave benefits by forcing costly changes in their current practices. The ordinance would be particularly devastating to open shop contractors where the majority of the women and minority firms are located and which tuyplically have minimal benefit packages.

A 2010 Ernst and Young study on the “Impact of Paid Sick Leave on NYC Businesses” showed that such a law could increase payroll costs for many construction companies by nearly 2%. This is on the back of an industry that is still experiencing nearly 25% unemployment.

For these reasons construction contractors should be excluded from the proposed legislation.

AGC members are strongly encouraged to contact City Council members; they can easily do so through the Council website. For more information contact Jerry Dinndorf 206-284-0061.

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