Some businesses are finding Portland's new ordinance problematic

Photo Credit: COURTESY: LISA FRACK, COMMUNICATIONS DIRECTOR OF FAMILY FORWARD - Family Forward Executive Director Andrea Paluso speaks at a press conference outside Portland City Hall immediately following the passage of the Portland Protected Sick Time ordinance on March 13, 2013. Family Forward is leading the campaign to make paid sick time required across the state.  Ten months after its implementation, advocates for Portland’s Protected Sick Time law say the local workforce is better off now that people don’t have to choose between their health and a paycheck.

However, business groups complain the law’s one-size-fits-all design doesn’t work for some industries and the administrative work required to comply is excessive.

Last year, the City of Portland passed an ordinance, guaranteeing paid sick days for eligible workers employed at businesses with six or more employees. The law went into effect in January, but enforcement was stalled while businesses scrambled to adapt.

Andrea Paluso, Executive Director of Family Forward Oregon — a nonprofit leading the statewide campaign for paid sick days — says she’s received tremendous amounts of positive feedback since the law’s adoption.

“We’ve heard a lot of stories from a lot of folks who have made it through this year with sick kids. They’ve been able to stay home without losing their jobs.”

The Bureau of Labor and Industries, contracted by the city to implement the law, has received 72 complaints related to the ordinance so far. BOLI spokesperson Charlie Burr says his bureau has also received four civil rights complaints, three of which alleged retaliation from the employer when an employee tried to cash in on paid sick days, and another that alleges an employer refused to comply with the law. Two of these claims are currently under investigation, but the vast majority of complaints resulted in warning letters to businesses.

“The most common source of wage complaints involve either failure to post information about Portland’s new law and failure to provide sick time to eligible employees,” says Burr. “In an effort to make the new law work for employees and employers, our agency instituted an easing in period to give businesses an opportunity to address unintentional errors as they get up to speed on the law.”

Portland Business Alliance spokesperson Liza Dossick says her organization also helped area businesses understand what’s expected. The alliance came out in opposition of the ordinance, saying it would cause adverse effects to small businesses. Now, she says, they are seeing those effects come to fruition.

“With the companies that are on the threshold of six employees; they aren’t hiring more people because it’s been really burdensome to comply with the ordinance, even though they have policies that exceed the required amount sick leave,” she says. “There’s a huge administrative component to it.”

Bill Perry, Vice President of Government Affairs at Oregon Restaurant and Lodging Association agrees the administrative requirements are excessive.

“I think when you look at a lot of the smaller operators, they’re probably not complying with the law from the reporting standpoint,” he says. “The way Amanda Fritz wants it, I’ve got to record everything. Even if it’s capped out at 40 hours, I have to keep recording,” he says. “I’d be surprised if there were many independent operators that had that capability. They require you to keep track of hours that nobody is ever going to use.”

Another issue, Perry says, is that restaurant industry employees commonly trade shifts when they aren’t feeling well because otherwise, even under the new law, they lose their tip income when they call in sick. So they trade shifts while their employer is recording accrued sick time on the books. “Generally,” he says, “they end up switching their vacation time into PTO.”

Perry says the ordinance incurs double labor costs to his industry as well. When a restaurant employee calls in sick, another employee has to work that shift, so essentially two people are paid to do the job of one. It’s not like in an office where a desk is vacant for the day. “Your retail businesses get hit a lot harder than your professional services,” says Perry. “When you look at these low-margin businesses, that’s a big problem. That’s why shift trading is so important, it basically helps the employer and the employee.”

Under the ordinance, shift trading for sick time is only allowed if done in the same or next pay period, which Perry says is also problematic because many businesses are on weekly pay periods. In order to trade one big-tip shift for another, employees end up trading outside of the allowed time period and could later point to their employer as a lawbreaker if they become disgruntled.

“It’s important we get these policies right,” says AFL-CIO spokesperson Elana Guiney. “We need to make sure that people who oppose the law, that their concerns are addressed so we aren’t rolling back a law that helps workers,” she says. “It’s done a lot of good. A lot of workers in our city now have the ability to take time off without losing their jobs or taking food off their tables.”

Paluso says Sen. Elizabeth Steiner Hayward (D-Beaverton) and Rep. Jessica Vega Pederson (D-Portland) will introduce a statewide bill in 2015. Two paid sick leave bills introduced into Oregon legislature last year didn’t get past phase one, but with Portland now on board, Paluso is optimistic.

Perry, however, doesn’t think new legislation will pass unless some compromises are made.

“They can have a sound bite that everybody should deserves to get sick leave that sounds good to the public, but there are practical applications. It doesn’t work that way,” he says. “It’s a one-size-fits-all law, and I think legislators see that,” he says.

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