For every benefit there is a cost, and the question is, who pays?
There are few activities politicians love more than handing out benefits that others must pay for.
That was evident — once again — this week when Gov. J.B. Pritzker signed — and celebrated — legislation that will provide open-ended paid leave for all employees.
The legislation will become effective Jan. 1, 2024. Under it, employees of any business can earn at least 40 hours of paid leave per year — one hour of paid leave for every 40 hours worked.
That mandate will be a non-event for most employers because they already — whether voluntarily or as part of a union contract — provide an array of benefits to their employees.
Many see it as not just the right thing to do but a necessary ingredient to attracting and keeping employees. After all, it’s a competitive marketplace for workers, especially these days.
But what about those employers who are just hanging on, eking out a profit by keeping a sharp eye on costs? Not every employer is the caricatured robber baron of yore who builds a massive fortune on the backs of exploited workers.
As noted by a local labor-law expert, this mandate could have a consequence that astute observers would have anticipated.
University of Illinois labor Professor Michael LeRoy suggested the open-ended nature of the paid leave will be a burden on small employers. As a consequence, he contended that more and more of them will feel compelled to revisit the employer/employee relationship.
What that means, he said, is that employers will seek to rely on “independent contractors” rather than employees to get their jobs done. Or perhaps they may reduce their number of employees.
If costs are too high, what’s a struggling employer to do? Some might not approve of that kind of cold-blooded approach, but business owners are accustomed to making the sometimes-difficult decisions needed to stay afloat.
The governor’s bill-signing ceremony was, generally speaking, a celebration of the legislative work done to achieve a goal the participants thought laudable. But the governor couldn’t resist misrepresenting the legislative goal.
He said employers benefit “from allowing employees to tend to urgent personal matters of their lives.” It’s not clear, beyond good will, how much employers benefit from having employees not show up because they are addressing “urgent personal matters.”
But the legislation isn’t limited to “urgent personal matters” — sick time, doctor visits — it’s entirely open-ended. The paid leave, according to the law, can be used for any purpose.
This legislation is as much about mandating vacation time as it is about tending to a sick child.
There’s no doubt the legislation is the result of good intentions. Employers accommodating employees is a good thing that those who can afford it recognized long ago.
But handing what could be a big bill to a small-business owner who can’t afford it isn’t good for anyone, even those this law purports to help.