Professional Documents
Culture Documents
DR. ALICE LOUISE KASSENS JOHN S. SHANNON CHAIR OF ECONOMICS ROANOKE COLLEGE
Session outline
Sick days and the workplace
Purpose, structure of plans Pros and cons Evidence and current research Status of state, city mandate
Individual mandate
Details , updates
Sick days
Several studies around 2004 brought the issue of paid sick days into the national spotlight
49% of all workers were not able to take paid sick leave for themselves or to care for a sick family member (Lovell 2004) 54% of all workers cannot take leave to take care of a sick child without losing pay or vacation time (Galinsky, Bond, and Hill 2004) 83% of workers go to work when sick; 21% of whom do so explicitly to save their sick days to stay home when their children are sick (ComPsych Corporation 2007) High wage workers are twice as likely as low wage workers to be able to take time off without penalty to care for sick children (ComPsych Corporation 2007)
To address lack of paid sick leave, several localities have taken upon paid sick leave laws (San Francisco one of the first in 2006)
Sick days
A variety of structures for sick days
State mandated Paid vs. unpaid Accumulate vs. use it or lose it Full time vs. part time workers Size of business (# employees) Number of days allowed Time commitment prior usage of accumulated days Ratio of hours worked to hours earned Maximum number of hours earned Type(s) of illness covered
GROUP CHAT
Get into small groups and discuss the sick day structure at your place of work.
Do you have sick days? Are the paid? Can you bank days?
Sick days
GROUP CHAT Assume that you are the owner of a business and you are considering adopting a paid sick day policy. 1) Working alone, make a list of pros and cons of adopting such a policy (including incentives/disincentives created) 2) Team up with two other classmates (assume they are co-owners of the business) and share/discuss your lists 3) As a group produce a finalized list that all members agree upon. We will share the finalized lists with the class.
Employers initially concerned about cost and potential abuse of program; viewed it as anti-business
After enactment, in most cases = modest impact, no impact on business operations
Due partially to many carve outs of law; also many businesses covered already offered sick day plan
No indication that has been a job killer (employment grew in covered sectors and actually fell in exempt sectors)
Average number of paid sick days rose modestly over same time period from 6.9 to 7.7 days
Large differences across industries by change in proportion of employees with access to paid sick days
Greatest change in health, education, and social services; retail; hospitality industries Greater change when union not present
5 minute break
Impact on locality will depend upon makeup of labor market, industry mix
Impact on employees will depend upon prior coverage, labor market status, industry
Appellbaum et al. 2014, pg. 14
Sick days
GROUP CHAT - Revisited
Would you change anything on your list?
Assume that you are the owner of a business and you are considering adopting a paid sick day policy. 1) Working alone, make a list of pros and cons of adopting such a policy (including incentives/disincentives created) 2) Team up with two other classmates (assume they are co-owners of the business) and share/discuss your lists 3) As a group produce a finalized list that all members agree upon. We will share the finalized lists with the class.
Based upon your lists, would you implement a PSD policy at your business?
Size of business
15 or more none none none none 20 or more 10 or more < 10 10 or more 6-10 <6 10 or more < 10
PST/work ratio
1/40 1/30 1/30 1/30 5.5/40 1/40 1/30 1 (unpaid)/30 1/30 1/30 1 (unpaid)/30 1/30 1/30
Maximum/year
none 72 hrs/yr none 9 hrs/yr 144 hrs/yr 2 days/yr 56 hrs/yr 56 hrs/yr 56 hrs/yr 40 hrs/yr 40 hrs/yr 72 hrs/yr 40 hrs/yr
Michigan
Size of business
none 10 or more < 10 10 or more < 10 10 or more 6 - 10 <6 5 or more
PST/work ratio
1/30 1/30 1/30 1/20 1/20 1/40 1/40 1 (unpaid)/40 1/30
Maximum/year
40 hrs/yr 72 hrs/yr 40 hrs/yr 80 hrs/yr 40 hrs/yr 56 hrs/yr 40 hrs/yr 40 hrs/yr 56 hrs/yr
Vermont
Washington
What are the potential differing experiences by employees in the two states? What are the potential differing experiences by businesses in the two states? What are the potential differing labor market outcomes for workers in the two states? What additional information would you like to know to fully address these questions?
5 minute break
Employer Mandate
DIFFERENCES BETWEEN SMALL AND LARGE EMPLOYERS
Pay or play mandate If less than 50 FTE, not penalized if do not offer
This is a delay in the employer mandate; employers with 100 or more workers begin January 1, 2015
Affordability
Employers must insure their employees if they have over 50 full time workers or they will face a penalty or "shared responsibility fee".
Penalties
The penalty for small businesses not covering their workers is $2000 per employee and $3000 if they purchase health insurance through the exchange with premium credits The first 30 workers are excluded from the penalty. High end insurance plans will be subject to a 40% excise tax.
Employers with less than 25 full-time workers making less than $50,000 a year may be eligible for cost assistance via premium tax credits.
Although firm size determined by FTE, penalty is only assessed on full-time workers (30+ hours per week)
2015 2016
3. Work with insurance company/broker to buy group coverage in private market (nothing new)
If offer through SHOP, must offer to all FT employees (~30 or more hours per week)
In many states, at least 70% of your eligible employees must enroll in your SHOP plan Employees sign up using the SHOP webpage after you have selected a plan
Coverage will not take affect until approved by employer after enrollment period is over
$1,000.00
$800.00
$600.00
$400.00
$200.00
$0.00 Adult Individual Adult Individual Age 27 Age 50 Average Family Median Single Parent Family Min Max Couple Child
How much time/money will be spent learning the system? If choose to offer and use tax credit, will the benefit be affordable after credit expires?
Individual Mandate
DIRECT AND INDIRECT EFFECTS ON SMALL BUSINESSES
Individual mandate
Beginning in 2014, all individuals must by health insurance with essential benefits (minimum essential coverage) Self-employed individuals can get health insurance through the state exchanges just as any other individual If do not buy health insurance, face a penalty (unless have an exemption) Penalty is the greater of:
$95 or 1% of household income over the filing threshold in 2014 $325 or 2% of household income over the filing threshold in 2015 $695 or 2.5% of household income over the filing threshold in 2016
Exchange for a single person under the age of 49 making $40,000 offers coverage ranging from $120.10/month to $1720.90/month (50 options, Roanoke)
All include coverage for doctor visits, Rx, hospital, maternity/newborn care, preventative care Qualify for some aid (cut off $45,960) although Kaiser calculator says that I will pay more and not qualify for a subsidy Pay $300 in penalty or at least $1,441.20 per year in premiums (risk of penalty is low since cannot be denied coverage if get sick)
Feel free to contact me Dr. Alice Louise Kassens kassens@roanoke.edu (540) 375-2428 (office) @RnningEconomist
Thank you