Some small businesses may not be able to afford the new paid sick leave policy
President Obama signed an executive order on Labor Day that requires federal contractors to provide up to seven days of paid sick leave a year to nearly 300,000 workers.
Small business advocates say this executive order, which is set to take effect for federal contracts signed in 2017, favors organized labor. The White House estimates that 40 percent of private sector workers don’t have access to paid sick leave. And during the signing of the executive order, President Obama urged Congress to pass legislation that would create similar medical leave programs for those private sector workers, according to The Wall Street Journal.
If this action expands into a mandate affecting the private sector, it’s poised to negatively impact small businesses that may not be able to afford to provide the benefit.
“Mandatory paid leave is a great benefit for workers whose employers offer it,” National Federation of Independent Business (NFIB) Media Director Jack Mozloom said in a statement. “For workers whose employers can’t absorb the cost, it’s an arbitrary expense that will ultimately result in shorter hours, lower pay or disappearing jobs.”
The executive order guarantees both full- and part-time federal contract workers an hour of paid sick leave for every 30 hours worked, which totals to seven days a year. The president claims this action will not increase business costs. The paid sick leave order includes “leave to care for themselves, a member of their family, a domestic partner or another loved one, or they could take the leave to recover from domestic violence, sexual assault or stalking,” according to The New York Times.
The move is also the latest in a series of labor-related decisions from the Obama Administration. This summer, the Labor Department announced a new rule that would make more workers eligible for overtime pay. Other executive actions have included raising the minimum wage for federal contract workers and imposing more barriers to federal contractors that violate labor laws, according to The Wall Street Journal.