President Obama will call on Congress to pass the Healthy Families Act, requiring every company in the country to offer employees the ability to earn up to seven days of paid sick time a year.
While many companies already offer paid sick time to their employees, the passage of the this legislation would make it a national law that would require every worker a right to it.
Obama’s legislative proposal is modeled on a bill by Rep. Rosa DeLauro (D-Connecticut), and Sen. Patty Murray (D-Washington), wherein companies with more than 15 employees would be required to have paid sick leave, and for every 30 hours of work an employee will earn 1 hour of paid sick time, up to 56 hours a year, reports USA Today.
Sen. DeLauro applauded Obama’s proposal.
"Workplaces need to respond to the reality of family life in the 21st century, and allowing employees to have seven sick days a year is a bare minimum," DeLauro said. "The fact that the United States is one of just a handful of countries that does not require paid family or sick leave is nothing short of shameful."
Obama also plans to grant via executive action six weeks of paid leave to federal employees after the birth or adoption of a child.
In an effort to bring similar programs to states and cities, Obama wants Congress to spend $2.2 billion to help them develop programs.
The announcement of Obama’s desire for Congress to pass the Healthy Families Act was announced in a LinkedIn post made by Valerie Jarrett, Senior Advisor to Obama and Chair of the White House Council on Women and Girls.
“We know that today, 43 million private sector workers in the U.S. are without any form of paid sick leave. Only three states — California, New Jersey, and Rhode Island — offer paid family and medical leave,” Jarrett wrote. “The United States remains the only developed country in the world that does not offer paid maternity leave.
“The truth is, the success and productivity of our workers is inextricably tied to their ability to care for their families and maintain a stable life at home. More and more employers are coming to understand this. And voters get it too—from Massachusetts to Oakland, they have been showing their overwhelming bipartisan support for policies allowing workers to earn paid sick days.”
Jarrett claims workplaces have not “kept pace” with the changing American family, which finds parents working in more than 60 percent of households, and 63 percent of women with children under the age of 5 as part of the labor force.
Tim Worstall, a Forbes Contributor on economics, finance, and public policy, believes one thing needs to be considered under such a policy: a decrease in wages may occur.
“It’s going to cut wages. And given the amount of whining and moaning we’ve had recently about stagnating wages it’s important that we point this out,” Worstall said.
Worstall’s argument is founded on the idea that with a new part of a compensation package being required by employers to offer, the cost of such is passed on to the employee through lower wages.
“To an employer hiring someone has a cost. The closest approximation to that we have in the economic statistics is "total labour compensation." That’s the wages they get paid, of course, but also all of the benefits that go with the job. Paid maternity leave, paid sick leave, pension contributions, health care insurance, taxes paid on employing someone (for example, the employer contribution to FICA taxation) and so on. We have to add all of these together to get what is the total cost to an employer of having an employee,” Worstall wrote.
“The importance of all of this is that the most flexible part of that total compensation package is future wage rises … But of that total compensation package the one that is most amenable to being reduced is those future wage rises. And that means that if, by law, we increase the cost of the total package (by, for example, legislating paid sick leave) then we can expect those future wage rises to be lower than they would otherwise be,” Worstall wrote.
Whether Worstall is correct in his economic analysis will only be seen if the Healthy Families Act is enacted.
For Jarrett, this change in legislation will make the United States actually stand behind what it claims when it comes to family values.
“…We can't say we stand for family values when so many women in this country have to jeopardize their financial security just to take a few weeks off of work after giving birth,” Jarrett wrote.
“We can't say we're for middle-class stability when a man has to sacrifice his economic security to care for his ailing mother," Jarrett wrote.
Obama plans to make the proposal during a roundtable with working women on Thursday, January 15.