Once again, the Austin City Council is overreaching on an issue that was never intended to be governed at the municipal level. And, once again, Austin businesses will pay the price if they choose to keep their businesses here.
When the City Council decided to require Austin businesses to provide paid sick leave to all employees, it also further decided that Austin isn’t a place where businesses can be competitive on a regional, state or national level. No one will tell you that taking care of your employees is a bad idea; what is a bad idea is mandating issues like paid sick leave at the municipal level. Fourteen states — including neighboring Oklahoma and Louisiana — agree and have enacted statewide bans on similar local-level mandates. Why? Because they just don’t work.
Try to find a legitimate study that favors locally enforced paid sick leave. They don’t exist. Among cities with similar mandates, San Francisco employers report being forced to pass along the cost by reducing benefits and labor hours and still experienced a significant decline in profit — by 12 to 23 percent. Most Seattle-based employers saw no measurable increase in areas like employee morale or predictability of employee absenteeism — areas the City Council cites as important reasons for the initiative. In fact, among five studies examining the effect of mandatory paid sick leave laws in cities nationwide, four found no reduction in the frequency of employees coming to work sick.
The Austin Technology Council has spoken out against the mandate, asserting that “tech and innovation companies and all businesses need to have flexible workplace policies that meet the needs of both employers and employees. A one-size-fits-all government-mandated sick leave policy does not work for most tech companies, and will inhibit [their] ability to create an environment and PTO policy that works best for [their businesses].”
I agree wholeheartedly. I’m a business owner with over 300 employees in the Austin area. I’ve estimated the City Council’s mandate will cost my company about $5,000 a week — just to meet a rigid policy that will not be in the best interest of most of my employees.
Step outside Austin’s city limits into Round Rock, San Marcos and other fast-growing cities, and there is no such penalty for doing business. What would stop business owners from moving and starting businesses nearby just to gain that competitive advantage? What if those employees wishing they had an extra week’s worth of pay — or more — each year for time off find themselves without a job at all?
The City Council began its public forums intent on enacting a mandate without first hearing from the businesses it will deeply affect. They’ve instead jumped ahead, asking the public to help decide how it will be implemented. I’ll tell you now: There is no solution at the city level that is healthy for employees and businesses. The issue of paid sick leave does not belong in the hands of the City Council — period. Please join me in visiting the city’s Speakup Austin website to provide feedback against the proposal — and call your City Council representative to have your voice heard.
Turpin is founder and CEO of the HT Group, a consulting firm.