Hogan offers Md. paid sick leave proposal

ANNAPOLIS — Employees of businesses with 50 or more workers could be eligible for paid sick leave under a proposal announced Wednesday by Gov. Larry Hogan.

Hogan, who has previously not taken a position on the issue since taking office in 2015, said legislative inaction on the issue and concerns for the business community necessitated him attempting to take the reins on the issue.

“Employees without this benefit are sometimes faced with hard choices about their health and welfare — like whether to risk showing up sick or not receiving a paycheck ,” Hogan said. “And while all of us could probably agree that more people could benefit from having sick leave, it would be irresponsible to put another law on the books that unfairly penalizes our state’s job creators, shuts down small businesses and costs us more jobs.”

As part of his proposal, Hogan said, businesses with 50 or more employees would be required to offer 40 hours of paid sick leave to workers. Those same employees would be eligible to carry a maximum of 40 hours of leave over each calendar year.

Businesses with less than 50 employees could be eligible for tax breaks as incentives to offer leave.

Hogan said his bill would include the following provisions:

• Mandatory paid sick leave for employees at companies of 50 or more workers. Those workers would be eligible, provided they work a minimum of 30 hours per week.
• Leave would be capped at a maximum of 40 hours per year with 40 hours of unused leave allowed to be carried over into the next year.
• Companies that already offer at least the minimum leave would not have to change their existing policies.
• Companies with negotiated union contracts would also be exempt.
• The measure would pre-empt all local paid sick leave laws. Currently only Montgomery County has such legislation in place. Hogan said is bill, should it become law, would nullify the Montgomery County law.
• Seasonal workers who work less than 120 days would not be eligible for mandatory sick leave.

Hogan said the 50-employee minimum is based on existing federal law.

“Our goal is to supply sick leave to employees who need it, not to dictate or interfere with the policies of small businesses,” Hogan said. “This proposal would finally institute a fair and flexible statewide policy that would apply to all 24 Maryland jurisdictions.”

Full details of the bill were not immediately available. The bill is expected to be part of Hogan’s legislative package that will be introduced when the General Assembly returns in January.

It will likely compete with legislative proposals on the issue that have been discussed for more than three years.

Hogan said he briefed a bipartisan group of legislators and found strong support for his proposal.

Democrats cautious

But Democrats in the House and Senate said they received only bullet-point briefings minutes before the announcement. Some described the bill as watered down, and others said it had little chance of being the bill that will ultimately pass.

And while Hogan said his involvement was necessitated by legislative inaction, Del. Luke Clippinger, D-Baltimore City and sponsor of paid sick leave legislation in the House, said the bill discussed over the last five years has gone through a typical legislative process and is not the result of inaction.

“We have made a lot of good progress,” Clippinger said. “I wish (Hogan) would have gotten on board sooner.”

Clippinger declined to comment on the specifics of Hogan’s announcement, saying he had not been briefed beyond bullet points and would wait to see a full bill in January.

“I would say I like what we have now, but I’ve learned we don’t rule anything out when you go into the legislative process,” Clippinger said, adding that “it would be impolite” to give Hogan’s proposal anything less than a full and fair review.

Clippinger’s bill will be House Bill 1 in the coming session, a designation signaling the importance placed on it by leaders, including House Speaker Michael E. Busch.

Other legislative reactions

Alexandra Hughes, Busch’s chief of staff, said the speaker was not fully aware of all the details of the bill and was contacted about 30 minutes before Hogan made the announcement.

Hughes described the briefing as “very general, broad brush details.”

“It’s been a priority of the Speaker for years and we’re glad to see the governor is on board with the Speaker,” Hughes said. She added that that Hogan’s characterization of strong support for his proposal was optimistic.

“There’s a significant concern that the majority of Marylanders work for small businesses and based on our current understanding of what the governor is proposing, there would be a significant number of Marylanders who wouldn’t have access to this law,” Hughes said.

Michael O’Halloran, state director of the National Federation of Independent Business, said the paid sick leave mandate is alarming to small-business owners. Hogan’s proposal, he said, could ease some of that discomfort.

“It is incumbent upon lawmakers considering mandatory paid leave in any form to understand that increasing regulations and mandates on employers will result in fewer jobs in Maryland. Additionally, our members feel strongly that offering paid leave to entice employees is a decision that should be left up to individual businesses, not legislated,” O’Halloran said. “Tax relief for job creators often paying taxes as pass-through entities is certainly something that we support, but we hope such relief will stand on its own merit without the need to pass a mandate onto businesses.”

Sen. Thomas M. “Mac” Middleton, D-Charles and chair of the Senate Finance Committee, is expected to sponsor a Senate version of the bill in 2017. That legislation will be based on the bill passed by the House late in the 2016 session with some tweaks.

Middleton said Hogan’s bill doesn’t go far enough, and he raised concerns that the announcement was a political ploy meant to kill paid sick leave in Maryland.

“I hope the governor is serious about it,” said Middleton, who has been meeting with businesses and sick leave advocates over the summer and has more meetings next week. “If his end game is to put in a bill that advocates won’t accept and the business community won’t accept anything else but his bill, he’s essentially killed the bill. If that’s his end game, that’s a pretty good strategy. I sincerely hope his intent is honorable here and he wants a meaningful bill.”

But provisions such as limiting mandatory sick leave to companies of 50 or more is a nonstarter, he said. Increasing the size of affected businesses from 3 to 15 last year eliminated a large number of employees who could have been covered.

Middleton also expressed concerns about incentives for businesses under 50 employees who could be eligible for tax breaks for benefits they already provide.

“A bill like that is a hell of a gift to businesses at Christmas time,” Middleton said. “For employees who don’t get paid sick leave coverage, their gift is a sack of coal.”