The majority of America’s labor laws were written eighty years ago, for a different time and a different workforce. Today we have an opportunity to re-imagine the workplace rules, tailoring them to the composition of the current workforce and with strong guesses as to what tomorrow holds. States, counties, and cities are doing just that, passing paid family and medical leave (paid leave) and paid sick days laws (also known as earned sick days) that place value on kinds of caregiving that have not historically been included in our labor laws. What are they doing right, and how can future policy build on those strengths in terms of coverage, inclusivity, and accessibility?
To date, six states and Washington, D.C. have passed paid leave laws, and eleven states, thirty-two cities, three counties, and D.C have passed earned sick days laws. Notably, these laws include many self-employed, temporary, seasonal, part-time, and domestic workers. While not every new law is as inclusive as it could be, the majority are. These family-forward laws are a great opportunity to test how to be as inclusive as possible while also serving as a model for other labor laws.
Drawing lessons from these excellent forerunners, as well as from a series of reports, Constructing 21st Century Rights for a Changing Workforce, written by the team at A Better Balance, that digs deep into these issues, here are the top ten ways to establish policies that respond to the needs of all members of the twenty-first-century workforce:
1. Cover all employees.
Policymakers should not exclude nonstandard employees in their definitions of covered employees. They should ensure that new definitions of covered employers and employees, as well as the definitions in existing laws, are comprehensive.
For example, when referencing the definitions of covered employees in state minimum wage laws, policymakers should ensure that the minimum wage laws don’t have exclusions that would leave out domestic workers, farm workers, or others from their new laws. In cases where the existing definitions have exclusions, new laws should adopt definitions that remove those exclusions or replace them with new, more inclusive definitions. The state paid leave laws and state and local earned sick days laws to date primarily use broad definitions. These are good models for other social insurance programs and workplace standards for ensuring that most people working in private sector nonstandard jobs are covered. (See below for a discussion of how to cover self-employed people, who are not included in these definitions.)
All workers deserve the right to care for themselves and their families, and excluding people because of their sector, the size of their employer, or job type goes against that basic principle.
Some legislative debates for paid family and medical leave and earned sick days have discussed carving out certain businesses based on their size, sector, or the types of workers they employ. This would be a poor policy choice. All workers deserve the right to care for themselves and their families, and excluding people because of their sector, the size of their employer, or job type goes against that basic principle. Inclusivity is good economic policy as well, given that the more people who contribute to the paid family and medical leave fund, the more stable the fund will be. In addition, people often work for multiple employers of different sizes in different sectors—often part-time. Uniformity simplifies their ability to fairly receive paid leave and earned sick days. All of the paid leave laws adopted to date include private sector employees regardless of the size of their employer (or their sector). Most earned sick days laws in effect have no or few carve outs.
2. Include self-employed people.
Since none of the paid leave or earned sick days laws include independent contractors in their definitions of employees, the laws must cover them another way. This is easier to do through social insurance programs than through workplace standards. For example, the FAMILY Act—the federal paid family and medical leave bill introduced by Senator Kirsten Gillibrand (D-NY) and Representative Rosa DeLauro (D-CT)—automatically includes self-employed workers, building on the model of Social Security, which also automatically includes them. Universal coverage contributes to the sustainability of the program, as social insurance programs rely on sharing risk and cost across a large and diverse population. So, while universal coverage is often the right thing to do, policymakers need to consider how to set up a payment structure that is fair for self-employed people.
The FAMILY Act and Social Security program rely on employer and employee contributions, and ask self-employed people to pay both contributions. This can be overly burdensome for self-employed people. In addition, to date, five programs (those in California, New York, Washington State, the District of Columbia, Massachusetts), instead of automatic coverage, allow self-employed people to opt in, or voluntarily participate. This is preferable to not extending them coverage at all, but also must be done thoughtfully.
For voluntary programs like these, additional safeguards should be put in place to ensure fairness for workers regardless of their classification, as well as ensuring the stability of the social insurance fund. For example, having employees pay both employer and employee shares is a disincentive to participate in voluntary paid leave programs—as well as unfair to those who are misclassified. In Washington, self-employed people only pay the employee portion. This is an important option to consider: having the state absorb a portion of the self-employed contribution. Alternatively, policymakers can treat the people who hire self-employed/independent contractors as employers for the purposes of contributions, as Massachusetts is doing for certain hiring entities. These models, and variations of them, could create greater equity for all contractors—and especially those who have been misclassified—in social insurance programs.
Earned sick days laws generally exclude self-employed people and independent contractors. There are a number of innovative approaches to providing earned sick days that have not yet been tested by any state or locality. For example, employers who rely on independent contractors could be required to pay into a fund to cover paid sick time that contractors could access when they need it. The portable benefits bill in Washington State, HB2812, may be a model for this. Another model is the Black Car Fund in New York State, which provides workers’ compensation benefits to independent contractors who drive for hire by treating independent contractors as “employees” for the specific purpose of the benefit. The National Domestic Workers Alliance’s Alia program is another innovative model. Alia is a voluntary fund that employers of domestic workers choose to pay into. Domestic workers can then access paid sick time and other benefits through the fund. Multiple employers can pay into the fund for the same domestic workers, making it an especially good model for people who rely on income from more than one job. These are great examples to build from and innovate on.
3. Be thoughtful about the impact of waiting periods and eligibility requirements.
Ensuring that people working in nonstandard arrangements are not only defined as eligible but are actually able to access their benefits or rights is another key consideration for policymakers. Temporary or seasonal work, multiple sources of income, and part-time work can all impact whether someone qualifies for benefits or are protected under labor standards, depending on how the laws are written. For paid family and medical leave, eligibility generally relies on either a minimum amount of earnings or a minimum amount of time spent working, or a combination of the two. For example, California’s is the most straightforward minimum earnings requirement: workers must earn at least $300 from qualifying employment during the base period. This requirement is generally easy to meet for nonstandard workers, who can count earnings from multiple jobs over the base period toward their eligibility.
Ensuring that people working in nonstandard arrangements are not only defined as eligible but are actually able to access their benefits or rights is another key consideration for policymakers.
In terms of eligibility for sick days, all of the laws that have passed to date allow workers to begin to accrue paid sick time from their first day on the job, but the majority also mandate a waiting period of ninety days or more before people can start using their sick time. Waiting periods hurt people with temporary jobs, those who change jobs frequently, those who are often let go and rehired (as often happens in retail jobs), and those whose employers change even when their jobs do not (ie. when one employer subcontracts a position or buys a company but retains the employees). The most inclusive laws have the most limited waiting periods and allow employees to count hours worked before being let go or company ownership being changed if they’ve been rehired or retained.
4. Build systems that work for workers with multiple sources of income.
As noted, nonstandard employees often need to combine income and employment tenures at multiple jobs to meet eligibility requirements for paid family and medical leave. Eligibility standards that promote this kind of portability of benefits are especially important to temporary and seasonal workers whose jobs may change often. By allowing people to combine income and employment duration at multiple jobs with multiple hiring entities, paid leave programs can be portable from job to job and also more fair for people who have both W-2 and 1099 income. Portability should also extend to periods of unemployment.
For earned sick days, multiple sources of income can create challenges. For example, house cleaners who work for multiple employers may have trouble accruing sick time even when they are eligible for it. In addition to decreasing waiting periods, creative solutions like those considered for self-employed people may be needed to resolve this challenge.
5: Engage in comprehensive outreach and education.
Paid leave and earned sick days programs must invest resources in outreach and education so that workers and employers know their rights and responsibilities. It’s especially important to take into account the difficulty of reaching self-employed individuals who have multiple sources of income, no human resources office, and generally work on their own. Once they know they are eligible, they also need user-friendly processes to apply for and receive the benefits, including flexible options for documenting earnings and establishing the nature of their employment relationship or relationships. Outreach and education can be especially challenging for domestic workers, who often work in one-on-one settings, and whose employers don’t necessarily think of themselves as employers. Partnering with community-based and worker organizations can be especially helpful for ensuring sufficient outreach to domestic workers.
6: Protect workers against retaliation and ensure job protection.
All workers should be able to exercise their rights without worrying that they will be penalized for doing so. Strong anti-retaliation protections and job protections are important to ensure that workers feel safe and secure to take their sick days or use their leave time to care for themselves and the people who are most important to them—especially among nonstandard workers, whose job security can be precarious. To date, the paid sick days laws all protect workers against retaliation for exercising rights, filing complaints, and advising others of their rights. Many of the laws specifically say that retaliation includes reducing hours, reporting immigration status, giving demerits, reducing pay, and firing.
No one working in a nonstandard setting should worry that they will lose their job as a result of their health or caregiving needs.
In addition, policymakers should include in their paid leave legislation job protections for all employees taking leave. Nonstandard employees are often excluded from the job protections in the Family and Medical Leave Act, which guarantees the right to twelve weeks of job-protected unpaid leave for covered employees. Workers already in precarious employment situations need the guarantee that they can return to work after taking paid leave when they need it, as the Massachusetts law and the laws in Rhode Island and New York specify for family leave. No one working in a nonstandard setting should worry that they will lose their job as a result of their health or caregiving needs.
7: Proactively address misclassification.
Employers sometimes misclassify their employees as independent contractors to get around the costs and responsibilities of employment. Several organizations are working on research and solutions to address this. No one should be excluded because of how they are labeled. People labeled as contractors should have meaningful opportunities to learn about both benefits and the possibility that they have been misclassified, through effective outreach and education efforts. It’s also important to ensure that opting in as a self-employed person doesn’t hurt someone’s legal claim that they are an employee or risk their ability to access other benefits, and that they cannot be retaliated against for claiming a benefit.
8: Provide benefits workers can afford to use.
Paid leave programs provide partial wage replacement, while earned sick days programs cover the full paycheck. Policymakers should consider the impact of wage replacements levels on employees and ensure that the levels are high enough to make it affordable for all workers. In particular, nonstandard employees tend to have financial instability, few savings, and/or low incomes. They need a higher percentage of wage replacement because they are often already close to subsistence and struggling to pay their bills. A higher wage replacement rate will make it possible for them to participate in paid leave programs. For self-employed people, a low wage replacement rate may take away the incentive to opt into a voluntary program. To date, paid leave programs provide either a flat wage replacement rate up to a cap or a progressive wage replacement rate up to a cap. Progressive wage replacement provisions are key to ensuring that people with low pay can afford to use the benefits provided.
9: Account for issues of joint employment.
Some nonstandard workers have multiple employers for the same job. For example, temporary or staffing agencies place individuals to work with clients. Without clarity about which entity is the employer it is hard to exercise workplace rights. Policymakers must create clear rules about who is the employer, or the joint employers, and how the employee can exercise his or her rights. Those rules should also be as expansive as possible—ensuring, for example, that someone who has worked for a long period with a staffing agency while having short-term placements can count their employment with the agency toward eligibility requirements. Some state and local laws explicitly address how joint employment relationships work with regard to earned sick days: either with joint responsibility or by designating a primary employer.
10: Ensure fairness for part-time workers through the accrual model.
Part-time workers are included in all the paid leave laws to date. It is important to avoid a requirement of a minimum number of hours worked per week or per year that might exclude part-time workers. Similarly, most earned sick days laws include part-time workers by allowing workers to earn one hour of sick leave for every thirty hours worked, up to a cap that varies by jurisdiction. Basing the leave earned on hours worked, and not on days worked, is key to ensuring that part-time workers can earn sick time at the same rate as full-time workers. This model should be considered for other types of workplace standards as well.
Building a Better Future for Work—of All Kinds
While many issues related to creating truly inclusive paid leave and paid sick leave policies have yet to be solved, many states and localities are off to a brilliant start in creating social insurance programs and workplace standards that work for every worker, and not just for higher wage earners or the nine-to-five workforce. Policymakers updating existing workplace laws, or writing brand new ones, can be certain to be building on past successes if they follow these ten rules of paid leave and paid sick leave policy design.
The author thanks Sherry Leiwant and Molly Williamson at A Better Balance and Anna Wadia at the Ford Foundation.