Rising fears over the novel coronavirus (COVID-19) throughout the United States and Nevada have brought the concept of a federal mandate for paid sick time off back into the limelight.

With a growing number of large events being cancelled, congressional Democrats and others have begun pushing for adoption of a federal policy to require that employers offer paid sick time off to employees. Spread of the virus — now deemed a pandemic by the World Health Organization — has prompted a new push with congressional Democrats introducing a new bill last week requiring all employers to offer at least seven days of paid sick time off (and an additional 14 days when there is a public health emergency).

Even though state lawmakers in 2019 approved a mandatory paid leave bill — making Nevada just the 12th state to require paid time off for workers — adoption of a federal paid leave policy could still have a sizable effect on the state.

That’s because the paid leave policy adopted by Nevada contained broad exemptions allowing any business with 50 or fewer employees to avoid the new requirement in law. That carve-out meant the bill exempted roughly 95 percent of employers and more than 36 percent of workers in the state.

Although the new Nevada bill does not require in-depth reporting of how many businesses are now offering paid time off, state Labor Commissioner Shannon Chambers said her office — charged with implementing and enforcing the new law — hasn’t exactly been overwhelmed with questions or concerns about the new policy since it took effect on Jan. 1, even with the rapidly spreading concerns over the coronavirus.

“A lot of companies, just to compete for employees, were already doing this,” she said. “So that made my job a little bit easier, and our office's job a little bit easier.”

Nationally, about 73 percent of workers have access to some kind of paid sick leave, but the percentage drops based on industry —  a 2019 federal Bureau of Labor Statistics survey found paid sick leave coverage was at 64 percent for salespeople and 58 percent for service workers. But even those policies are not uniform, and vary in the amount of sick time off that can be accrued or rolled over from year-to-year.

Already, some Nevada employee groups are pushing for expanded paid sick leave — the politically powerful Culinary Workers Local 226 proposed five paid sick days in emergency negotiations amid concerns of a likely economic slowdown from the virus. 

Economists interviewed by The Nevada Independent said regardless of the scope, the state’s new paid sick policy was a promising start and could help alleviate public health concerns of the virus continuing to spread, by giving many workers the option not to go into work while sick.

“It moves us a little bit into the right direction, that is, giving people the ability to have some time off without having to sacrifice their financial lives, without having to risk not being able to pay their rent, without having to risk not being able to buy food for their family,” UNLV Economics Department Chair Jeffrey Waddoups said. “So to the extent that it moves us in that direction, I think it's a good thing.”

What the bill does

Sponsored by Democratic Sen. Joyce Woodhouse, SB312 passed out of both legislative chambers with bipartisan majorities and broad support from the state’s business interests after lawmakers adopted a variety of exemptions and carve-outs into the bill.

As signed into law, the bill requires all private employers in the state with 50 or more employees to provide 40 hours of paid leave per year, accrued at a rate of 0.01923 hours of paid leave per hour worked (which works out to 40 hours of paid leave based on a year of 40-hour work weeks). The bill allows for paid leave for any reason, not just for illness-related issues.

Employees are allowed to begin using the paid leave within 90 calendar days of employment, and can use paid leave without providing a reason. Workers are supposed to notify their employers “as soon as practicable” if they plan to take paid time off, and cannot be retaliated against or forced to find a replacement worker.

Employers can set limits on minimum increments of paid time off (not to exceed four hours at any one time), but are not directly required to compensate employees for any unused paid leave days if they leave employment.

There’s also no requirement that employers carry over paid leave days, with the law stating that employers may allow accrued leave days to carry over to a maximum of 40 hours per benefit year.

The bill does not apply to employers with a matching or better paid leave policy, or to employees under a collective bargaining agreement that allows for paid time off, or to any seasonal, temporary or on-call employees. Businesses within the first two years of operation are also exempted from the paid leave requirement.

Approval of the bill made Nevada the 12th state to require employers offer a form of paid sick time off, joining Arizona, California, the District of Columbia, Connecticut, Maryland, Massachusetts, Michigan, New Jersey, Oregon, Rhode Island, Vermont and Washington.

In addition to the paid time off legislation, lawmakers in 2019 also approved another bill, AB181, that prohibits employers from requiring sick or injured workers from reporting in person to a workplace if they cannot work.

Exemptions

But Nevada’s paid time off laws had more expansive exemptions than most of those other states.

While an initial version of the bill would have applied the paid leave requirement to businesses with 25 or more employees, that exemption was amended and expanded to only apply to businesses with 50 or more employees. According to a 2019 Guinn Center for Policy Priorities study, increasing that exemption from businesses with 25 to 50 employees resulted in about 150,000 workers losing potential rights for paid leave. The law now only affects about 7 percent of businesses in the state. 

The 50-employee cutoff is used by only two other states (Connecticut and Michigan), while half of the states requiring paid time off for employees have no carve-outs based on employer size.

The 2019 Guinn Center analysis found that the large employer-size carve-out had a sizable effect on the number of workers covered under the new paid leave law. A carve-out of 15 workers or fewer would exempt about 17 percent of the state’s workforce and 80 percent of businesses in the state, while exempting businesses with fewer than 50 employees (the ultimate policy adopted) would exempt about 36 percent of workers — estimated at 476,000 people — and 93 percent of businesses in the state.

The bill as approved also exempts any business during its first two years of operation and doesn’t apply to any employer who provides a separate paid time off policy. It also exempted temporary, seasonal and on-call employees who don’t meet the hour requirements under the bill.

Implementation

The state labor commissioner’s office was charged with implementing and enforcing aspects of the paid time off bill and can impose administrative penalties of up to $5,000 for each violation against businesses that don’t follow the new law.

Chambers said her office included information on new requirements for paid sick leave in about 30 to 40 meetings that her office hosted to inform businesses of new wage and employment requirements passed by the 2019 Legislature. Her office also developed a one-page notice outlining the new requirements of the law, and a lengthier advisory opinion on the law with implementation instructions, including how to count employees to the 50-worker threshold and defining seasonal or temporary employees.

But outside of a small uptick in questions near the January 2020 effective date, Chambers said implementing the new paid leave law hasn’t been difficult given that many large employers in the state were already offering a form of paid sick leave to their employees.

“So far there hasn't been a wave of fights or complaints,” she said. “I'm hoping to keep it that way.”

Chambers said her office isn’t required to and isn’t tracking data on how many businesses in the state have started implementing paid sick leave policies, just the number of complaints filed with the office (one in the three months since it took effect that was quickly resolved.) She said most employers that have reached out with questions were trying to make sure their existing paid leave policies were sufficient under the new state requirements, and that the coronavirus outbreak hasn’t led to any great rush of questions or concerns with her office.

“I can tell you that as of right now, we really haven't received a great deal of questions from employers relating to the virus so far,” she said. “I think, again, this is just my opinion, I think employers are kind of following the federal guidelines and giving employees time off if they need it, maybe make other arrangements like teleworking and different things like that. But so far there has not been a wave of questions.”

Economic response

It’s difficult to measure the impact of the state’s new paid time off law, given that it has only been in effect since January and that there are no requirements for data collection or any other report on implementation.

But Waddoups said just about any policy that keeps sick workers at home and not at their place of employment is beneficial from a public health standpoint. He added that it was typical for there to be some employee-number cutoff in employment law, but that Nevada’s exemption was “fairly big.”

“It's just the start,” he said. “It doesn't cover as many workers as would be one would like, but at least there's something on the books now.”

Although federal studies indicate that service and retail workers are the least likely to have access to paid time off, Chambers said she had interacted with a “broad spectrum” of businesses affected by the new paid leave law, including restaurants, contractors and even some temp agencies.

Meredith Levine, the Guinn Center’s Economic Policy Director, said concerns with the coronavirus had helped recast the idea of paid sick leave from a worker protection policy to a public health policy.

“If the idea is harm reduction or mitigating spread, then we would want to investigate something that would be as robust as possible to ensure that that doesn't take place,” she said. “And certainly, not to diminish the idea or the aspect of wages themselves being important, but I think that there's kind of two dynamics going on, which is one is to ensure that workers are protected and then at the other time is to ensure that from a public health standpoint that those measures are in place.”