Tuesday, March 29, 2011

Providing sick days and keeping abuse down to a dull roar

Millions of workers in the United States of America have no paid sick days. A large portion have no sick days at all. Get sick twice in a month, and you're fired.

Employers who don't provide sick days, and many who do, complain about the cost and the rampant abuse. Like any good thing, sick days can and will be abused. There is a sense of entitlement: this is part of my pay and benefits package, so I must use up my sick days.

That sense of entitlement is not entirely unjustified either. If an employer amortizes estimated cost of sick days when determining the total package they will agree to in collective bargaining, then the amortized cost will NOT be in your paycheck, so the way to get the benefit of it is... to take your sick days!

As a former union shop steward, I have a plan. Most traditional unions would not even consider it. Many rank and filed employees would reject it out of hand too. But, it might bring the benefits of sick days to millions who lack them now - and who can't get any sick days at all, via weak unions or no union at all, from intransigent managers and employers.

There are good reasons for paid sick days. An employee who has none will drag themselves to work if they possibly can. Managers think that is a good incentive to weed out slackers. But it also means, workers will show up woozy, inattentive, perhaps nauseous or with a wobbly sense of balance.

Safety is impaired, with implications for workers comp costs, lawsuits and settlements with clients, not to mention infections spreading to other employees, some of whom will then be unable to work. Still, it is true that if an employee has a base pay of $13 an hour, works a ten-hour four-day week, gets ten paid sick days a year, and uses them all, the cost to the employer is the same as raising wages by 62.5 cents an hour.

Doing this right requires a careful balance of incentives. Suppose every employee is given the option to select from two to ten sick days for the year. One half the cost of these sick days is amortized over the year and deducted from the employee's paycheck. If the cost is $1300 per year, and pay is biweekly, that would be $1300 / 26 /2 = $25 out of every biweekly paycheck. The other half of all sick days is paid by the employer.

At the end of the year, the employee can make the same choice again, BUT all unused sick days are rolled over. So, if only five days were used, and the employee opts to keep ten available, only $12.50 is deducted from each paycheck over the next year.

This provides a reasonable incentive not to use the sick days unless necessary. It provides the assurance that a given week's paycheck will not be short if an employee who is sick stays home (or, in the case of an ill child, stays home to provide necessary care). It shares the financial burden, without letting the employer off the hook.

In fact, the employer has some incentive to promote employee health -- and had a financial incentive to allow a sick employee to stay home, so there aren't MORE employees catching an illness, staying home, and collecting sick pay.

A really enlightened employer might also offer that employees who use less than half their sick days in a year get a day's pay as an annual bonus, or two days for not using any sick days at all.

Neither employers nor unions show much of this kind of creative thinking. None of us are angels, few of us are devils (a few employers come close), and none of us are heroes all the time. Solidarity forever is a worthy cause, but some unions figure they spend 40 percent of their money fulfilling a legal obligation to defend people who darned well ought to be fired.

Let's all open up a little. There will always be the nagging doubt that the company is making millions while denying workers enough to take proper care of their families. More often than not, this is a justified doubt, and powerful unions can help to dispel it by forcing management to loosen up.

But as Chris Hani, the late General Secretary of the Communist Party of South Africa, said in a speech to that country's Chamber of Commerce, the redistribution we need should not be the kind where we kill the cow and distribute the meat. We need some long term thinking, outside the box, on what will produce, and continue to produce.

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