Bellingham City Council changed course after months of exploring a city mandate requiring employers to provide paid sick leave to the estimated 21,000 Bellingham workers who don’t already have it. The council voted unanimously on Nov. 6 to take on an advocacy role at the state level, putting on hold action at the city level.
Business owners and citizens were deeply divided on the topic — councilmember Pinky Vargas said she heard from more people about the issue than about everything else combined in her nearly two years on city council.
Council will ask the governor and state legislators to take on the issue of paid sick leave, which is required on a national level in most countries. The U.S. is the only developed country where workers aren’t guaranteed some form of paid sick leave, according to the Center for Economic and Policy Research.
“I think this is a bigger issue than just Bellingham can take on and should be implemented at the state level,” said council member Pinky Vargas, who proposed the resolution to take a statewide advocacy role. “I want us to be active participants and cheerleaders to make sure this gets the voice it deserves at the state level.”
The council made the decision after hearing from countless small business owners who opposed a city ordinance. But many who opposed a city ordinance said they would support a state law, Vargas said. The topic brought many business owners to council meetings who had never been before, as a show of hands at council committee listening session demonstrated.
City council outreach on the topic culminated in a public listening session in November where opponents and advocates packed council chambers to speak about what paid sick leave would mean for them. The discussion wasn’t about a specific ordinance, but the general idea of the city requiring paid sick leave, said council member Michael Lilliquist.
What Vargas heard at that listening session and during the last few months convinced her that a city ordinance would have an outsized impact on small businesses and have other downsides, she said.
“With the city trying to do an ordinance in isolation, it would cause a lot of unintended circumstances that most people were not aware of,” she said.
Council first discussed paid sick and safe leave in July, after an advocacy group called Healthy Bellingham presented a draft ordinance that would have required employers to give workers one hour of paid sick time per every 30 hours worked, or seven days a year for full-time workers.
At listening sessions, paid sick leave supporters told about sick children having to go to school because their parents can’t take time off to care for them, grocery store clerks who couldn’t afford to take a day off attempting to hide coughing or sniffling from customers. Others commented about how paid safe leave allowed them to escape domestic abuse or stalkers without worrying about how to pay rent.
Business owners opposed to an ordinance worried that it would make them unable to compete with businesses outside of Bellingham, that employees would abuse the policy, or that they would have to lay off employees to absorb the cost of providing paid sick time.
Businesses with multiple offices in the county would have different policies for their employees in Bellingham than employees at offices in Lynden and Ferndale. Many business owners who spoke at the listening session said they already offered paid sick leave, but didn’t think it was the city’s place to mandate paid sick leave.
“The general objective of this, I am not against,” said Bob Diehl, owner of Diehl Ford, at the listening session. “If it were legislated statewide or nationwide that would be fine.”
It’s worked elsewhere
So far, those concerns haven’t been an issue in U.S. cities and states that recently implemented paid sick leave laws, at least not according to the limited studies on those cities.
Seattle began requiring employers to give workers paid sick and safe leave on Sept. 1, 2012. After the policy had been in effect for a full year, 70 percent of employers supported it, according to a 2014 University of Washington study. The study was based on a survey of 300 randomly sampled employers.
Businesses dealt with the ordinance in a variety of ways: 8.2 percent of businesses in the study had raised prices to pass on costs, 6.4 percent had decreased employee pay raises or bonuses and 5.3 percent reduced paid vacation time. About 17 percent of employers said providing paid sick leave made them less profitable.
Overall, costs and impacts to employers were smaller than anticipated, according to the study. Businesses surveyed reported that providing paid sick leave cost on averaged about four-tenths of one percent of total revenue.
“The majority of employers have seen no effect of the ordinance on customer service, employee morale, predictability of employee absenteeism, or profitability,” the study said. “There is no evidence that the ordinance caused employers to go out of business or leave Seattle.”
In general, workers used less paid leave than employers expected. On the question of abusing the policy, 86 percent of employers reported no known cases of abuse and 6 percent reported 1-3 cases in the year after the ordinance started.
A less detailed study in Connecticut, which began guaranteeing sick leave to workers on Jan. 1, 2012, found similar results.
Tacoma also has a paid sick ordinance. Other cities across the county with ordinances include San Francisco, Pittsburgh, Philadelphia, and the small New Jersey towns Trenton and Montclair. The policies they adopted vary. Some jurisdictions don’t require businesses with less than four employees to pay for sick leave, and part-time workers are exempt in others, for example.
Bellingham is smaller than most of the U.S. cities that have mandated paid sick leave.
Bellingham isn’t Seattle
Bellingham isn’t Seattle. That was Bellingham/Whatcom Chamber of Commerce and Industry president and CEO Guy Occhiogrosso’s message to city council at the listening session.
“Seattle is an economic magnet. If you’re in Seattle, you have such a large consumer and population base,” Occhiogrosso said. “Bellingham is certainly the regional hub, but it’s just as easy for a business to locate outside of Bellingham.”
In other words, it’s harder for Seattle businesses to move outside the city and escape the regulation, because if they do that they distance themselves from their customers. If a Bellingham business moves five miles up the freeway, employees will likely stay with the business and customers will continue to come, Occhiogrosso said.
Occhiogrosso has also heard from a lot of people about the issue in the last six months, he said, and they mostly say the same thing. Chamber members and other local business owners are very unified in opposing a city ordinance for sick leave, he said.
“With nine years of local chamber experience in this community and county this is probably the first time that I’ve seen this much of a unified business concern,” he said.
About 70 percent of chamber members are small businesses with 20 or fewer employees, and many of them think the ordinance will impact them significantly. Many of the business owners who spoke at the public listening session had 20 or fewer employees, and no one showed up representing a business based outside Whatcom County.
The majority of businesses that Occhiogrosso has heard from already offer paid sick leave, he said.
“A lot of people are saying it’s just increasing the perception that Bellingham is bad for business,” he said. “A large percentage feel that it’s not the city’s authority to implement this type of an ordinance.”
But is a state level decision more appropriate?
“It doesn’t make it a business friendly decision. It makes it more palatable to businesses,” Occhiogrosso said. “We’re not going to lose business to Skagit, or anywhere up and down I-5.”
Local ordinance still a possibility
City Council’s resolution to advocate for paid sick leave at the state level doesn’t preclude the council from implementing a local law, but some council members worried that it would put an end to the council’s action on paid sick leave, at least until after the upcoming legislative session.
“I support this level of outreach, absolutely, but I don’t want this to put an end to the dialogue here in Bellingham,” council member Roxanne Murphy said. “We had such a 50/50 split, it felt like, at our listening session and I want to get more feedback on that and see if we can come up with something with a little more middle ground.”
The state House in 2015 passed a bill to require paid sick leave for most companies with more than five employees, but the bill didn’t pass the Senate.
Paid safe leave
The discussion held by the city wasn’t about a specific ordinance and the city didn’t create a draft of an ordinance, but the council expressed an interest in requiring paid safe leave as part of any specific rule.
Seattle’s ordinance allows paid safe leave to be used for reasons related to domestic violence, sexual assault or stalking that affect the employee or their family members. Employees can also use paid safe leave if a public official closes their workplace or their child’s school closes because of a toxin or hazard.
Adrianna Sharp, an advocate with Domestic Violence and Sexual Assault Services of Whatcom County, said paid safe leave is a huge advantage to people suffering from domestic violence, sexual assault or stalking. A paid day off allows time to move out, set up a new bank account or take other action when an abuser isn’t expecting them at home.
“One thing that would be helpful for a large number of people in those situations would be to take a day off and not have to worry about housing or food, and to go get help, lean on family members, rebuild a support network for themselves, or move out of the situation that is dangerous and often violent,” Sharp said.
Not all business owners oppose it
Inspired by the City Council’s discussion, Black Drop Coffee, a downtown coffee shop with 10 employees, implemented a paid sick policy early this year after six months of discussing it.
Under the policy, employees accrue sick pay at a rate of one hour per 30 hours worked. If employees use all their sick pay, which owner Stephanie Oppelaar doesn’t expect, the policy will cost $200 a month.
An employee would need to work 240 hours to earn a paid sick day.
“I can’t look employees in the face and say the 240 hours they’ve worked is not enough for them to be able to be sick for one day without having to worry about paying rent,” Oppelaar said.
Oppelaar thinks her policy will result in less employee turnover. And it could even reduce the number of days that employees call in sick, which is rare already, she said. Sick employees can get other employees sick, and with a staff of 10, that’s tough for the shop to handle, Oppelaar said.
Though Black Drop’s policy hasn’t made the shop less competitive, Oppelaar would still prefer a statewide rule, she said.
“I think a state level law would be amazing, but I don’t think it’s going to happen on a state level,” she said.
Oliver Lazenby, associate editor of The Bellingham Business Journal, can be reached at 360-647-8805, Ext. 5052, or firstname.lastname@example.org.