On Tuesday, the D.C. Council will take its second and final vote on the Accrued Sick and Safe Leave Act, a piece of legislation that would greatly expand mandatory sick leave for all employees in the District. The legislation passed 11-2 on first reading on Feb. 5, but it stands to be heavily amended next week.

The D.C. Chamber of Commerce will be leading the charge. Chamber President Barbara B. Lang sent a letter Wednesday to Council Chairman Vincent C. Gray and colleagues that said her organization was “very concerned about the unforeseen and unintended consequences of this bill as well as its potentially devastating impact on small businesses.” To that end, Lang attached 14 proposed amendments to the bill.

To give you an idea of their thrust, here’s a summary of the first one: “Amendment #1 makes the District’s implementation of the bill contingent on the enactment of comparable legislation in both Maryland and Virginia.” You read that right: D.C. can go ahead and pass this, but it won’t actually be enforced until Annapolis and Richmond get behind it, too. There’s nothing the District loves more than waiting on those guys to ratify our own public policy.

Other amendments:

  • Mandatory yearly economic impact studies on the bill’s effects
  • A two-year sunset provision
  • Exemption for businesses with fewer than 10 employees
  • “Economic hardship” exemption
  • Exemption for waitstaff who work for minimum wage plus tips

Also wanting changes is the metro Consortium of Universities, who sent a letter yesterday proposing several amendments—-including one that would exempt graduate students (undergrads are already exempt).

The bill’s sponsor, At-Large Councilmember Carol Schwartz, will have her hands full come Tuesday. No word yet on which members will be carrying the C of C’s water as far as introducing any amendments, but Schwartz, who’s done a fine job of getting this thing this far, will have some interesting calculations to make.

Don’t take the 11-2 first reading vote as proof of strong Council backing—-the bill was very nearly tabled before the up-or-down vote. Yesterday, LL spied groups of sick-leave advocates making their way around the Wilson Building. Unfortunately for them, they don’t give thousands and thousands to local political campaigns—-local businesses do. Expect that to factor somewhat into Schwartz’s thinking, what with a re-election campaign coming up.

C of C letter after the jump.

February 27, 2008

The Honorable Vincent C. Gray Council of the District of Columbia 1350 Pennsylvania Avenue, NW Suite 506 Washington, D.C. 20004

Dear Chairman Gray:

The DC Chamber of Commerce would like to express its continued opposition to Bill 17-197, the Accrued Sick and Safe Leave Act of 2007, which is scheduled for second reading on Tuesday, March 4, 2008. The Chamber remains very concerned about the unforeseen and unintended consequences of this bill as well as its potentially devastating impact on small businesses. There are several grave economic implications with this bill that should cause members of the Council of the District of Columbia to amend this bill on second reading.

First, this bill has a direct financial impact on the city’s coffers because it is one of several legislative initiatives that discourage businesses from moving to or remaining in the District of Columbia. District leaders were shocked last week when Pepco announced that it was pursuing plans to move anywhere from 600 to 900 employees to Prince George’s and Montgomery Counties. This move is a tremendous economic loss for the District and a revenue windfall for the state of Maryland. These jobs represent lost revenue for the District through payroll tax for these positions and sales tax from employees patronizing DC businesses. The absence of a business community and its accompanying tax dollars is the absence of crucial revenue to operate the City.

Second, this bill could lead to increased levels of unemployment in the City because employers, in an effort to meet the bill’s requirements, will reduce the number of available jobs to cover the cost of providing paid leave to employees. The impact of a loss of jobs in the District should not be taken lightly because of the City’s unique challenges around workforce development and resident employment. In December 2007, the District’s unemployment rate was 6.1%, higher than the national unemployment rate of 4.9%. This bill has the very real potential to chill an already lukewarm employment market and a threat of an increased unemployment rate should be unacceptable to the City’s leadership.

Third, many mistakenly believe that the District of Columbia is a recession proof city because of the presence of the federal government. Although the “federal” District of Columbia tends not to be as impacted by a recession, “local” DC does not enjoy that same immunity and is just as vulnerable to the effects of a recession as any other urban jurisdiction. Moreover, the Chairman of the Federal Reserve lowered economic growth projections for the nation last week, which should serve as a hazard warning to the Council. Enacting this bill, or any bill, with uncertain, unknown and unstudied financial impact could be devastating to the local economy. The Chamber believes that business, government, and residents must work together to make the District a truly great City, but the grave financial impact of this bill makes that proposition unlikely.

Although the Chamber still remains very concerned about this bill, we are submitting amendments, which we believe will reduce the hurtful impact on District businesses. We continue to oppose this bill and its “one-size-fits-all” approach, particularly when a national recession is looming. We remain committed to working with you and other councilmembers to limit this bill’s unknown impact, since it appears some form of it could pass.

Each amendment seeks to address concerns raised at first reading. In order of priority to the business community, these are the amendments we believe would make this bill less destructive. We strongly urge you to support the attached amendments

Barbara B. Lang President and CEO

Enclosures cc: Councilmember Schwartz (At Large) Councilmember Catania (At Large) Councilmember Mendelson (At Large) Councilmember Brown (At Large) Councilmember Graham (Ward 1) Councilmember Evans (Ward 2) Councilmember Cheh (Ward 3) Councilmember Bowser (Ward 4) Councilmember Thomas (Ward 5) Councilmember Wells (Ward 6) Councilmember Alexander (Ward 7) Councilmember Barry (Ward 8)

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List of Proposed Amendments Bill 17-197, the Accrued Sick & Safe Leave Act of 2008

• Amendment #1 makes the District’s implementation of this bill contingent on the enactment of comparable legislation in both Maryland and Virginia. • Amendment #2 restores the DCFMLA definition of employee. • Amendment #3 deletes the term “critical shortage area” as it pertains to healthcare workers. • Amendment #4 follows the approach used by the “Way to Work” and “Living Wage” legislation and eliminates the ability to bargain away this benefit in a collective bargaining agreement. Since this is an important benefit, there should be no ability to bargain it away for more money. • Amendment #5 requires that an economic impact study be prepared by an independent auditor every year this bill is in effect to monitor its impact on businesses. No one knows the cost of this legislation to the private sector. Therefore, if DC will be the test case for the nation we must gather information on what this legislation is doing. • Amendment #6 is a sunset provision requiring a public hearing. No one knows what the impact of this bill will be, so this provision requires the Council to reexamine the law in 2010. • Amendment #7 specifically states that comparable paid time off and universal leave programs will qualify for exemption under the bill. • Amendment #8 would create an exemption if a business can show that implementation of the bill has caused an economic hardship and requires the Mayor to define by regulation what qualifies as an economic hardship. Similar exemptions are found in the smoking ban and other relevant statutes. • Amendment #9 revises the posting requirement and creates a penalty cap. This amendment makes clear that the Mayor shall provide notices of the act for posting and provides that businesses will not be liable if the Mayor has not provided such notices. It also caps the penalty at $500 for failure to post notice. • Amendment #10 creates a small business (fewer than 10 employees) exemption. • Amendment #11 strikes the section of the bill mandating that leave be immediately accessible to an employee who has left and later returns. As currently drafted, an employer is required to keep a former employee on the payroll system and track leave in case the employee returns. • Amendment #12 requires the Mayor to create rules and have them implemented prior to enactment. • Amendment #13 states that nothing in this bill prevents an employer from exercising its rights in the event of employee misconduct. • Amendment #14 exempts wait staff that work for a combination of minimum wage and tips.