Paid sick time proposal could add $400,000 to Portland budget

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A proposal to require Portland businesses to provide earned paid sick time to all employees, including part-time, seasonal, temporary and tipped workers may require the creation of a new department at City Hall and could potentially add roughly $400,000 to the city budget, according to an analysis by city staff.

The proposed ordinance, drafted by the Maine Women’s Lobby and Southern Maine Worker’s Center and being championed by Mayor Ethan Strimling, would require Portland businesses to provide all employees with one paid sick hour for every 30 hours worked.

Advocates estimate that the proposal, which would allow employees to earn and use up to six paid sick days a year, would help 19,000 workers in the city, mostly in the restaurant and hospitality industries. Any unused time would roll over to the following year, but would not be paid to employees if they leave their job.

Strimling said that he fully supports creating a labor department at City Hall, estimated to cost $210,000, since he said there are 65,000 to 70,000 workers in the city.

“Overall I think the cost in terms of staffing seems fine,” Strimling said. “I think it would be great for us to create a more substantial department of labor in the city to protect workers and make sure labor laws are enforced.”

The initial draft of the earned paid sick time ordinance is being opposed by the Portland Regional Chamber of Commerce, which partnered with the city on a survey of its members on the proposal. The survey results, as well as the city’s estimated enforcement costs, will be taken up by the council’s Health and Human Services Committee on Tuesday.

City Councilor Belinda Ray, who leads the committee, said the committee likely will tinker with the initial draft of the ordinance before sending it to the full council. She said the city and chamber survey offered valuable insights into potential impacts, despite complaints from the mayor and sick pay advocates who argued that it was biased against the proposal.

“I am optimistic that – through the work of the committee and the city staff – we can get to a point where we can create an ordinance that will work for Portland,” Ray said. “We have a ways to go before this ordinance is ready to be implemented.”

Strimling has discounted the survey results showing employer opposition, saying the survey had been “tainted” by the chamber’s opposition. And Eliza Townsend, executive director of the Maine Women’s Lobby, criticized the city-chamber survey and a memo from City Finance Director Brendan O’Connell framing the ordinance as a hardship, while ignoring the public health and economic benefits.

“I am disappointed that Mr. O’Connell seems so focused on finding reasons to oppose the measure rather than on solving a very real issue,” Townsend said. “A comprehensive evaluation of the impact of the ordinance should recognize that it will most affect low-wage workers, who spend their earnings immediately and locally on basic needs.”

City Manager Jon Jennings defended city staff’s handling of the survey and its cost estimates for enforcing and complying with the proposal. He said staff is being “as objective as humanly possible.”

“I would certainly dispute that we have an agenda going into this,” Jennings said. “It is important from our city’s perspective to know how much this will cost the city to administer.”

Portland would be the first community in Maine to adopt such a requirement, but it would join more than 26 other U.S. cities with similar rules. Last year, the Legislature turned down a statewide paid sick leave proposal, which would have made Maine the eighth U.S. state to require paid sick leave.

O’Connell said in a memo to the committee that the proposed ordinance would cost the city between $374,000 and $429,000 in the first year. That cost includes a new department of labor, which would be staffed by an investigator, one support staff and a half-time attorney.

The costs also include about $100,000 for the city to comply with the ordinance and offer paid sick time to about 500 city employees who are temporary, seasonal, on-call or tipped workers, and do not currently get paid time off when they are sick. The overall cost estimate also assumes contractors will charge more for public projects because of their own higher labor costs.

Those estimates are based on costs of similarly sized communities that have enacted sick leave ordinances, O’Connell said.

Associate Corporation Counsel Anne Torregrossa previously told the committee during a May 8 meeting that the ordinance would create legal uncertainty for the city. She noted that it was more complex than the city ordinance that sets an elevated minimum wage for employers in Portland.

Back in 2015, city officials estimated it would cost $100,000 to enforce the minimum wage ordinance, assuming that an additional staff person was needed. But so far, that hasn’t been the case. The education and enforcement has been handled by existing staff with minimal costs, and only a few violations, city staff said.

“I feel this (paid sick leave) would be a lot more complicated to enforce,” Torregrossa said. “There are more nuanced questions.”

The survey of employers found significant opposition in the business community, consistent with the chamber’s public stand.

The survey was sent to about 800 businesses. About 130 responded and about 73 percent of them said they don’t think a city should require mandatory earned paid sick leave.

Nearly 64 percent of respondents indicated they provide earned paid sick time to full-time employees.

But 72 percent said they did not offer sick time to part-time employees, 92 percent said they do not offer it to seasonal workers and 83 percent do not offer it to tipped workers.

And 59 percent said they would have to consider changes to their businesses if the ordinance were passed, while 14 percent said they were unsure.

Strimling criticized the survey for not asking employers about potential benefits of the policy, including potential improvements in staff morale and loyalty, or simply having a healthier workplace.

“(The survey) could have been much more useful,” he said. “We could have gotten much better data if we brought somebody in who was neutral.”

Portland mayor Ethan Strimling

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