Employers' Views of Labor Standards Laws: Paid Leave and Minimum Wage Mandates

Background and purpose: In the face of growing inequality and concentration of income among the wealthy, advocates for economic justice and the well-being of low-income workers have turned their attention to promoting local labor standards laws. A growing number of cities, counties, and states have or are considering mandates that require employers provide paid sick or family leave to employees; adhere to certain “fair” scheduling practices such as adequate advance notification; or pay minimum wages above the federal rate. Once passed, the impact and success of local labor laws relies largely on employers’ largely voluntary compliance, and compliant employers must figure out ways in which to implement the new rules in ways that preserve overall business viability. Hence employers represent a key stage in the chain of logic connecting labor regulation with greater worker well-being.

This study examines the experiences and perspectives of for-profit employers during the implementation phase of two different local labor standard ordinances, Seattle’s Paid Sick and Safe Time Ordinance and Minimum Wage Ordinance. We examine how employers understand the respective labor standards (RQ1), how they plan to implement the new policy (RQ2), and whether and how their interpretation varies by their overall human resource philosophy (RQ3).

Methods: The study uses secondary analysis of in-depth interviews with 52 business owners or managers conducted during the implementation phases of a city paid sick leave ordinance or minimum wage ordinance. Most participating firms (49 of 52) were recruited via stratified random sampling from lists of city business license holders and compiled directories of minority and ethnic-community business associations. We oversampled firms with minority and immigrant owners in order to more robustly represent their experiences. Trained masters-level interviewers recruited participants and carried out the interviews under the supervision of a faculty member. Researchers audio-recorded the interviews, transcribed (and translated as necessary), checked transcriptions for fidelity, and prepared analytic summaries. For this paper, the first and second author re-read transcripts and prepared additional focused summaries corresponding to the main research questions. Case counts, outlier analysis, and other falsification tests ensure interpretation validity.

Findings: Employers recognized the value of these mandates, even as they disagreed with specifics. As one retail business owner noted when asked about paid leave, “There’s the business owner me and then there’s the person me.” In this case, she worried about it from a business perspective but agreed that people get sick and need time off. “High road” employers often voiced this perspective. However, regardless of their baseline practices, informants voiced frustration at what they saw as public intrusion into a private relationship. Another retail owner critiqued, “When you are a small business, you count on the people that you hire. And you take care of them. I don’t need some city bureaucrat to tell me what is good and what isn’t.”

Conclusions and Implications: Business owners and managers change business practices dutifully, but rarely enthusiastically, in order to implement labor standards. Our findings suggest design and outreach strategies to ensure policy fidelity.