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Affidavits demonstrate impact of sick leave mandate on businesses
Published December 23, 2008 - BizTimes Daily
The Metropolitan Milwaukee Association of Commerce's lawsuit filed Monday against the City of Milwaukee's paid sick leave mandate included affidavits signed by four employers about the adverse impact the ordinance would impose upon their businesses.
The MMAC filed the suit against the city in Milwaukee County Circuit Court. The MMAC also filed a motion for a temporary injunction of the mandate while the legal disputes are being resolved.
The affidavits filed in conjunction with the suit included:
- George Lubeley, vice president of operations at Milwaukee-based Edward E. Gillen Company, a marine and deep foundation contractor, expressed concern about the mobility of its workers, and the difficulty in tracking the time they actually spend within the geographical boundaries of the city.
"It is not uncommon for a work crew to begin its work day in the city, load up its materials and equipment and travel to a job site outside the geographical boundaries of the city. Likewise, Gillen Company employs truck drivers. These truck drivers begin each day in the city and spend the day traveling to various job sites, some of which are within the geographic boundaries of the city and some of which are outside the geographic limits of the city," Lubeley stated.
According to the affidavit, Gillen Company will lose between $150,000 and $200,000 annually if it is forced to comply with the ordinance, but the firm also is uncertain about to track the real-time location of its truck drivers to determine how much of their time was spent within the city limits each day. - Richard Schmidt, president and chief executive officer of Milwaukee-based CG Schmidt Inc., expressed similar concerns about his construction company's employees.
"Almost 50 percent of CG Schmidt employees are members of local trade unions whose compensation packages are negotiated and codified in collective bargaining agreements. The current agreements do not include paid sick leave and the unions did not request paid sick leave during the last round of negotiations," Schmidt stated.
Schmidt said compliance to the law could cost his company $320,000 in 2009. - Ted Muccio, president of Pereles Bros. Inc., a plastic injection molding company that employs 73 people at its Milwaukee-based facility, said his firm's current benefit package is generous, but still does not comply with the new ordinance because it doesn't accrue one hour of paid time off for every 30 hours worked.
"Pereles Bros. currently provides its employees with paid vacation based on an employee's years of service. Pereles Bros. also provides its employees with three days of paid bereavement leave, which can be used when an employee's spouse or other family member (including parents, children, grandchildren, and grandparents) dies. Pereles Bros. also provides paid days off as an incentive to encourage and reward employees for consistently showing up for their scheduled shifts," Muccio stated.
According to the affidavit, Pereles Bros, will face a competitive disadvantage within its industry, because it is the only custom injection molding company within the city limits. The company's estimated costs for compliance of the ordinance would be $144,000 in 2009, Muccio said. - Stefani Miller, the owner of Beauty Inc., a Milwaukee-based hair salon with two locations within the city, said that since the ordinance was approved by voters, Miller has halted negotiations for the purchase of a third building in the city that was intended to house a new Beauty location. In addition, Miller estimates that she will have to layoff 10 to 15 employees in order to avoid operating at a deficit if the ordinance is enacted.
"Beauty will incur significant costs associated with its compliance with the Milwaukee Sick Pay Ordinance. The annual cost of providing nine paid days off to Beauty's employees is approximately $36,000. Because salon clients generally want to see a particular stylist, Beauty will also lose the revenue from the clients of a stylist who misses a day of work. Thus, Beauty stands to lose another approximately $45,000 to $50,000 of annual revenue as a result of the ordinance," Miller stated.
The MMAC has a court date scheduled for Thursday, Jan. 29, when Judge John DiMotto will decide how quickly the case moves forward.
To view the complaint filed by the MMAC, click here.
To read about the response of 9to5, the advocacy group that gathered the signatures to place the sick leave mandate referendum on the Nov. 4 ballot, click here.
To contribute to the MMAC's legal challenge fund, visit www.bizforgrowth.com.
To register to attend the Milwaukee Press Club's Newsmaker Luncheon about the mandate, click here.
