The United States is a member of a small club of nations, most of them poor, that have no nationwide policy requiring paid sick leave for workers.
The Obama administration has tried to work with Congress to change this, but legislation to mandate paid sick leave nationwide has stalled in Congress for years.
So President Obama took a different tack. As the nation’s chief executive, one of his duties is to set standards for companies that do business with the federal government. In February, he issued an executive order requiring federal contractors to provide paid sick leave. This week, the Labor Department issued a final rule to put the order into effect.
The rule, which applies to contracts solicited by the government as of Jan. 1, 2017, will eventually enable an estimated 1.1 million people to accrue up to seven days of paid sick leave a year.
Granted, that’s only a small fraction of the private-sector workers in the country, tens of millions of whom have no paid sick days. But it is an important start. The rule communicates that paid sick leave is a basic labor standard, not a discretionary fringe benefit. It also sets an example for all companies to follow. In the past, other presidents have used their authority to effect change by ordering federal contractors to end discriminatory hiring practices and promote affirmative action. Today, those are mainstream standards in human resource management.
The rule is also important because it is not a stand-alone effort. Rather, it is one of several improvements Mr. Obama has made in labor standards, for a cumulative effect that is greater than the sum of its parts. Mr. Obama has required federal contractors to pay their employees at least $10.10 an hour. He has also required federal procurement officials to take into account a company’s record of compliance with existing labor laws when awarding contracts. In a move that affects all employees, not only those who work for federal contractors, he has updated federal rules on overtime pay to restore the right to time-and-a-half for overtime to millions of salaried workers.
Corporate opponents of improved labor standards include the United States Chamber of Commerce and the International Franchise Association, which assert that compliance costs will outweigh any benefits from higher labor standards. The Obama administration understands something that those groups and their members do not: Fair wages, safe workplaces and sick pay are investments in human capital that pay off in terms of greater productivity, lower turnover, better corporate reputations and a stronger economy. As an added bonus, treating workers well is also the right thing to do. But since corporations all too often fail to look past the short-term profit that can be had by squeezing workers, they need rules to force them to take the long view.