BUSI 645 Week 5 DB Forum 3 Example

Discussion Board Forum 3

BUSI 645 Compensation Management, Discussion Board Forum 3 (thread and 2 replies)

Thread by [Student Name]

The forum prompt, the landscaping company and the two classmates' threads are composites standing in for the course's own; the textbook and research cited are real, and the requirements follow Liberty's public course guide for BUSI 645.

Thread

The composite landscaping company where I handle human resources employs about 90 people in North Carolina, most of them on mowing and installation crews paid hourly. Every spring, a cold or stomach virus moves through a crew in a week, because employees who stay home lose a day's pay and most cannot afford to. Martocchio (2017) separates legally required benefits, such as Social Security, unemployment insurance, workers' compensation and, for eligible employees, unpaid job-protected leave under federal family and medical leave law, from discretionary benefits that employers choose to offer. Paid sick leave falls in the second category for us: federal law does not require it, and our state has no mandate. The question is whether we should offer it anyway, and if so, how much and on what terms.

Research on mandates elsewhere gives a sense of what to expect. Callison and Pesko (2022) used geographic and timing differences in state and local paid sick leave mandates and found that mandates increased coverage and work absences among the workers most likely to gain coverage, with larger effects for women and households with children, and that mandates reduced presenteeism, the practice of working while sick. Pichler and Ziebarth (2017) addressed the public health side, using Google Flu data and the staggered timing of U.S. sick leave reforms to show that flu rates decreased after employees gained access to paid sick leave.

Those findings point in the same direction for our crews. Absences would rise somewhat, since that is the purpose of the benefit, but sick workers staying home would mean fewer healthy workers catching the illness. One paid sick day that keeps a virus out of a five-person truck can save four unpaid ones later. For outdoor work with heavy equipment and long days in the heat, there is a safety argument as well: an employee running a zero-turn mower with a fever is a risk to everyone nearby.

The cost is manageable. If each of our 80 hourly employees used all five days at an average of $18 an hour for eight hours, the maximum cost would be about $57,600 a year, and actual use is usually lower. Part of that outlay would come back through fewer crews running short when illness spreads and by lower turnover, since sick leave is one of the benefits hourly workers notice most.

Crew leaders would also need guidance, since some will see a sick call as letting the crew down; the policy works only if supervisors treat its use as normal. I would recommend five paid days a year, earned at one hour per 30 hours worked, usable after 90 days of employment, with no doctor's note required for absences of up to two days. The simple rules matter, because a benefit that is hard to use will not change behavior. After a year, we would compare absences, illness clusters on crews and turnover with the prior year to decide whether to keep or adjust it. I would be interested to hear whether classmates' employers have found that sick leave is abused, and how they handled it without discouraging legitimate use.

Reply to Keisha

Keisha, your thread explained how your manufacturing company's workers' compensation premiums rose after two serious injuries last year and asked whether there was anything the company could do besides absorb the increase. Martocchio (2017) explains that most employers' premiums are experience rated, so a company's own injury history raises or lowers what it pays. That means the most direct way to control the cost is to prevent injuries, since every claim avoided now lowers the premium for several years to come.

Evidence shows that safety interventions can do that without harming the business. Levine et al. (2012) studied a natural experiment in California, comparing 409 workplaces that received randomly assigned safety inspections with 409 matched workplaces that did not. The inspected employers saw injury rates fall by 9.4 percent and injury costs fall by 26 percent, and the gains did not show up as lost jobs, lower sales, weaker credit ratings or more business closures among the inspected firms.

Your company does not need a government inspection to act on that finding. An internal review of the two injuries, a walk-through by your insurer's loss control staff, which many carriers provide at no charge, and a safety committee that includes production workers would create the same kind of scrutiny. Because premiums are experience rated, the savings would show up in future premiums. It may also be worth reviewing how injured workers return to work, since modified duty that brings people back sooner lowers claim costs and keeps them connected to the job. Has your insurer offered a loss control visit, and does your company have a return-to-work program?

Reply to Paul

Paul, your thread argued that your accounting firm should add paid family leave beyond the unpaid twelve weeks that the Family and Medical Leave Act guarantees eligible employees. Martocchio (2017) explains that FMLA leave, available to eligible employees of covered employers, is job-protected but unpaid, which means many employees cannot afford to take it, especially lower-paid staff.

Research supports your proposal, with a caveat about how far the evidence reaches. Bartel et al. (2023) reviewed evidence on paid family and medical leave policies and found mostly beneficial effects of leave taken by new parents on infant, child and parental health. The evidence on employers was more limited but indicated that such policies do not impose major burdens on them. The authors noted that less is known about leave for caring for older children, adult family members or elderly relatives, and about how features like wage replacement rates and leave length matter.

That suggests designing your firm's policy with care and building in a review after the first year: perhaps six weeks at full pay for parental leave, where the evidence is strongest, and a smaller caregiving benefit that the firm can evaluate before expanding. For an accounting firm, scheduling leave outside the busy season where possible would also reduce disruption. A cost estimate would strengthen your proposal with the partners: with roughly forty employees, perhaps two or three parental leaves a year, the main cost is covering their work, which temporary staff or redistributed clients can handle outside busy season. How many employees do you expect would use it in a typical year?

References

Bartel, A., Rossin-Slater, M., Ruhm, C., Slopen, M., & Waldfogel, J. (2023). The impacts of paid family and medical leave on worker health, family well-being, and employer outcomes. Annual Review of Public Health, 44, 429-443. https://doi.org/10.1146/annurev-publhealth-071521-025257

Callison, K., & Pesko, M. F. (2022). The effect of paid sick leave mandates on coverage, work absences, and presenteeism. Journal of Human Resources, 57(4), 1178-1208. https://doi.org/10.3368/jhr.57.4.1017-9124R2

Levine, D. I., Toffel, M. W., & Johnson, M. S. (2012). Randomized government safety inspections reduce worker injuries with no detectable job loss. Science, 336(6083), 907-911. https://doi.org/10.1126/science.1215191

Martocchio, J. J. (2017). Strategic compensation: A human resource management approach (9th ed.). Pearson.

Pichler, S., & Ziebarth, N. R. (2017). The pros and cons of sick pay schemes: Testing for contagious presenteeism and noncontagious absenteeism behavior. Journal of Public Economics, 156, 14-33. https://doi.org/10.1016/j.jpubeco.2017.07.003