Thousands of local business owners will have to start paying their workers for sick leave under a proposed state law that business groups have tagged as a job killer.

The bill would require employers to give full-time workers at least three days of paid sick leave each year. It also explicitly states that workers can sue their employers for denying sick time or retaliating against them for taking it.

Local restaurateur David Houston said he would be hit hard by the bill. Houston, president of the Barney’s Beanery chain in Los Angeles, currently only allows managers to take paid sick days as part of a broader paid time-off policy. Servers, kitchen staff and other line workers don’t get paid sick days. Barney’s employs 500 at its seven restaurants in and around Los Angeles.

“Given the margins in this business, that’s all we can afford,” Houston said. “If this bill passes, I would have to take a long look at other steps, like freezing hiring or laying people off.”

Several statewide business groups, including the California Chamber of Commerce, the state chapter of the National Federation of Independent Business and the California Restaurant Association, oppose the bill. The chamber has put the bill on its annual list of job killer bills.

The groups point to a similar law that passed in 2007 in San Francisco mandating five paid sick days a year, and claim that some small businesses have laid off workers, and reduced benefits and hours as a result.

“This bill will negatively impact small employers who are not able to maintain this (extra) cost and maintain their current level of costs in other areas,” said Jennifer Barrera, lobbyist with the California chamber. “They will have to adjust for this.”

Previous efforts to pass a paid sick leave mandate would have required seven to 10 days each year; this bill only demands three.

Business interests, however, raised other concerns and remain worried even after attempts by the bill’s author, Assemblywoman Lorena Gonzales, D-San Diego, to make the bill more palatable to employers.

For example, Gonzales said she is revising the bill to make it clear that the paid sick leave provisions only kick in after 90 days on the job. She is also revising the bill to allow employers to meet its requirements through paid time-off plans. Under such a plan, an employee accrues credits for vacation, sick time and personal days in one account. A paid time-off plan would qualify so long as the accrual rate matches or accedes the one hour off for every 30 hours worked that is in the Gonzales bill.

And she’s willing to negotiate with business interests over the right-to-sue provision.

“I’m trying to be practical about this bill, so I’m listening to the concerns of business and want to make this bill as reasonable as possible for business,” Gonzales told the Business Journal last week. “My goal is to pass this bill and get it signed.”

The bill, AB 1522, has cleared two Assembly committees and awaits another committee hearing next month.

Gonzales said the bill is designed to help low-wage workers whose employers don’t give them paid sick leave. Too often, such workers have to choose between getting a paycheck and taking sick leave for themselves or their children.

“I’m a single mother myself, so I know what it’s like to get that call from my child’s school saying I need to pick up my child who is sick,” she said. “I’m lucky because I could afford to take the time off, with or without pay. Low-wage workers don’t have that luxury.”

Often, she said, employees show up sick at work so as not to miss a day’s pay, which risks the illness spreading to others.

But employers and business groups say paying for sick leave should be worked out directly between management and workers, without a state mandate.

“This bill requires that employers provide all employees with paid sick leave … regardless of the size of the employer or (the employer’s) ability to compensate for the loss,” said John Kabateck, executive director of the California chapter of the National Federation of Independent Business.

Kabateck said that the bill would deprive employers of alternatives, such as rearranging schedules to accommodate worker requests.

The restaurant industry also wants to preserve the ability for workers to swap shifts, especially among servers who receive tips. The industry says many servers would rather swap shifts than accept a day of paid leave at minimum wage; that way they do not lose out on tips.

“Restaurants would be adversely affected by AB 1522 because the nature of the industry allows for flexible scheduling and shift swapping that won’t adversely affect an employee who comes down sick,” said Jot Condie, chief executive of the California Restaurant Association.

The greatest concern, though, relates to the bill’s right-to-sue provision. Specifically, the bill establishes a “rebuttable presumption of unlawful retaliation if any employer denies an employee the right to use paid sick days or takes other specified adverse action.”

That means employees who now might file wrongful termination lawsuits alleging sex discrimination or age discrimination could claim, under Gonzales’ bill, “retaliation for taking sick leave” in a similar lawsuit.

Jose Villa, president of Sensis, a multicultural ad agency in downtown Los Angeles that offers a broad paid time-off benefit including vacation and sick days as well as personal time, is concerned that the right-to-sue provision could turn into a bonanza for plaintiff’s attorneys comparable with the Americans With Disabilities Act.

“This creates another protected class for employees,” Villa said. “It opens up more avenues and reasons to sue employers, even those who are trying to play by the rules.”

Gonzales last week said that she was willing to negotiate on the right-to-sue provision, but was not open to eliminating it entirely. According to her, some low-wage employers instill a climate of fear to discourage workers from taking any time off, paid or unpaid.

“Look, I’m equally concerned about private right of action. My father had a small business and was hit with an abusive ADA lawsuit, so I get it,” she said. “But on the other hand, it may look great on paper if you have the ability to take a paid sick day off, but if you’re fearful of retaliatory action from management for doing so, you’re not going to use it.”

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