By PAUL  FRUMKIN

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NEW YORK (Sept. 28, 2009 ) —New York restaurateurs are gearing up for a fight with city hall as members of the City Council deliberate the passage of a measure that would mandate paid sick leave for employees.

Nearly three-quarters of the New York City Council’s 51 members have thrown their support behind a measure that operators and association officials insist would further punish restaurateurs already reeling from the effects of the recession.

If the measure were to pass, New York would become the third city behind San Francisco and Washington, D.C., to enact paid sick leave legislation.

“I don’t know how in this economy an industry such as ours can afford something like this,” said Rick Sampson, president and chief executive of the New York State Restaurant Association.

“I know [the legislation] is well-intended, but to ask small businesses to absorb these costs is ridiculous,” Sampson continued. “We’re lucky some of these businesses are staying afloat at all.”

The legislation would require businesses with more than 10 workers to offer them the opportunity of earning up to nine days of paid sick leave each year. Smaller businesses with fewer than 10 employees would be required to offer up to five paid sick days.

Employers would provide a minimum of one hour of paid sick leave for every 30 hours worked by an employee beginning 90 days after the employee’s starting date. Employees would have the right to use the time for themselves or to take care of a sick relative. The law would extend to full-time, part-time and temporary workers.

Proponents of the New York bill say that offering basic paid sick leave “is affordable for employers and good for business. Employers who provide paid sick time have greater employee retention and reduce the problem of workers coming to work sick.”

By PAUL  FRUMKIN

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But while operators maintain that paid sick leave would damage their already financially beleaguered businesses, the New York City chapters of the NYSRA also argue that the measure itself is illegal. “We don’t believe the city has the authority to pass such legislation,” said the association’s legislative counsel Robert Bookman. “For one thing, the city has no enforcement mechanism. There is no city department of labor. Who is going to oversee this?”

To oppose the measure, the city chapters of the NYSRA are joining together with a number of other trade associations as part of a coalition headed by the chambers of commerce of New York’s five boroughs. The five chambers have already sent a letter to Mayor Michael Bloomberg stating their opposition to the measure. According to The New York Times, Bloomberg has given “a qualified endorsement” to the effort.

“This is unlawful and will definitely wind up in the courts,” Bookman said.

The National Restaurant Association has identified paid sick leave as a hot-button issue for the restaurant industry. Legislation so far has been enacted in San Francisco in 2007 and in Washington, D.C. in 2008.

Washington’s sick leave legislation, however, exempts tipped workers, which has helped mitigate the impact of the law, said Andrew Kline, general counsel for the Restaurant Association of Metropolitan Washington. “We were able to prevail upon the City Council to change the original language. And that was important.”

But Kline also pointed out that problems exist with the law as written, and that it already has caused confusion in the District. “The law was sloppily written,” he said. “So there are inconsistencies in the terms of who might be eligible [for paid sick leave].”

In one section, the law states that workers become eligible after 90 days of employment, while in another section it states they are eligible after one year. “Eventually, this will probably have to be litigated,” Kline said.

Earlier this year, Milwaukee voters passed a referendum mandating paid sick leave, but a coalition of business groups including the Wisconsin Restaurant Association launched a challenge, arguing that it would be difficult for businesses to comply with the regulations. The Milwaukee County Circuit Court has since issued a permanent injunction prohibiting the implementation and enforcement of the ordinance.

Similar legislation has been introduced in at least 15 states, including Connecticut, New Jersey, Maine and Ohio. No states have passed legislation yet.

At the federal level, a companion bill titled the Healthy Families Act was introduced earlier this year by Rep. Rosa DeLauro, D-Conn., in the House and by the late Sen. Edward Kennedy, D-Mass., in the Senate. And while both measures have been reintroduced in several sessions of Congress, observers suggest that given the current mood in Washington to enact some manner of health care reform, it would not be inconceivable to see either measure attached to a larger, related bill.

Meanwhile, restaurateurs and association officials in New York City are monitoring the progress of the council’s paid sick leave legislation. Michael O’Neal, owner of O’Neal’s in Manhattan, said: “These are well-intended things that I would love to do, but we just can’t afford it right now. This has been the toughest summer we’ve ever experienced.”

Some proponents of paid sick leave also raise the ire of operators when they suggest that they simply raise their prices to pay for it. “What an irresponsible thing to say,” Sampson said. “Business is already bad, and if the price gets too high, people will just stop eating out. It’s frustrating dealing with people like that.”—pfrumkin@nrn.com