Paid sick leave-recommendation of railway investors
2022.12.05 06:51
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Paid sick leave-recommendation of railway investors
Budrigannews.com – At two U.S. railroads, investors have proposed shareholder resolutions calling for paid sick leave for employees – an issue that nearly led to a national rail strike – and they may be put to an advisory vote at spring shareholder meetings.
Friday saw the signing of legislation by President Joe Biden to prevent a rail shutdown that could have had devastating effects on the American economy.
However, paid sick days for employees were not included in the agreement he approved, which was a major sticking point for unions in contract negotiations with five major U.S. railroads.
Reuters has seen proposals from activist investors asking Norfolk Southern Corporation (NYSE:)likewise Union Pacific Corp.to provide directors of the company with “a reasonable amount” of paid sick time.Each resolution would be on the ballot at the railroads’ spring shareholder meetings if it were approved.
According to Kate Monahan, a director at Trillium Asset Management, the socially conscious investor that submitted the resolution at Union Pacific, more flexible sick time would result in a reduction in employee turnover and other broader benefits.
She stated, “There is a crystal clear business case that makes sense to us as investors.”
A representative of Union Pacific declined to comment on the resolution, citing a statement from a trade group stating that industry workers already receive a significant amount of time and leave for illnesses that last longer.
A representative for Norfolk Southern declined to comment.
During the COVID-19 pandemic, resolutions on worker welfare have received more support at corporate annual meetings in recent years. The resolutions would not be subject to binding vote.
Railroads are concerned that implementing paid sick leave would necessitate hiring more workers at a time when many have drastically reduced their workforces.
Susquehanna analyst Bascome Majors wrote in an investor note on November 30 that if sick time had been included in recent federal legislation, it would have reduced U.S. rail earnings by 1.5 percent to 2 percent.
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