The High Cost of Being Sick when You Don’t Get Paid Sick Days

In The News

By Elise Gould and Jessica Schieder

While any new labor standard generates concerns about the business climate and job creation, the evidence from jurisdictions that have legislated earned paid sick days has been positive (National Partnership 2017a). The first jurisdiction to set a paid sick days standard was San Francisco, where employers have been required to allow employees to earn paid sick days since 2007. Fears that the law would impede job growth were never realized. In fact, during the five years following its implementation, employment in San Francisco grew twice as fast as in neighboring counties that had no paid sick days policy (Miller and Towne 2011). San Francisco’s job growth was faster even in the food service and hospitality sector, which is dominated by small businesses and viewed as vulnerable to additional costs, according to the Institute for Women’s Policy Research. The costs to business owners are practically negligible, but businesses and workers benefit from a more productive and healthier workforce (Drago and Lovell 2011).

Connecticut became the first state to enact a sick days standard in 2011. Prior to its passage, Hall and Gould (2011) estimated the cost of allowing Connecticut employees to earn five days of paid sick time a year to be only 0.19 percent of sales, including firms of all sizes. For employers already providing five or more days of sick time, there would be no cost at all. In addition to the fact that any additional costs could be easily absorbed through small changes in other forms of compensation, hours, prices, or profits, earned sick time may actually save employers money through reduced turnover and higher productivity. The Connecticut law went into effect in 2012. A year and a half after the law took effect, researchers at the Center for Economic and Policy Research found that the law brought paid sick days to a large number of workers, particularly part-time workers, at little to no cost to business (Appelbaum et al. 2014). Also by mid-2013, more than three-quarters of employers expressed support for the law, the center found.

Read more>>