The New York City Council has introduced legislation that would enable workers in the City who currently lack paid leave to earn up to nine days of paid sick leave per year, while employees of businesses with fewer than ten employees would be entitled to five paid sick days. Employers that already provide leave meeting the requirements of the proposed law, such as leave provided as paid time off (PTO), would not be required to offer additional leave.
Using data from 2008 from the Bureau of Labor Statistics and other public sources, the Institute for Women’s Policy Research (IWPR) estimates that approximately 850,000 workers who currently receive no paid sick days or paid vacation–30 percent of New York’s workforce–would be eligible to begin accruing leave when the new law is implemented. Providing paid sick days will cost New York employers an average of $8.86 per week for each employee receiving new sick leave. This represents an increase in cost equivalent to 25 cents per hour for an employee working 35 hours a week–less than the increases to the minimum wage in New York in recent years. These estimates account for productivity loss to affected businesses as well as the estimated cost of paying replacement workers.
The per-employee cost of implementing the new law is estimated to be lower for small businesses than for larger businesses. IWPR estimates that costs for larger businesses are expected to equal $9.28 per week–or 27 cents an hour–due to the higher number of required sick days under the new law and wages that are higher than those at small businesses. Due to the lower cap on the number of sick days that employers are required to provide and lower average wages paid by small businesses, it will cost small businesses an average of $6.72 per worker per week–equivalent to 19 cents per hour–to provide sick days as required by the law. Businesses paying less than the average wage paid to workers without sick days–estimated at $16.16 per hour– would pay less than the averages above.
“The cost of providing paid sick days to all New Yorkers may not be as high as some business owners fear. We find that providing paid sick days would cost affected employers about the same amount as a 25 cent wage increase,” said Dr. Kevin Miller, Senior Research Associate at IWPR. “Research also suggests that making paid sick days universal would have far-reaching benefits.”
Providing sick days allows workers to better address their health needs and those of their families. In addition, reducing the spread of influenza in public places, crowded subways, and classrooms would mean that fewer children would lose educational time and fewer parents would miss work. The risk of foodborne disease outbreaks at restaurants would be decreased, and in the event of a public health emergency, people could better follow government recommendations to keep themselves and their children at home.
IWPR calculated the cost of providing paid sick time based on the provisions of the new proposed New York City law. Costs are adjusted by the estimated amount of productivity currently lost by employees who work while ill and by expected productivity gains as a result of decreased contagion in the workplace. The findings and details of the methodology used will be released in a forthcoming IWPR publication that will be made available on the IWPR website. To access this and other publications about paid sick days, please visit www.iwpr.org.