Spotlight on Poverty and Opportunity, April 7, 2014
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Everyone gets sick sooner or later. Yet as recent government data show, more than a third of U.S. workers lack even one paid sick day they can use to recover from a fever or flu or to care for a child too sick to go to school. Nearly two-thirds of low-wage workers – those in the bottom quarter of the earnings distribution – lack any paid sick time, as do nearly three in four part-time workers.
The challenges resulting from this lack of flexibility are well-documented. On the other hand, employers often worry that paid sick days for low-wage or part-time employees will drive up costs, require excessive paperwork, and be used frivolously. A recent policy change in Connecticut offered an opportunity to put the concerns of the business community to the test, and it found that problems feared among employers by and large have not materialized.
On January 1, 2012, Connecticut became the first state in the nation to implement a law that allows workers, including those paid low wages or working part time, to earn paid sick days. Hourly workers in service sector establishments in the state accrue one hour of paid sick leave for every 40 hours worked, up to a maximum of 40 hours (5 days) of paid sick leave in a year.
My colleague, Professor Ruth Milkman of City University of New York, and I set out to learn about the experiences of Connecticut’s employers with the state’s paid sick leave law. A year and a half after the law went into effect, we surveyed 251 employers to hear what they had to say about the effects of the paid sick leave law on their businesses and organizations. The results are reassuring. Employers’ earlier misgivings proved to be misplaced; expanding access to paid sick days has turned out to have a modest impact on business operations and costs.
Of course, now that the new law provides more workers with access to paid sick days, there has been an increase in the number of workers who can stay home for a day or two when they are sick. About one-third of the employers we surveyed reported an increase in the use of paid sick days. However, employers noted that on average workers used only about half the paid sick days available to them (four days of the 7.7 available on average).
Moreover, half of workers who used paid sick days during the year used a total of three days or less, and a third of workers used no paid sick days at all. Employers reported minimal abuse of the paid sick leave law, with 86 percent of respondents reporting no known cases of abuse and another six percent reporting only one to three cases.
Our study also examined how businesses adapted to this increased workplace flexibility. Sixty-two percent of employers reported assigning the work of sick employees to other staff members, 13 percent put the work on hold, and 10 percent allowed the workers to swap shifts.
Given these straightforward adaptations to the new law, it is not surprising that almost two-thirds of employers reported no increase in costs (47 percent) or a small increase of less than 2 percent (19 percent). An additional 12 percent reported a cost increase but were unsure of the amount. This suggests, as more than one manager we interviewed told us, that the cost increase may have been “below the radar” and not worth tracking. Thus, for most employers, the overall effect on the bottom line was either nonexistent or minimal.
Further, despite fears that the paperwork required to track eligibility for paid sick leave would be a problem, a majority of employers reported that the law was not burdensome to administer, with 60 percent of respondents reporting that record-keeping was "very easy" or "somewhat easy."
These experiences appear to have made an impression on the business community, which had initially pushed back aggressively against the law. Eighteen months after paid sick leave was implemented in Connecticut, employers’ views of the law were decidedly positive; more than three-quarters responded that they supported the new law: 39.5 percent were "very supportive" of the measure, and another 37 percent were "somewhat supportive."
As other states and municipalities consider adopting legislation to allow workers to earn paid sick leave, the experiences of Connecticut’s employers should prove instructive. Employees make reasonable use of – and do not abuse – access to paid sick days. These workers thus receive an important benefit without imposing any significant costs on employers. As such, our results strongly suggest that there is no business case for opposing paid sick days.
Eileen Appelbaum is Senior Economist at the Center for Economic and Policy Research.