Written by Gregory Heires   

Mayor Bill de Blasio’s proposal to expand New York City’s paid sick leave law faces business opposition, but concerns about the benefit’s cost are overblown.

In cities that have adopted laws requiring employers to provide their workers with paid sick days, businesses have generally not suffered. In fact, many employers even express support for the benefit, which advocates say encourages worker loyalty, reduces turnover and increases productivity.

Connecticut Covers 400,000

In 2011, Connecticut became the first state in the country to approve mandatory paid sick leave coverage. The law allows workers to use up to five days a year for their own illness or that of a child or spouse. It covers about 400,000 of the state’s 1.7 million employed workers.

A study Eileen Appelbaum, a senior economist at the Center for Economic and Policy Research, and Ruth Milkman, a professor at the City University of New York, found the law’s cost is minimal. The authors surveyed 251 employers and interviewed 15 business managers. Among their findings:

• only 10 percent of the businesses reported that the law caused their costs to increase by 3 percent or more

• the percentage of employers offering the coverage increased from 88.5 percent before the law took effect to 93.7 percent by mid-2013

• employers reported that about two-thirds of their workers used the benefit and that half of their employees used three days or less.

Employers reported positive effects of the law, including a reduction of the employees who come to work sick (18.8 percent), increased productivity (14.9 percent), a drop in the spread of illness (14.8 percent), improved morale (29.6 percent), increased loyalty (10.6 percent) and reduced employee turnover (3.3 percent).

In response to the survey, 39.5 percent of the employers said they were “very supportive” of the law while 37.0 percent reported being “somewhat supportive.”

Stopping the Race to the Bottom

The legislation proposed in New York City would add 360,000 more workers and 40,000 additional employers to a law approved last year that requires businesses with 15 or more employees to provide sick pay leave for their workers. The bill unveiled on Jan. 17 by de Blasio and New York City Council Speaker Melissa Mark-Viverito would extend the coverage to workers at businesses with five or more employees.

A policy memorandum by the Economic Policy Institute concludes that the law would not significantly impact businesses that don’t currently offer the benefit.

The study estimates that if all the employees of such employers used the benefit, the cost would range from 0.12 percent to 0.92 percent of sales. The actual cost should be lower, because workers entitled to five sick days typically use 1.5 to 3.0 days a year, depending up the type of job they have. That means, for instance, the benefit would cost wholesale trade businesses 0.06 percent of their sales and reduce the sales of businesses that provide administrative services by 0.54 percent.

“By adopting legislation that further extends paid sick days to its workers, New York City can build on its well-founded reputation for having a highly educated, healthy, and productive workforce,” the authors of the policy memorandum, Elise Gould and Doug Hall, write. “Without such regulation, policymakers and citizens can expect a continued ‘race to the bottom’ wherein competitive pressures cause employers to reduce benefits that improve the health of employees and, in this case, the health of the public.”

New York City is among a growing number of municipalities and counties that have implemented or are considering adopting paid sick leave legislation in the absence of a mandatory national law. Jersey City, Portland, Ore., San Francisco, Seattle, Washington, D.C., and 145 counties in the United States have sick leave laws.

The Need for Paid Sick Leave

“As wage growth has stagnated, benefits such as paid sick days have become all the more important to ensuring workers can stay out of poverty and in the middle class,” said Jane Farrell in a Center for American Progress 2012 brief, “Myth vs. Fact: Paid Sick Days.” She points out that typical families without sick leave coverage lose what they usually pay for their monthly grocery bill if they miss three-and-a-half days at work.

Nationwide, nearly 40 million U.S. workers lack paid sick leave coverage, according to the Economic Policy Institute. That’s almost 40 percent of the private-sector workforce. Just 15 percent of low-wage workers have the benefit, according to the Center for American Progress.

The Right's Counterattack

Meanwhile, as the movement for sick leave picks up, conservative interests are moving in the opposite direction.

Between 2000 and 2013, 10 states approved laws banning county and municipal governments from adopting sick leave laws, according to the Economic Policy Institute.

Many of the politicians sponsoring the legislation included members of the American Legislative Exchange Council, which crafts anti-government legislation for conservative politicians. Such pro-business groups as the Chamber of Commerce, National Federation of Independent Business and the Restaurant Association lobbied for the bans.

Regardless of the expense, paid sick leave simply makes sound public policy and the right thing to do. Yet the rapid Right will have nothing to do with it, even though the cost is minimal. You have to wonder if the conservatives who are fighting mandatory paid sick leave are ready to give up their own benefits.