Labor Force / Other

The True Cost of Sick Days

In his State of the Union address, President Obama announced his proposal for mandatory paid sick leave. He is proposing that businesses be required to provide seven days of paid sick leave per year to each employee. Currently, many people are forced to choose between going to work sick and forgoing a much needed paycheck. Proponents of the proposal remind us that when employees go to work sick, they are not only hurting themselves by not resting, but they also run the risk of infecting the rest of the workforce. Mandated paid leave would keep these people home and away from other healthy coworkers while also allowing them to recover without worrying about losing the money they need.

Many Americans are supportive of this plan and see no flaw. Others, however, are wondering if this idea is too good to be true. Some opponents to the proposal have stated that 91 percent of businesses already offer some form of paid sick leave, so it is unnecessary to require paid sick leave. This may not be a compelling reason for scrapping the proposal altogether; nevertheless, there are still many downsides to mandating paid sick leave. One side effect is that it hurts the employers as it will be harder for them to remain competitive. If every place offers the same amount of paid sick leave, than that is one less benefit that companies can use to attract employees.

The other, more detrimental flaw, is the fact that the money being paid to sick employees must come from somewhere. That money may come out of employees’ paychecks or benefits, hours may be cut, or customers may have to pay higher prices. Numerous studies have been done in areas that have already tried mandated paid sick leave in order to understand the outcome.

In 2014, the Colla Study was done in San Francisco, where a mandated sick leave law began in 2007. According to that study, 17.9 percent of businesses affected by the new law had some “negative consumer effect,” 11.9 percent had to raise prices, and 7.4 percent had decreased customer service.

Another study was done in 2014 in Connecticut, where there has been state mandated paid sick leave since 2012. Of those businesses who were affected by the law, 44.2 percent reduced vacation leave, required employees to pay more for health insurance, or reduced other benefits. Another 27.9 percent laid off workers, reduced wages, or reduced employee hours. Finally, 24.4 percent restricted expansion in Connecticut or expanded elsewhere instead, and 22.1 percent increased prices.

Although no one wants to go to work sick, mandating paid sick leave may not be the most efficient solution. A majority of employers already offer some form of paid sick leave so it may not be necessary for the government to take action. Further, the costs may not outweigh the benefits for this particular plan to succeed.


Day 286, Project 365 – 8.6.10 by William Brawley licensed under Creative Commons