Is Paid Sick Leave Good for Business?

-- by Teresa Kroeger, Center for Economic and Policy Research

Connecticut made history in 2011 as the first state to require employers to provide paid sick leave to all full-time and part-time employees. The law, which took effect on January 1, 2012, applies to around 400,000 Connecticut workers in businesses in service industries with fifty or more employees and allows these employees to earn 5 paid sick days a year.

To uncover the effects on businesses, Eileen Appelbaum, Senior Economist at CEPR and Ruth Milkman, Professor at CUNY surveyed 251 Connecticut employers and interviewed 15 Connecticut business managers. Their preliminary findings [PPT] were presented at a Labor and Employment Relations Association session at the economics meetings on January 3, 2014.

The authors found that the law had minimal effects on businesses. A large majority of employers reported that the law did not affect business operations and that they had no or only small increases in costs. Businesses most frequently covered absent workers by assigning the work to other employees, a solution which has little effect on costs. Just 10 percent of employers reported that the law caused their costs to increase by 3 percent or more. Since the implementation of the paid sick days law, Connecticut employers saw decreases in the spread of illnesses and increases in morale, among many more effects [PPT].

About 89 percent of employers already offered paid sick days to some or all of their employees prior to the law. An important effect of the law is that paid sick days coverage was extended to part-time employees who previously lacked such paid time off. The sectors with the largest changes in coverage to employees were hospitality, retail, and health, education, and social services.

Eighteen months after the law took effect, over three-fourths of employers reported that they were very supportive or somewhat supportive of the paid sick days law. Find out more in the authors' presentation [PPT] and stay tuned for the full report on Connecticut's paid sick days, which will be available next month.

The article originally appeared at the Center for Economic and Policy Research.