Beware fallout from mandated paid sick leave
Author: Michael Saltsman
Publication Date: July 2018
Newspaper: San Antonio Express News
Topics: Paid Sick Leave
Are labor unions trying to turn San Antonio into San Francisco?
A coalition calling itself Working Texans for Paid Sick Time has collected signatures for a ballot measure that would require all San Antonio businesses to offer paid sick leave — a workplace mandate that first took root in California’s famously liberal “City by the Bay.”
The coalition’s folksy name belies big-dollar backers like the Texas Organizing Project, which has received hundreds of thousands of dollars from national labor groups. Before San Antonio voters and legislators start taking policy cues from these powerful out-of-state interests, they should take a closer look at the evidence on paid leave mandates.
San Francisco in 2004 was the first city to implement a mandated paid sick leave policy, and business owners’ concerns were validated soon thereafter. In a report released a year after implementation, nearly 30 percent of the city’s lowest paid employees reported layoffs or reduced hours at their workplace.
More concerning, the law’s costs were offset with few benefits: Just 3.3 percent of employers reported a decrease in employees coming to work sick; most employers said there was no change in workplace illness. A study of Seattle’s paid sick leave mandate, conducted by the city auditor, found the same result.
Proponents of these mandates once claimed that employers would also benefit from a reduction in employee turnover in the workplace, with billions of dollars in savings estimated from a federal sick leave standard. Unfortunately for proponents, this benefit failed to materialize. In San Francisco, one employer noted that a benefit mandate could actually increase turnover, because there’s no longer an incentive to stay with one business over another.
When the turnover benefit failed to materialize, the talking point vanished as well. And without workplace benefits from a sick leave mandate, employers are left with workplace costs.
The most robust data on the impact of a paid sick leave mandate comes from Connecticut, the first state to enact this requirement. In a 2013 pilot study of the law’s impact, my organization surveyed Connecticut employers and found that many were reducing employee hours in response to the law’s costs. A 2016 study by a University of Kentucky economist validated these concerns, finding that young employees in Connecticut lost the equivalent of a week of work each year as a consequence of the mandate.
Another employer concern about sick leave that’s been validated by subsequent data is the potential misuse of the benefit. One employer surveyed in 2013 noticed a spike in the usage of paid sick leave benefits on Mondays —which suggested the benefit was being used for reasons other than personal health. A 2016 study using flu trend data from Google found that paid sick leave increased workplace absenteeism even where a flu outbreak wasn’t severe.
Multiple studies of local paid sick leave mandates have identified workplace illness as an “infrequent or insignificant” problem. This shouldn’t come as a surprise: Employers don’t want sick employees in the workplace any more than customers do. The Bureau of Labor Statistics show that the vast majority of employees, some 80 percent, have access to some sort of paid time off, such as paid vacation. Employers who can’t afford a paid benefit may instead have a shift-swapping system where employees can take time off and make up their shift later in the week.
Proponents of these laws invariably paint a picture of a hostile workplace, where heartless employers force employees to come to work despite poor health. The data don’t support that talking point. Rather, the collected evidence on sick leave shows that San Antonio, Dallas, and other Texas locales should proceed carefully before embracing the rose-colored rhetoric of Working Texans for Paid Sick Time.