Sick leave mandate could force employees to work fewer hours

Original Article:

  • Author: Michael Saltsman

  • Publication Date: August 2016

  • Newspaper: Albuquerque Journal

  • Topics: Minimum Wage

The Albuquerque City Council is currently deciding whether to put a paid sick leave ballot initiative to city voters this Election Day. The proposal would require Albuquerque employers to offer up to seven days of paid sick leave each year to their employees.

Proponents argue the measure is necessary to give people the option of staying home when sick without forgoing pay. “No one should have to choose between their health and paying their bills,” said Amanda Gallegos, a member of Healthy Workforce ABQ, which is behind the initiative.

But new research by Thomas Ahn of the University of Kentucky suggests this choice might be made for them if the proposal is passed. Ahn finds that the costs of a paid sick leave mandate could result in fewer work hours and less income for younger employees.

In the most robust and extensive analysis of a sick leave mandate to date, Ahn’s research examines Connecticut’s first-in-the-nation state paid sick leave law, which was passed in 2011. Comparing Connecticut to the five surrounding New England states and controlling for other factors, he finds that Connecticut employees age 20-34 saw a 24-hour reduction in annual hours worked.

That may not sound like much, but it’s the equivalent of about one week’s worth of work per year for someone working part-time. He estimates that this change cost employees about $850 in annual income. That’s roughly the cost of one month’s apartment rent in Albuquerque.

Ahn’s research builds on an earlier Connecticut paid sick leave study, published in Applied Economics Letters, which finds a nearly 1 percent increase in the fraction of jobless employees in the state following the introduction of the mandate.

Such academic research confirms the logic that some employers offset the costs associated with paid sick leave mandates by reducing opportunities elsewhere. Surveys of employers clarify exactly how these opportunities are reduced.

For example, a survey of Connecticut employers conducted by my organization found that about one-third of affected businesses reduced employee benefits after the paid sick leave mandate took effect. In addition, one-fifth of respondents offset its costs by reducing hours or staffing levels.

Proponents might counter that such labor market consequences are warranted if it means keeping sick employees out of the workplace. “It’s important for people to remember that it impacts all of us when a worker has to go to work sick,” says Elizabeth Wagoner, an attorney at the New Mexico Center on Law and Poverty.

But a comprehensive review of five paid sick leave studies concluded that there was little evidence to support the claim that workplace illness is reduced following the introduction of sick leave mandates.

For instance, a study of San Francisco’s paid sick leave law finds that just 3.3 percent of employers reported that the mandate reduced workplace illness. Similar results were reported in Seattle.

Albuquerque employers’ worry that a paid sick leave law might be abused by some employees. This is already a problem: In a CareerBuilder poll last year of over 5,500 employees and hiring managers, nearly 40 percent of respondents said that employees called in sick from work even when they were feeling well.

New research by Ahn and his colleague Aaron Yelowitz examines existing paid sick leave laws in the United States and finds that they have increased employee absenteeism by 1.2 days per year. Notably, these absences do not tend to occur in times of the most severe influenza outbreaks – suggesting that employees may be using the benefit even when they’re not sick.

Given the growing body of research that finds questionable benefits of these mandates and real costs, Albuquerque would be well-served by a closer look at the rose-colored rhetoric used to sell this law.