Paid Sick Leave Legislation Ignores Unintended Consequences

Employment Policies Institute: Mandating Benefits May Help Some Employees While Hurting Others
  • Publication Date: September 2011

  • Topics: Health Care

Today, the Seattle City Council passed legislation (Bill No. 117216) requiring businesses to provide paid sick leave to their employees. This follows Connecticut’s similar legislation, the first state-wide sick leave mandate, which passed earlier this year. A sick leave initiative will appear on the ballot in Denver, Colorado, this November.

“Paid sick leave mandates are just the latest trend from advocacy groups wedded to the false notion that raising employers’ labor costs is actually good for business,” said Michael Saltsman, research fellow at the Employment Policies Institute. “A close look at advocates’ own research shows the opposite: both employers and employees are hurt by mandates like these.”

Proponents claim that “everybody benefits” from a sick leave mandate: employers, employees, and members of the public. They frequently cite a survey of employers conducted in San Francisco by the Institute for Women’s Policy Research (IWPR), following the passage of that city’s paid sick leave mandate.

“The survey’s authors downplay the inconvenient fact in their own research that industries that didn’t offer sick leave beforehand were more likely to report a negative impact on their bottom line,” Saltsman said.

Pressure on employers’ bottom line is often translated to unintended consequences for vulnerable employees.

“Close to 30 percent of the lowest-wage employees reported layoffs or reduced hours at their place of work after passage of the paid sick leave mandate,” Saltsman continued. “As we’ve seen with other mandates, they often hurt the employees they’re intended to help.”

Granting a new benefit also doesn’t guarantee that it will be used as intended: In a recent poll commissioned from the Opinion Research Corporation, over half (51 percent) of respondents said they knew someone who had used sick day benefits when they weren’t actually sick.

Saltsman concluded: “Close to 80 percent of private employers already offer some kind of paid leave. The remainder are low-margin industries that likely can’t afford it. Seattle and Connecticut have set a bad precedent where ‘feel-good’ policy trumps these hard economic realities.”