Connecticut’s Paid Sick Days Law Has Come With Few Costs And Many Benefits For Business

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Two years after it took effect, few of Connecticut’s businesses had significant costs when complying with the state’s paid sick days law and many have seen benefits, a new survey from Eileen Appelbaum and Ruth Milkman has found.

The two researchers surveyed 251 employers in the state and conducted 15 site visits or interviews with business managers. Only 10 percent reported an increase in their payroll costs by 3 percent or more. A large majority, on the other hand, said it didn’t affect their business operations and they had either a small or nonexistent increase in cost. To deal with any costs, about 10 percent said they reduced employees’ hours and just over 15 percent increased their prices. Less than 4 percent reduced their operating hours, less than 2 percent reduced their quality of service, and only 1 percent reduced wages.

In order to cover those who took paid time off for their own illness or to care for a sick family member, nearly two-thirds just assigned the work to other employees and another 13 percent allowed workers to swap shifts with each other, neither of which incur extra costs. Just over 11 percent decided to hire temporary replacement workers or put work on hold.

Meanwhile, the law now enjoys strong employer support, with more than three-quarters saying they are either very supportive or somewhat supportive, with most in the former camp. Employers also reported a variety of benefits from the law. Nearly 15 percent saw productivity increase, while about 30 percent saw improved morale and 12.5 percent experienced increased motivation. More than 10 percent said they saw more loyalty and 3.3 percent had a reduction in turnover. The health benefit was clear as well, as nearly 20 percent had fewer sick employees show up to work and about 15 percent reduced the spread of illnesses.

While workers can accrue up to five days off a year, half of the employers said their workers used three days or less and the average was four days, indicating that workers save the time off for when they need it. There was minimal abuse and “what little abuse there is was reported before as well as since the law took effect,” the researchers note. The coverage, however, increased so that nearly 94 percent of employers were offering at least five paid sick days, and on average they now offer nearly eight days, up from seven before the law was implemented.

Businesses in other cities that have passed paid sick days legislation have experienced similar results as to what was found in Connecticut. An audit of Washington, D.C.’s policy, which was enacted in 2008, found that it didn’t encourage business owners to relocate or discourage new ones from opening up. Job and business growth have remained strong under Seattle’s law after a year, with the former actually stronger. Job growth was also stronger under San Francisco’s law after it began in 2006 and very few businesses reported a negative impact, most saying it was either neutral or positive.

Besides Connecticut, San Francisco, Seattle, and D.C., there are three other cities that enacted paid sick days last year: Jersey City, NJ; New York City; and Portland, OR. It is likely too early to know the impacts on jobs and businesses yet, but the evidence is strong that it will be positive.

And that evidence may be part of what has spurred efforts to pass more paid sick days bills in Massachusetts, Oregon, New Jersey, and Vermont as well as the cities of Newark, NJ and Tacoma, WA. Nationally, however, there is no guarantee that workers will get paid time off for an illness or to care for a sick family member, which means 40 percent of private sector workers don’t have access to leave. The United States is the only country out of the 15 most competitive ones that doesn’t have such a guarantee.