Is Paid Sick Leave Too Expensive? Issue Examined In Light Of Coronavirus Outbreak

As efforts to contain coronavirus include pleas for those who are ill to stay home from work, researchers at the National Bureau of Economic Research reported Monday sick pay mandates do not cost employers much and actually improve overall welfare.

Only three members of the Organization for Economic Cooperation and Development – the U.S., Canada and Japan – do not provide for universal access to paid sick leave. In the U.S., employers have provided sick leave voluntarily with 97% of private sector employees in the finance and insurance sector having access compared to 41% in the food service and accommodation industry. Among low income and part-time employees, coverage is less than 50%. Overall, about 30% of U.S. workers have no paid sick leave.

“Put differently, the majority of low-income employees cannot take a paid sick day to recuperate when they [or their children] become sick. Many employees are not even eligible to take an unpaid sick day as the only existing federal law, the Family and Medical Leave Act of 1993, exempts part-time employees and employees in small employers,” authors Johanna Catherine Maclean of Temple University, Nicolas Ziebarth of Cornell University and Stefan Pichler of the KOF Swiss Economic Institute in their report, “Mandated Sick Pay: Coverage, Utilization and Welfare Effects.”

The report noted 75% of Americans support sick pay mandates. A dozen states and two dozen municipalities have adopted such mandates, and, using San Francisco as an example, there was no reduction in labor demand or wage growth as a result.

The report found when state mandates are imposed, newly covered employees take an average two additional sick days per calendar year, costing employers 2.7 cents per hour worked. There was no indication, the report said, employers curtailed other benefits to cover the cost.

The Centers for Disease Control and Prevention has advised Americans to stay home if they’re sick as the number of coronavirus cases in the U.S. topped 600, spreading to 34 states and the District of Columbia. Two dozen people have died.