New study shows offering paid sick leave is good for US business

With the exception of a temporary federal law providing paid sick leave for certain workers between March and December 2020, the United States remains one of the few developed countries without federal protections for workers’ paid sick leave. In recent years, 14 states have enacted paid sick leave regulations, while 18 states have passed preventive legislation banning paid sick leave laws, largely due to concerns about the potential negative impact it could have on business.

A new study published in the American Journal of Industrial Medicine by researchers at Florida Atlantic University and Cleveland State University has found compelling evidence of the significant benefits of paid sick leave for businesses. The researchers systematically reviewed 22 years of research examining the relationship between sick pay and short- and long-term business outcomes in the United States. They considered factors such as company size, industry, and whether or not paid sick leave was required by a statutory mandate.

The main findings of the study show that access to paid sick leave leads to fewer accidents at work, the spread of contagious diseases, presenteeism (workers going to work sick) and worker deaths. There was more evidence linking paid sick leave to favorable business outcomes such as employee morale and job satisfaction, improved retention, higher profitability and firm performance, and favorable labor market conditions compared to evidence demonstrating negative business outcomes such as worker absenteeism.

“The results of our study certainly provide information about the voluntary adoption of paid sick leave policies by companies, as well as future legislation,” said LeaAnne DeRigne, Ph.D., co-author and professor at FAU’s Phyllis and Harvey Sandler School of Social Work social work and criminal law.

For the study, researchers examined the relationship between paid sick leave and correlates of job satisfaction, morale, work engagement, turnover, employee retention, employee health and safety, work injuries, presenteeism, absenteeism, labor market effects, profitability, productivity and performance.

“Given the weight that has been placed over time on the potential damage paid sick leave has done to businesses, we were surprised to find so little evidence to support this concern,” said Candice Vander Weerdt, Ph.D., lead author of the study and a faculty member at CSU’s College of Business. “Aside from a small increase in worker absenteeism, we actually found the opposite, a wealth of evidence suggesting that paid sick leave is associated with favorable business outcomes.”

Absence from work was the most frequently cited adverse consequence of paid sick leave for companies; However, the results of the study show how important it is for employees to stay at home when they are sick. Notably, most studies that found a small but significant increase in absenteeism related to paid sick leave also reported a decrease in presenteeism.

“Our study is particularly timely given the health concerns, mass layoffs, and labor shortages observed during the COVID-19 pandemic that have impacted access to healthy, reliable, and enduring human resources,” said Patricia Stoddard-Dare, Ph.D. , co-author and professor at the Faculty of Social Work of the CSU.

It is estimated that presenteeism costs US companies billions of dollars a year in lost productivity and can also impact work-related injuries and the spread of disease.

“Coming into work sick, injured, or ill can impact productivity and performance and lead to the spread of disease to other employees,” DeRigne said. “Every week, about 2 percent of workers go to work sick, especially women, low-wage workers and those aged 25 to 34.”

The researchers say there has been vigorous legislative activity over the past decade, both for and against paid sick leave.

“Although increased absenteeism from work is a serious concern for policymakers in the paid sick leave debate, our study showed that absenteeism from work, while disrupting business operations, can also limit the spread of contagious diseases in the workplace, thereby reducing work-related accidents and presenteeism encourage a faster return of employees to optimal functioning,” said Stoddard-Dare.

Considering the benefits to organizations that offer paid sick leave, such as B. Improved job satisfaction, job retention, better employee health and safety, and improved labor market performance, DeRigne, Vander Weerdt, and Stoddard-Dare find that the costs associated with increased absenteeism can be significantly mitigated.

“Paid sick leave laws have greatly improved access to paid sick leave. While 92 percent of Americans earning in the top quartile have access to paid sick leave, only 51 percent of those earning in the bottom quartile have access,” Vander Weerdt said. “These workers are often in the food service, hospitality or retail sectors, which means they are often on the front lines of our community.”

The researchers found evidence that paid sick leave was associated with a lower spread of disease, not just for workers themselves, but across the region where paid sick leave mandates were enacted. The results of this study provide a basis for understanding the business perspective related to paid sick leave.

“We hope that our study results will help inform a wide range of stakeholders and help them better prepare for routine and unexpected health disruptions while ensuring the well-being of the organization,” said Stoddard-Dare.

For the study, researchers used PRISMA (Preferred Reporting Items for Systematic Reviews and Meta-analyses) guidelines to systematically review six research databases between 2000 and November 2022.