Why Connecticut's Paid Sick Leave Law Didn't Kill Jobs
Businesses reported little increase in costs since the state became the first to require companies to compensate workers for sick days.
Two years ago Connecticut became the first state in the country to require that companies provide paid-sick time for their employees, even for part-time workers. As the proposal moved through the legislature, the Connecticut Business and Industry Association warned that “the added cost of the mandate ultimately will have to be borne by employers and their workers, either through lower wages, reduced benefits, or the elimination of positions.” But those dire predictions didn’t come true, according to a survey of businesses released last month by the Center for Economic Policy Research, the Murphy Institute and the City University of New York.
The major finding, which could influence future debates on paid-sick laws outside Connecticut, was that almost two-thirds of businesses in Connecticut reported small or no increases in cost. Almost half, 46.8 percent, of respondents reported no change and 19.1 percent reported a cost increase of less than 2 percent. Despite lobbying efforts by the business community before the bill became law, about three-quarters of respondents now say they support the law.
Opponents of paid-sick-day requirements say that workers will take off work when they aren't really sick, but the survey found that the vast majority of respondents (86 percent) didn't report any known cases of abuse. About a third of businesses saw an increase in usage of paid-sick days, but even so, about a third of workers still didn't use a single sick day in the past 12 months. When employees did miss a day, businesses adjusted by temporarily assigning their work to other people on staff, allowing workers to swap shifts and putting work on hold.
Paid-sick-day laws vary by jurisdiction, but they follow a basic template, excluding small businesses and only applying to employees after a probationary period. Workers can use the paid-sick days for themselves, their children, their spouses or in the aftermath of family violence. Several major cities around the country, including Seattle, San Francisco and Jersey City, have adopted municipal paid-sick-leave ordinances.
The Connecticut law allowed employees to accrue up to five paid-sick days per year, so long as they worked at a reasonably large business -- defined as one with 50 employees or more. Even after the law went into effect, only a small proportion of workers were covered -- between 12 percent and 18 percent of the state’s 1.7 million workers. That's because the Connecticut legislature included exemptions for small businesses, manufacturers and nationally chartered nonprofits, in addition to per diem workers and temporary workers.
To understand what the report's findings mean for other states and cities, Governing talked with one of the study's co-authors, Ruth Milkman, a sociologist at the City University of New York Graduate Center. The transcript has been edited for clarity and length.
What motivated you to take a look at this particular law?
I've been studying work family issues forever and Connecticut was a leader here. It was the first state to pass such a law. There are now quite a few around the country, mostly in cities. Connecticut is still the only statewide law. It just seemed like a really important thing to look at: How is it working out?
There is also a lot of political momentum for these kinds of measures in the country because workers really are struggling to figure out how to deal with their family responsibilities and their jobs at the same time. That’s why this is moving so rapidly across the country -- both paid-family leave and paid-sick leave. Many Americans are not even aware of how few workers have paid-sick days. When they find out it, they support it. The polls all show that there’s enormous public support for these kinds of things. That doesn’t mean that you can get them passed in the legislative process, certainly not in Washington right now. But in a lot of states and cities, it is feasible and that’s what’s happening.
One of the findings was that most of these businesses were not seeing workers use all of the paid-sick days available to them.
Yeah. We make a big deal about that because it shows that the fears of employers, that this will be abused and that everybody will take the maximum available, are not grounded in reality. In fact, workers see this as insurance. If they catch the flu and they need to take time off, or their kid is sick and they need to go to the doctor, then they use it for that. They don’t use it for fake events. Many of those days are not used in the end.
Do you think it also shows that the number of paid-sick days allowed is too high in Connecticut?
Five? Five a year? No, I don’t think so. That’s quite minimal, actually. San Francisco’s is much more than that. It depends on the person. There’s a lot of variation. I, myself, never get sick. I need maybe one a year. Other people need them because they’re sick two weeks out of the year. It varies and you have to allow for that. If someone has children, of course, their use is likely higher.
Do you think the specifics of the law matter?
Sure it matters. The Connecticut law is extremely limited. It has a lot of carve outs. Even excluding establishments with fewer than 50 employees excludes most businesses in the state. There was all this talk about restaurants and the public health issues when the people who serve your food are sick. But basically no restaurants are covered. Very few have more than 50 employees.
The other side of this is from the employer perspective. Even though they don’t realize themselves, it’s in their interests in many ways. Workers really appreciate it. It’s not very expensive. It helps with retention, which saves money. It’s very expensive to hire a new person. You have to screen them, you have to interview them, some people drug test. Those are all expenses you can avoid if you can reduce turnover through things like this, which keep people happy and wanting to stay with you.
How did you pick the 251 employers to survey?
It’s a stratified sample. We used a Dun and Bradstreet database of all establishments, as opposed to firms. So if a company has more than one location, each one counts as an establishment. We used that database and we only included the places that had 50 or more employees because otherwise they’re not included by the law. We did all the carve outs that were in the law. And then we oversampled the bigger firms because there weren’t that many of them and we wanted to be able to look at that as well.
So it is representative of the state. In the report, we adjust for the over sampling, so they’re weighted to replicate what a regular random sample would look like. It just gives us some information about the different size firms.
Were there differences in the responses by smaller businesses?
We don’t report that because there wasn’t a whole lot in the end. We break out the extent to which access to paid-sick leave increased with the new law. There’s very small differences between the three groups.
We’ve done a lot of research on this general issue. We did a whole book on the California paid-family-leave law and there we did see differences in answers and the differences were different from what some people suggest. There’s a lot of talk about how all this stuff is much more burdensome for small businesses, but we found that the small businesses were more positive in their view of the California law. We didn’t find a difference here, but that’s why we looked at it.
One of our big findings was that for all business establishments, regardless of size, this was kind of a non event. Many of them already had paid-sick days. The big impact was on companies that had significant numbers of part-time workers who are now covered by law. Many of them did not offer paid-sick days to part-time people. So all they’re doing is extending paid-sick days to this other group. It cost them a little bit of money, but it’s not a big trauma for them. They all said that to us.
Sometimes business advocates say if there’s any kind of cost, if this creates any kind of burden during this slow economic recovery, then we shouldn’t do it.
They always say that, even if times are good. They say it’s a job killer. We call it the “cry wolf” approach to this. They say it’s going to kill jobs and then, in fact, when it happens, it doesn’t. It’s such a small effect on the businesses involved. They’re just allergic to any kind of legislation. I understand it. They don’t want anyone telling them what to do. They feel like they know how to run their businesses better than anybody else. They’re probably right about that. And these laws are far from perfect. Their authors don’t always fully comprehend what it means for an employer. There are contradictions in the laws. In that sense, I feel their pain. But, you know, human needs trump that. If businesses were more cooperative, the laws could be tailored better for smoother implementation. With this Connecticut one though, they all said it was basically easy to implement it. One person said it took about 10 minutes.
What is the main takeaway for state and local officials who are looking to pass something like the Connecticut law?
This is a crowd pleaser. The public really likes it and you should think twice about business opposition because that’s only a small part of the story of what’s involved here.