This is part of a series of posts on the proposal to require paid sick leave in Orange County. Supporters of mandating paid sick leave cite a variety of benefits including reducing "presenteeism," fewer trips to the emergency room, and savings from reduced worker turnover. Let's look at the evidence presented for each.
Presenteeism is the act of attending work while sick. As a result, others are made sick. The argument is that requiring companies to provide paid sick leave would reduce presenteeism, thus providing significant savings by limiting the spread of disease. Unfortunately, there are few studies of the impact of mandatory paid sick leave ordinances on presenteeism, in part because so few locales have implemented such a requirement. In a study of the San Francisco program, a survey indicated that 3.3% of companies reported reduced presenteeism as a result of the mandatory paid sick leave ordinance while 3.4% reported an increase, thus indicating little net effect on presenteeism. Who conducted that study? It can be found in appendix table 4 in a study called "San Francisco's Paid Sick Leave Ordinance: Outcomes for Employers and Employees" by the Institute for Women's Policy Research (a leading proponent of requiring paid sick leave).
Another reported benefit involves fewer trips to the emergency room, which results in significant savings to the community. A study used to support this conclusion is "Paid Sick Days and Health: Cost Savings from Reduced ER Visits," self-published by the Institute for Women's Policy Research. However, the statistical results shown in table C3 on page 27 of the study indicate that paid sick leave does not have a significant effect on ER visits. Thus, research by a group that supports mandatory paid sick leave finds no statistical link between mandatory paid sick leave and ER visits.
The major source of savings/benefits is considered to be reduced employee turnover. Why may this occur? Worker loyalty will improve as companies provide paid sick leave, thus causing workers to be more likely to remain with their current employer, helping the company avoid the need to hire and train new workers. Though this may be true for companies that voluntarilty provide paid sick leave, there is question as to whether this would also be true for businesses that are required to provide paid sick leave. Why would an employee be more loyal if they know that the company was forced to do it? Also, if most other companies in the county had to provide paid sick leave (all but firms with fewer than 15 employees), why be loyal to one company when the same benefit is provided by businesses throughout the county. Finally, the savings from any reduction in employee turnover are likely to differ significantly across industries. Many of the firms that currently do not provide paid sick leave tend to employ low-skilled workers. Savings from not having to hire and train new low-skilled workers are likely to be relatively small. Thus, requiring paid sick leave is unlikely to significantly reduce employee turnover and any savings that do result are likely to be small.
Does that mean there are no benefits from requiring paid sick leave? Not quite. Some people may benefit. However, most of the benefits suggested by the Institute for Women's Policy Research study are unlikely to materialize.
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