Paid Sick Days Benefit Workers, Employers

By Heather Boushey
Updated: 05/26/2009 05:31:56 PM EDT

The Connecticut General Assembly is considering a measure that would grant most workers paid sick days. This proposal has clear public health benefits, but could also prove a boon to employers and the Connecticut economy.

It's true that paid sick days are a direct expense for employers, but research shows that making employees come to work sick -- or firing them if they do not come to work -- costs employers more money than the cost of providing sick days.

If that seems counterintuitive, consider the following analogy. Changing the oil in your car typically costs about $25. Do that four times per year and you're looking at $100 annually. This starts to look like "real money" for families struggling in a difficult economy. But no one would suggest that car owners skimp on basic maintenance in order save money. Those short-term savings result in higher long-term costs in the form of larger repairs and a shorter life-span for the car.

The same principle applies to paid sick days.

The first and most significant savings comes from turnover costs. Benefits like paid sick days engender employee loyalty. Employees who do not have paid sick days are more likely to quit or to be fired if they miss work to tend to medical issues. Either way, the employer has to replace that employee, and that's an expensive proposition.

Even for low-wage and low-skill jobs, replacing an employee can cost the company around 20 percent of that employee's annual compensation.

A modest reduction in employee turnover translates into big savings for employers.
This is what economists mean when they talk about "cost-benefit analysis." Doing this right requires considering all of the costs as well as all of the benefits.

Paid sick days also reduce the cost of "presenteeism" -- when employees come to work even though they are too sick to be productive. We've all experienced this, or at least witnessed it in our own workplace. An employee is suffering with severe seasonal allergies or a migraine headache. He may be present, but his health condition impairs his job performance to such a degree that it's almost as if he wasn't really there. Absenteeism is easy to detect and measure, because managers know when an employee is not there. But the cost of presenteeism, while less obvious, turns out to be even greater -- costing U.S. employers $180 billion every year.

Paid sick days offer real savings for employers, but they're also a potentially enormous benefit for public health. Employees who lack paid sick days are less likely to get routine preventive medical care, less likely to get timely treatment for their illnesses and more likely to depend on emergency rooms as their default health care provider. The result is a more costly health care system for which we all pay the price.

A recent study published in the Journal of Epidemiology and Community Health showed that employees who come to work sick at least six times in a year are 74 percent more likely to experience serious health problems and longer work absences over the next 18 months. And a study on expanding paid sick days in Massachusetts concluded that reducing preventable emergency room visits could reduce health care spending by $959 million in the state.

Providing paid sick days, especially at a time when working families are struggling, makes good sense and is smart policy for employers and the economy.