Don’t be Fooled: Paid Sick Time Laws Don’t Cost Jobs

By Zoe Ziliak Michel

This month, the National Federation of Independent Business (NFIB) published misleading claims that the Healthy Families Act (HFA), proposed federal paid sick days legislation, will negatively affect employment. In claiming that the HFA will lead businesses to cut jobs, NIFB’s report disregards empirical evidence from jurisdictions that already have sick days laws. These laws have not caused job cuts; in fact, researchers have found that in some cases, jurisdictions with paid sick days laws are growing jobs faster than neighboring jurisdictions without them.

The NFIB report claims the HFA would cost the U.S. economy 430,000 jobs over a 10-year period. However, Seattle, San Francisco, and New York City—cities with established paid sick days standards—have boasted booming economies. In the first year Seattle’s ordinance was in effect, total employment in the city grew at a rate comparable to that of four comparator cities without paid sick days laws. Similarly, San Francisco has experienced faster employment growth (or slower declines during the Great Recession) than surrounding counties without paid sick days laws. And in New York City, nine months after the law took effect, the city’s unemployment rate was at its lowest level in six years. Further, the labor force participation rate was the highest on record and private industry had added over 91,000 jobs. The evidence is clear: economies stay strong with paid sick days laws.

NFIB’s calculations also ignore cost savings for employers providing paid sick days. Businesses with paid sick days save money through reduced turnover, reduced “presenteeism” (in which a sick worker comes in but cannot work at full capacity), and reduced spread of infection to additional employees. A cost-benefit analysis from the Institute for Women’s Policy Research concluded that HFA would produce net savings for employers. NFIB’s claims simply don’t hold up to scrutiny.

Business owners across the country support paid sick days laws, recognizing the benefits to both workers and the bottom line. For example, Keith Mestrich, president and CEO of Amalgamated Bank, said: “We want our customers to work for employers that support their economic security and enable them to be their best at work and at home… Amalgamated Bank supports legislation in our home state of New York, across the country, and at the federal level to ensure that our customers, and all Americans, have the paid sick days they need for a chance at financial stability.” Makini Howell, a Seattle restaurateur, explained the need for legislation: “Seventy-eight percent of people working in the restaurant industry do not earn a single paid sick day. And I understand it can be hard for a restaurant owner to go out on a limb and provide sick days when it’s not the industry standard. A paid sick days law sets a level playing field.”

In its press release announcing the report, NFIB states that “small business owners want to treat their employees fairly[.]” The HFA would accomplish just that, allowing workers across the country to seek preventive care, recover from illness, or care for their loved ones without losing pay. Evidence from jurisdictions with paid sick days laws already in place shows that businesses continue to thrive when their workers earn paid sick days. NFIB’s report will only fuel public criticisms that, rather than representing the voices of small business owners, the group prioritizes the interests of large corporations. In this case, NFIB simply hasn’t followed the evidence. The Healthy Families Act is just good business.