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GOOD FOR BUSINESS?
The Case of Paid Sick Leave in Connecticut
Eileen Appelbaum, CEPR
Ruth Milkman, CUNY
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On July 1, 2011, Connecticut became the
first state to require employer-paid Paid
Sick Days; law took effect on Jan. 1, 2012
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Covers about 400,000 of the state’s 1.7 million employed workers
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Many carve-outs, including manufacturing and most nationallychartered nonprofits, as well as per diem and temporary workers
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Covers most non-exempt service sector establishments employing 50
or more workers, including part-time workers
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Those covered accrue one hour of paid sick leave for every 40 hours
they work; can draw on the benefit after 680 hours’ work
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Can accrue up to 5 days per year
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Can use leave for own illness, injury, or medical care, for a child’s or
spouse, or for care related to family violence or sexual assault
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The law prohibits employer retaliation against workers who request or
use paid sick leave
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We surveyed 251 covered CT
employers and conducted 15 site
visits/interviews with managers
 Survey:
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Dun and Bradstreet sample, stratified by employer size
Oversampled large establishments
36% response rate (AAPOR RR 3)
 Interviews
with a convenience sample
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Businesses concerned about
negative impact, but for most, a
non-event with minimal burdens
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Carve-outs limited the impact
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Employers that already offered paid sick days made minimal or
no adjustments
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Minimal abuse reported (and what little abuse there is was
reported before as well as since the law took effect)
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But coverage did increase: 88.5% of employers surveyed had
offered 5+ PSD before the law took effect; by mid-2013, 93.7%
did so
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Number of days offered also rose slightly from an average of 6.9
days prior to the law’s implementation to 7.7 days in mid-2013
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Main Impact on Hospitality, Retail,
Health, Education & Social
Services
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Most workers use fewer Paid Sick
Days than available
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Employer respondents reported that about 2/3 of their workers
had used the PSD benefit
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Of those who did use it, average take up was 4 days (of 7.7 days
available on average) in the previous year
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Half of employers reported that employees used 3 days or less
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This evidence suggests workers save PSD for when they are really
needed, treating the program as a type of insurance
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PSD law interacts with “progressive
discipline” in unanticipated ways
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The law’s anti-retaliation provision protects covered workers
from discipline for the first 5 days they are absent from work
if it is for a purpose covered by the PSD law
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Employers that punish absences with warnings leading to
termination were more likely to report abuse than those
without progressive discipline
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Interesting exception: if progressive discipline was limited
to UNEXCUSED absences, less abuse was reported than in
cases with no system of progressive discipline
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Employer-reported positive effects
of PSD law
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Most covered the work of absent
employees at minimal cost
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Minimal cost impact
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Only 10% of employers reported the law increased payroll costs
by 3% or more
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Biggest cost impact was on employers with lots of part-time
workers; indeed the main benefit of the law was to these workers
employed in establishments that previously offered PSD only to
full-time workers
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Unionized establishments half as likely to report cost increases
as non-union ones
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Record keeping burden was minimal as well, once system set up
to track the benefit.
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“It’s easy. It takes ten minutes” (nursing home payroll manager)
Only 29% of respondents tracked PSD costs separately from
other benefits
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“It would cost us more administratively to track the costs ... No
hardship whatsoever!” (entertainment industry HR manager)
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Few changes in operations due to
increased costs
(N=240, multiple responses could be reported )
Operational change
Percent reporting
Reduced employee hours
10.6%
Increased prices
15.6%
Reduced operating hours
3.4%
Reduced quality of service
1.3%
Reduced wages
1.0%
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Employer Support for the Law has
increased since implementation
 We
heard employers complain about legislators’
lack of understanding of business operations,
and various other anti-regulation rants
 Yet
18 months after the law took effect, most
employers surveyed were supportive:
 39.5% were “very supportive” of the PSD law
 37.0% were “somewhat supportive”
 Overall:
a non-event for employers with real
benefits for covered workers, especially parttime service workers