Building an Economy that Works for Everyone

How much does it really cost businesses to provide paid sick days?

ShareThe recently released Bureau of Labor Statistics (BLS) newsletter on paid sick leave (featured in a previous post) has caught the attention of some policy experts and researchers because it features previously unreleased data on the true costs of paid sick days to businesses.

The BLS analysis finds the average cost for sick leave per employee hour worked for private-sector employers was just 23 cents. That’s less than $10 per week, and under $500 per year.

But that’s just the average cost to all private industry. The cost of providing paid sick days to sales and office workers was just 18 cents, or $375/year. For service workers: just 8 cents, or about $166 per year! So what drives up the average?

Higher costs for management and professionals (the very people who claim ‘costly mandates kill jobs’), which cost 53 cents per hour.

Additionally, the BLS estimate of hourly cost is similar to data presented in a 2009 report by the Institute for Women’s Policy Research (IWPR) titled Valuing Good Health in New York City: The Costs and Benefits of Paid Sick Days. In that report, IWPR researchers estimate the average hourly cost at 21 cents per hour.

And this analysis doesn’t even include the research that shows businesses providing paid sick days may benefit from increases in productivity and employee morale.

Now that the BLS has released hard data proving the cost of providing paid sick days is, on average, less than 1% of total compensation, maybe the NFIB can ease up on the ‘job-killer’ rhetoric when talking about paid sick days.

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