Job growth and business formation at the 1-year anniversary of Seattle’s Paid Sick and Safe Leave law

In 2011, the City of Seattle adopted a paid sick and safe leave ordinance that went into effect on September 1,  2012. The law covers people working inside the city limits in companies with more than four employees, assuring them the right to earn paid leave to use for illness or healthcare needs of themselves or a close family member, during a public health emergency, or for dealing with domestic violence, sexual assault, or stalking.

San Francisco, Washington, DC, and Connecticut had already implemented paid sick leave standards at the time Seattle’s law was adopted. In 2013, Portland, OR and New York City have also passed sick leave laws. Nationally, about 40% of private sector workers do not  have access to paid sick leave, including 70% of workers in the bottom quarter of wages.  Advocates estimated that 190,000 of Seattle’s half million jobs did not offer paid sick leave in 2011, including nearly 30,000 in accommodation and food service, 20,000 in retail, and close to 20,000 in health services.  According to the Washington State Employment Security Department’s annual survey on employee benefits, 98% of accommodation and food service employers and 93% of retail employers in the state did not provide paid sick leave to all employees in 2012.

In the debate that led to passage of Seattle’s ordinance, almost everyone agreed that people should not be forced to work when sick, either because of employer practices or family finances. The public health and other consequences of sick workers spreading illness to their coworkers and customers, and of sick children left at school or daycare because their parents could not get off work, made a compelling case for setting a sick leave standard. Leaders in the Seattle small business community joined with health professionals, worker advocates, and community groups to craft a policy proposal that combined broad coverage with flexibility for small businesses. Despite the strong public health and moral case for passing paid sick days, some opponents argued that providing paid sick leave would significantly increase employers’ costs, potentially forcing them to reduce hiring, raise prices, or relocate outside the city limits.

This report compiles the available economic data on jobs, business location, and prices one year after implementation of Seattle’s paid sick and safe leave ordinance. It focuses especially on food service and retail firms, since they were particularly likely to have to change policies in response to the ordinance.