Why Providing Paid Sick Leave can Save you Money

We’ve all been sat at our desks, busy working away, painfully aware of the coughing and sneezing going on just a few feet away. It’s often the case that those who drag themselves to work with an illness feel like they’re doing the business a favour and almost relish the chance to suffer at their desks, but the reality is, those who are genuinely ill are actually doing their employer a disservice.

Every week in America, about 1.5 million workers go to work despite feeling ill. Why? While some might enjoy the martyrdom and want to show their employer they are willing to suffer for the cause, the truth is that many cannot afford to take the day off. Unlike the vast majority of countries in the industrialised world, not all American employers are legally required to provide paid sick leave for all their employees. The result is that in workplaces like restaurants and hospitals, two settings where illness can be easily spread, many employees go to work when they are unwell.

A false economy

Of course, the reason many employers choose not to offer their employees paid sick leave is to save money. Conventional economic theory suggests that the costs of paid sick leave would simply be passed onto workers in the form of reductions to other benefits such as holiday entitlement or a fall in wages. But conversely, a number of studies, such as this one which shows paid sick leave can reduce contagion, suggest the employer will benefit financially by offering their employers an incentive to take time off when they are ill.

The theory behind this is simple. If we go back to the all too familiar example at the top of this page, when the desperately unwell worker drags themselves into the office, in a couple of days, when they’re feeling better, everyone around them drops like flies. If paid sick leave was in place, the one worker who was feeling unwell would probably have stayed at home. By going to work the illness can spread, impacting the wider workforce and reducing productivity.

The state of sick pay around the world

In Europe,research from vouchercloud shows sick pay can vary quite dramatically from country to country. Countries like Liechtenstein and Switzerland lead the tables in terms of mandatory sick pay, with the United Kingdom and Finland lagging some way behind. The study found that the average worker in Europe receives 65 percent of their salary as pay during a single week of sick leave, or 70 percent of sick pay across a typical month of absence. Other countries at the top of the table were Norway, Germany, Austria and Belgium, which all pay out 100 percent of a worker’s wage for both a week and month of sick leave.

The picture in the US

Attitudes to paid sick leave across the US are far from consistent. There are a number of cities and states where employers must offer paid sick leave. That includes cities like New York, Seattle, Washington DC and Philadelphia, and the states of Oregon, Massachusetts, California and Connecticut. But that leaves much of the country and an estimated 45 percent of the American workforce, equivalent to 50 million workers, without the cover they need. The result is that every week, around 1.5 million Americans go to work when they are unwell.

Of those, a study by the Florida Atlantic University has found that low-income mothers are the most likely to go to work when they are unwell, simply because they have no other choice. The research revealed that the lack of paid sick leave was most likely to affect those who needed it the most, with 65 percent of families with an income below $35,000 entitled to no sick leave at all, compared to just 25 percent of those with an annual income in excess of $100,000.

The health and economic benefits of paid sick leave

There are numerous benefits associated with providing paid sick leave for employees. One of the most significant is the use of sick leave as a preventative measure, reducing the likelihood of more serious health problems developing in the future. Workers without paid leave are more likely to delay seeking medical care leading to more disruptive issues

Studies have also shown that workers suffering from ill-health are more likely to incur a job-related injury. Those in professions where accidents are more common, such as construction and forestry, are more likely to experience an injury at work if they do not have paid sick leave in place. There are also productivity benefits associated with offering paid sick leave, with one study suggesting the loss of productivity from sick workers costs at least as much as offering medical care in the first instance.

For a long time, America has been focused on reducing the cost of care to patients, but these compelling reasons show it’s now time to bring the US in line with other industrialised and make the provision of paid sick leave mandatory.

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