Give Small Business Owners an Even Break, Pass a Minimum Standard for Paid Sick Leave

April 7, 2016

I regularly speak with small business owners across the country on a variety of policy issues that impact them, from taxes to trade policies to job quality issues. Through these conversations, I've seen the public debate about earned paid sick leave evolve.

A few years ago, there was a significant nervousness in the business community about a requirement that employers provide earned sick leave as a basic standard. As more of these policies are passed and implemented in cities and states around the country, I've seen business owners who were once nervous become strong supporters of these policies, willing to talk with other business owners about how earned paid sick leave makes good business sense for small and large companies, their employees, and the communities they serve.

The business case for providing earned sick time is evident. Earned sick time reduces "presenteeism," when employees physically report to work, but the limitation of their injury or illness slows their productivity and harms their ability to focus. "Presenteeism" has a similar impact on businesses as absenteeism but it is harder to measure.

When employees take the time to recover from illness or attend to the needs of their families, productivity increases. Workers perform at their best when feeling healthy, focused, and not struggling with their illness, or worried about children and family members who need care. Providing earned sick leave also reduces employee turnover costs -- a significant benefit for small business owners who must invest significantly in the training and development of their employees.

Paid sick leave is also cost-effective for business owners and the local economies that pass these laws. In Connecticut, Washington D.C., Seattle, and New Jersey, jurisdictions that have passed earned sick leave legislation or ordinances, studies have shown no negative impact on the economy or significant increase in business costs.

The Center for Economic and Policy Research examined the experiences of Connecticut businesses a year and a half after the state became the first in the country to pass paid sick leave legislation. Most employers reported the law had a modest impact or no impact on their costs or business operations, and they typically found that the administrative burden was minimal. Additionally, more than three-quarters of surveyed employers expressed support for the earned paid sick leave law.

In D.C., a 2013 audit of the Accrued Sick and Safe Leave Act found that the act the Act neither discouraged business owners from locating in the District nor encouraged business owners to move their businesses from the District.

Despite the favorable analysis, a high percentage of our nation's workforce still lack the ability take time off to recover from illness without lost income. A survey of 1000 small businesses for our report, "Voices of Main Street," found just 44 percent of those responding had policies on the books. Nationally representative, scientific surveys paint a grimmer picture. A 2013 National Health Interview Survey found that just 38 percent of employers with 1 to 9 staff members provided access to paid sick days.

Small business owners recognize the problem, though. The 2015 MSA report found that 65 percent of respondents support a national standard for paid sick days. They support earned sick time because they want to do right by their employees and because it makes smart business sense.

However, for many small businesses -- especially those who operate on razor-thin margins -- they can only afford to offer it if their competition does as well. A minimum standard, which levels the playing field, is essential for small businesses to compete in crowded markets.

That's why business owners from Burlington to Seattle are asking their legislators to ink a policy that provides them with a roadmap, helping them navigate the ins and outs of the system. In Vermont alone, over 250 small business owners joined the campaign to support their state-wide standard for paid sick days and dozens testified during hearings in Montpelier in the months and weeks leading up to the vote. The standard passed the House and Senate and was signed into law by Governor Shumlin in March.

Small business owners are asking for our government's help on this issue. I know this because I talk to them every day. They want to ensure that all companies offer earned sick time, and they support passing legislation, like the Healthy Families Act, which sets the standard and provides an even break for businesses large and small.

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