Report: New York City’s paid sick leave law had virtually no negative impact

Despite all the concern about shuttered businesses, fired employees and lost profits, a new report has found that New York City’s paid sick leave law was pretty much a “non-event” for most employers.

Released this month, “No Big Deal: The Impact of New York City’s Paid Sick Law on Employers” reported that in the years following the 2014 implementation of the paid sick leave law, the great majority of businesses surveyed said the law had no effect on overall costs. The report, authored by researchers at the Center for Economic and Policy Research and the Murphy Institute at the City University of New York, is based on telephone surveys of more than 350 random New York City businesses with five or more employees from October 2015 to March 2016. Researchers also conducted on-site interviews with 30 businesses.

New York City’s Earned Sick Time Act covered private-sector companies and nonprofits with five or more workers, giving workers the opportunity to accrue one hour of paid sick leave for every 30 hours worked. Employees at businesses with four or fewer workers are entitled to unpaid sick leave. Report authors Eileen Appelbaum and Ruth Milkman write:

There is no evidence that the earned sick days law has been a “job killer.” On the contrary…job growth continued in New York City in the years following implementation. Moreover, a year and a half after the law went into effect, the vast majority (86 percent) of the employers we surveyed expressed support for the new law. Another example of an employer who had worried about the potential negative effects of the law and then changed his mind is Tony Juliano, former local chamber of commerce official and general manager of XES Lounge. The new law “hasn’t had the kind of impact that I worried about. Not even close,” he declared. Although he had worried about potential job losses before the law was implemented, “I don’t know anybody that has actually had to cut people because of this policy. I also thought there might be abuse. But in our case there was absolutely no abuse.”

Researchers found that nearly 85 percent of survey respondents said the new law had no effect on their overall business costs, with less than 2 percent actually reporting a decline in costs. Among the 14 percent that did say the sick leave law impacted their bottom line, 9 percent reported a cost increase of less than 3 percent, and only 3 percent reported an increase of 3 percent or more. One reason for the limited cost impact was that most employers were able to cover the duties of sick workers. Another reason is that workers used paid sick leave in a fairly limited way — in fact, the survey found that only about three-quarters of workers represented had taken any paid sick leave, while a quarter had taken no paid sick leave in the previous year. Among workers who did use paid sick leave, the average was about four days in an entire year.

Regarding the concern that workers would abuse sick leave — a particularly offensive argument against such ordinances — the New York City survey found that 98 percent of employers reported no such abuse. Less than 1 percent — specifically, 0.3 percent — reported more than three cases of workers abusing sick leave.

On to other potential business impacts, more than 91 percent of employers surveyed reported no reductions in hiring, 97 percent said they didn’t reduce worker hours, and about 94 percent did not raise prices. Less than 3 percent said they reduced operating hours and less than 1 percent reduced the “quality” of their services. More than 94 percent said the law had no effect on productivity — in fact, 2 percent said productivity increased.

In regard to awareness about the new sick leave rights, 18 percent of businesses with five or more workers indicated that they had not “read, heard or seen any information” about the law. That, the report authors wrote, could explain why 13 percent of surveyed businesses reported not providing paid sick days.

“Overall, the new law, which extended paid sick days to a million-and-a-half workers in the city who did not have access to them before, was a ‘non-event’ for most employers,” the report concluded.

Click here to download a full copy of the paid sick leave report.

Kim Krisberg is a freelance public health writer living in Austin, Texas, and has been writing about public health for nearly 15 years.

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