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Boosting Your Bottom LineEarned Sick Days Policies are Good for Business

2013

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Overview

• What are earned sick days?

• Benefits of earned sick days for businesses

• Business experiences: The Evidence from San Francisco

• Getting down to Business

• Get involved

Note to advocates: Feel free to remove CLASP’s template and logo and insert your own! Pick and choose elements of the presentation that are relevant to your work. Don’t forget to insert your organization’s name and contact info at the end of the presentation. For questions or assistance with your business outreach strategy, contact Liz Ben-Ishai, lbenishai@clasp.org.

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What Are Earned Sick Days?

• Earned sick days allow workers to acquire paid time off for use when they are sick, need to care for sick family members, or need to see the doctor.

• When workers have earned sick days, they are able to recover from illness or care for loved ones without fear of job loss or lost wages.

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Benefits to Business

• Businesses are increasingly realizing that providing workers with earned sick days is not only the right thing to do, but the profitable thing to do.

“We’ve experienced since 2007 double digit growth through some of the worst economic times in this country, and I really

feel that a lot of it is a result of a happy staff, and a happy staff creates a happy guest, and a happy guest comes back.”

– Sam Mogannam, Owner,

Bi-Rite Market, San Francisco, CA

Note to advocates: If possible, replace with a quote from a local business here. Whenever possible, do the same throughout the presentation where you see quotes from business owners.

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Benefits to BusinessWorkforce Stability

• Employers that provide earned sick days see lower levels of turnover.1

• A recent review of studies on turnover costs found the typical cost of turnover to be about 21% of an employee’s annual salary.2 Other reports cite turnover costs ranging up to 200 percent of employees’ annual salaries.3

1 Cooper and Monheit. “Does Employment Related Health Insurance Inhibit Job Mobility?” 28-44.

2 Boushey and Glynn. There are Significant Business Costs to Replacing Employees.

3 Sasha Corporation. “Compilation of Turnover Cost Studies.”

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Benefits to BusinessWorkforce Stability

If we want to engage our employees and make this a great place to work…that means we have to worry about their

whole life, about their family, about their health…so this is really part of having long term employees. I think having turnover would be far more expensive than having an

employee be sick a few days a year.

– Vincent Siciliano, President and CEO

New Resource Bank, San Francisco, CA

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Benefits to BusinessProductivity

• Sick workers are unproductive workers.

• One study estimates that the cost to the economy of lost productivity due to workers’ or their families’ health-related issues amounts to $250 billion annually. Of this cost, 71 percent – close to $180 billion – was a result of lost productivity at work.4

4 Levin-Epstein. “Presenteeism and Paid Sick Days.”; Stewart et. al. “Lost Productive Work Time Costs From Health Conditions in the United States: Results From the American Productivity Audit.”

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• Coming to work sick puts both customers and workers’ colleagues at risk – effects that reduce customer satisfaction, worker productivity, and harm the public health.

• One study found that during the H1N1 outbreak in 2009, lack of access to workplace policies like paid sick leave may have fueled an addition 5 million cases of influenza-like illness.5

5 Kumar et al. “The Impact of Workplace Policies and Other Social Factors on Self-Reported Influenza-Like Illness Incidence During the 2009 H1N1 Pandemic.”

Benefits to BusinessIllness Prevention

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Benefits to BusinessIllness Prevention

“The children in our care are the top priority for my business, so it doesn't make sense to have one of our

employees working while sick. When members of my staff aren't feeling well, they can't give the children their full attention. Furthermore, coughs and colds can spread

quickly among children, and I don't want to be responsible for sickening a child who started the day

healthy.”

– Dewetta Logan, Owner

Smart Beginnings Early Learning Center, West Philadelphia6

6 Logan, “This boss doesn’t mind sick days.”

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Benefits to BusinessWorker Safety

• Workers with earned sick leave are 28 percent less likely that those without it to be injured on the job.6

• The economic costs of workplace injuries among lower-wage workers – those who are least likely to have earned sick days – was more than $39 billion in 2010.7

“It could be a safety factor. We don’t want someone driving a truck that’s not feeling well, especially if they may be taking some kind of medication. Even

over-the-counter medication can affect your ability to coordinate yourself, much less drive a truck.”

– David Hedgepath, Owner

Hill Country Transportation Resources, Dallas, TX

7 Asfaw et al. “Paid Sick Leave and Nonfatal Occupational Injuries.”

8 Leigh. “Numbers and Costs of Occupational Injury and Illness in Low-Wage Occupation.”

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Benefits to BusinessWorker are Consumers

• When sick workers lose pay because they must take unpaid time off work or, worse yet, lose their jobs, many can’t afford to purchase goods and services in their communities. As a result, the businesses that rely on these consumers suffer.

• For families with two working parents earning $10/hr, if one parent needs to take 1.4 unpaid sick days, the family exhausts the entire monthly clothing budget. If s/he needs to take 3.5 unpaid sick days, the cost is equivalent to the monthly household grocery budget.9

9 Gould et al. The Need for Paid Sick Days.

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The Evidence from San Francisco

• In 2007, San Francisco became the first city in the U.S. to pass an earned sick leave law, the Paid Sick Leave Ordinance (PSLO).

• Implementation not difficult: The majority of San Francisco employers said that understanding and administering the ordinance was “not too difficult” or “not difficult.”

• No effect on profitability: The majority of employers found the PLSO had no effect on profitability or improved profitability.10

10 Drago and Lovell. San Francisco's Paid Sick Leave Ordinance.

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The Evidence from San Francisco

• Employers are supportive: most employers – two out of three firms - supported the PSLO.

• Employment growth stayed high: following the introduction of earned sick days, San Francisco continued to experience stronger job growth than that of surrounding counties.11

11 Miller and Towne. San Francisco Employment Growth Remains Stronger with Paid Sick Days Law Than Surrounding Counties.

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Earned Sick Days are Coming:Public Opinion Polling

• Recent polling shows that, across the political spectrum, the public favors earned sick days laws.

• Most American’s (69%) believe that earned sick days are a “very important” standard for government to set to protect workers’ rights.

• Support for sick days crosses party lines. Majorities of both Democrats and Republicans agree on importance of earned sick days standards. Support is also strong across other demographic categories, including race and gender. 12

12 Smith and Kim. “Paid Sick Days: Attitudes and Experiences.”

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Earned Sick Days are Coming:Existing Laws and Campaigns

• Earned sick days laws have been passed in San Francisco, the District of Columbia, Seattle, Long Beach, and Connecticut.

• In 2012, campaigns for earned sick days or legislation existed in Arizona, California, Colorado, Hawaii, Illinois, Iowa, Maine, Massachusetts, Miami, Michigan, Minnesota, New Jersey, New York City, New York, North Carolina, Orange County (FL), Pennsylvania, Philadelphia, Portland (OR), Vermont, Washington, and Wisconsin. 13

• Your city or state may be next!

13 National Partnership for Women and Families. “State and Local Action on Paid Sick Days.”

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Getting Down to Business:Implementation

• Once you decided to implement an earned sick days policy and/or an earned sick days law passes in your area, you will need to consider: What to put in to a written policy Methods of accrual Methods of tracking accrual Education and outreach – let your employees know

what your policies are

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Getting Down to Business:Abuse Not a Problem

• Both anecdotal evidence from business owners and studies of workers with earned sick days suggest that few workers abuse this benefit.

• In San Francisco, 25 percent of employees did not use any sick time. The median worker used three days per year. Nationally, covered workers use on average between 2.2 and 3.1 days per year.14

• In the District of Columbia:“What we found is that [over] the last two years that we’ve had the sick leave policy here…only about eight percent of employees use it…which is a very insignificant amount really. And, they don’t abuse it… The fact of the matter is, the overwhelming majority of people do not abuse it.”

– Andy Shallal, Owner Busboys and Poets Restaurants, Washington, DC

14 Drago and Lovell. San Francisco's Paid Sick Leave Ordinance.

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Get Involved

• Business voices are crucial to shaping and passing earned sick days legislation.

• By getting involved, you can participate in decision making processes about: Quantity of sick days/rates of accrual, Record keeping requirements, Who coverage extends to…and more.

• Help explain the business benefits of earned sick days to fellow business people.

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References

Asfaw, Abay, Regina Pana-Cryan, and Roger Rosa. "Paid Sick Leave and Nonfatal Occupational Injuries." American Journal of Public Health, 102, no. 9 (2012): 59-64.

Boushey, Heather and Sarah Jane Glynn. There are Significant Business Costs to Replacing Employees. Center for American Progress, 2012, http://www.americanprogress.org/wp-content/uploads/2012/11/CostofTurnover.pdf

Cooper, Philip F. and Alan C. Monheit. “Does Employment Related Health Insurance Inhibit Job Mobility?” Inquiry, 30, no. 4 (1993): 400-416.

Drago, Bob and Vicki Lovell. San Francisco's Paid Sick Leave Ordinance. Institute for Women’s Policy Research, 2011. http://www.iwpr.org/publications/pubs/San-Fran-PSD/at_download/file

Gould, Elise, Kai Fillion, and Andrew Green. The need for paid sick days: The lack of a federal policy further erodes family economic security. Economic Policy Institute, 2011, http://w3.epi-data.org/temp2011/BriefingPaper319-2.pdf

Kumar, Supriya, et al. "The Impact of Workplace Policies and Other Social Factors on Self-Reported Influenza-Like Illness Incidence During the 2009 H1N1 Pandemic." Journal Information, 102, no. 1 (2012). http://www.cdc.gov/phpr/documents/science/AJPH_2011_300307v1.pdf

Leigh, J. Paul. “Numbers and Costs of Occupational Injury and Illness in Low-Wage Occupations.” Center for Poverty Research and Center for Health Care Policy and Research, University of California Davis, 2012, http://defendingscience.org/sites/default/files/Leigh_Low-wage_Workforce.pdf.

Levin-Epstein, Jodie. Presenteeism and Paid Sick Days. Center for Law and Social Policy, 2005, http://www.clasp.org/admin/site/publications/files/0212.pdf

Logan, Dewetta. “This boss doesn’t mind sick days.” The Philadelphia Inquirer. March 24, 2011. http://articles.philly.com/2011-03-24/news/29181903_1_sick-days-sick-children-child-care-providers

Meyer, Christine Siegwarth et al. “Work-Family Benefits: Which Ones Maximize Profits?” Journal of Managerial Issues, 13, no. 1 (2001): 28-44.

Miller, Kevin and Sarah Towne. San Francisco Employment Growth Remains Stronger with Paid Sick Days Law Than Surrounding Counties. Institute for Women’s Policy Research, 2011. http://www.iwpr.org/publications/pubs/san-francisco-employment-growth-remains-stronger-with-paid-sick-days-law-than-surrounding-counties/at_download/file

National Partnership for Women and Families. ““State and Local Action on Paid Sick Days.” 2012. http://www.nationalpartnership.org/site/DocServer/PSD_Tracking_Doc_Nov_2011_Final.pdf?docID=1922

Sasha Corporation. “Compilation of Turnover Cost Studies.” http://www.sashacorp.com/turnframe.html

Smith, Tom W., and Jibum Kim. "Paid Sick Days: Attitudes and Experiences." NORC/University of Chicago (2010).

Stewart, Walter F., et al. "Lost productive work time costs from health conditions in the United States: results from the American Productivity Audit." Journal of Occupational and Environmental Medicine, 45, no. 12 (2003): 1234-1246.

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Thank you

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