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News from EPI Law requiring paid sick days would not significantly raise costs for New York City employers

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For Immediate Release: Tuesday, October 16, 2012
Contact: Phoebe Silag or Donte Donald, news@epi.org 202-775-8810

Law requiring paid sick days would not significantly raise costs for New York City employers

The potential costs to employers of legislation that would require them to provide paid sick days to their employees are extremely small relative to the total sales of businesses in New York City, a new Economic Policy Institute (EPI) paper finds.  Furthermore, employers that provide paid sick days could benefit financially, largely due to reduced employee turnover. In Paid Sick Days: Measuring the small cost for New York City businesses, EPI researchers Elise Gould and Douglas Hall examine model legislation that would provide five paid sick days to both hourly and salaried employees.

Key findings of the report include:

  • If all employees used all five paid sick days, the cost to an employer that currently provides no paid sick days ranges by sector from between 0.12 percent to 0.92 percent of sales.
  • Among workers who currently have access to exactly five paid sick days, the number of days taken across industrial sectors ranges from 1.5 to 3.0 days. If employees used the average number of paid sick days for each sector, the total cost would range from 0.06 percent to 0.54 percent of sales.
  • For the many New York City employers already providing five or more paid sick days, there would be no additional cost.
  • Because many employers already provide five or more paid sick days, legislating paid sick days would level the playing field within New York City.

“If all businesses are required to provide paid sick leave to their employees, then all businesses will have to weigh the same choices on prices, wages and other forms of compensation,” Hall said. “A paid sick leave law would level the playing field for New York City’s businesses.”

Because the costs of a law requiring the provision of paid sick days would be small, compliance could be achieved through very modest adjustments to other areas of compensation or to prices, without reducing employment in New York City.

“The benefits of paid sick leave—healthier, more productive employees throughout the city—will outweigh the small costs that some businesses will have to absorb,” Gould said.

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