Currently, most workers are provided with paid sick days by their employers voluntarily. Where states and local areas have enacted policies that require employers to provide their employees with paid sick days, most economists anticipate that the direct costs of the wages paid will be borne by workers over time through slightly reduced wage growth. Some employers may also pass the costs along to consumers as higher prices or to shareholders as lower profits.
Research on business impacts of paid sick days laws have found that most employers report no or modest impacts on their costs or business operations and that the administrative burden is minimal.
This Issue Brief explores the distributional impact of three alternative policy models for providing paid sick days taken from actual policies in the states and a federal proposal selected to show a range of generosity of provision.
The Healthy Families Act has been introduced in Congress and proposes requiring larger employers (15 or more employees) to provide up to 7 paid sick days per year; smaller employers are not required to pay workers while they are on sick leave but would be required to allow them to return to work without retaliation.