Costly New Sick Leave Mandate Would Hurt Businesses

COMMENTARY Jobs and Labor

Costly New Sick Leave Mandate Would Hurt Businesses

Mar 19th, 2020 1 min read
COMMENTARY BY
Rachel Greszler

Research Fellow in Economics, Budget and Entitlements

Rachel researches and analyzes taxes, Social Security, disability insurance, and pensions to promote economic growth.
It’s small employers and workers who don’t yet have sick leave who could be most hurt by a federal mandate, and who wouldn’t be helped by federally funded sick leave. Martin Dimitrov/Getty Images

Key Takeaways

Government mandates often have unintended consequences.

It’s not the time for big-government politicians to exploit a crisis in the name of political expediency.

A one-size-fits-all mandate can’t provide the flexible and accommodating solutions that appropriately maximize the well-being of workers and employers.

Government mandates often have unintended consequences. Take mandating paid sick leave in response to the coronavirus. Even if it’s temporary, it could further damage businesses harmed by the virus—and hurt the very workers it’s meant to help.

The vast majority—86% of full-time workers—already have access to paid sick leave. The rest primarily work for small employers or are part-time or hourly workers.

Unfortunately, it’s small employers and workers who don’t yet have sick leave who could be most hurt by a federal mandate, and who wouldn’t be helped by federally funded sick leave.

Small businesses that aren’t yet profitable enough to provide paid sick leave are more susceptible to disruption from coronavirus-related revenue losses. A costly new mandate would only add insult to injury.

Say a laundromat with five employees has two out sick for 15 days. Paying the sick workers, paying overtime to other workers and hiring a temporary worker could mean that the business can’t make payroll or pay its bills.

The incentive would be to lay off the sick workers. But losing a job is a lot worse than a missed paycheck.

Government-funded sick leave wouldn’t work, either. Individuals who cannot go days or weeks without a paycheck cannot wait months for government benefits, and employers who can’t afford to provide paid sick leave can’t wait until they file their next tax return to receive a refund.

It makes sense for policymakers to consider ways to protect American families, but it’s not the time for big-government politicians to exploit a crisis in the name of political expediency.

A one-size-fits-all mandate can’t provide the flexible and accommodating solutions that appropriately maximize the well-being of workers and employers. The two go hand in hand.

Alternatively, the Working Families Flexibility Act would provide an entirely optional way for workers to accrue paid time off and for employers to smooth their payroll costs over time.

This piece originally appeared in USA Today