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Proposed Paid Sick Leave Bill Would Have Minimal Impact on Employers, New Study Says

Measure Awaiting Action By State Senate

By JANICE PODSADA

April 01, 2011

Connecticut's proposed bill on paid sick leave would have a minimal impact on business as a share of company sales, costing the average employer that doesn't now offer the benefit less than two-tenths of a percentage point of total sales, according to a new report by the Economic Policy Institute, a labor-backed, left-leaning group.

"This is the first time someone has looked at paid sick leave in terms of the percentage of actual sales," said Douglas Hall, who co-authored the institute's study with Elise Gould.

The bill, which has cleared the labor committee and is awaiting further action by the Senate, would require businesses with 50 or more employees to provide paid sick leave. Workers would accrue paid sick leave after three months on the job at the rate of one hour of paid sick leave for every 40 hours worked.

Using census data from 14 industry sectors, including construction, manufacturing, retail trade and food services, the study found that, on average, 21 percent of total sales is used for payroll.

The group determined the cost of implementing the benefit at less than two-tenths of a percentage point of a firm's total sales, based on a worker taking about 2 1/2 sick days per year.

"We recognize that there is variation by sector," Hall said Friday. "But my sense is the economic doomsday reaction we are getting from some sectors is overstated or completely ungrounded."

But the Connecticut Business and Industry Association, which is leading the effort against the bill, said the study is flawed.

"You can have a study say anything you want it to say," said Kia Murrell, associate counsel at CBIA.

The study did not survey actual companies, Murrell said. When New York City considered a similar bill, local chambers of commerce commissioned a study.

"They went to the actual businesses," Murrell said, "and found that implementing paid sick leave would result in a $789 million hit to the local economy. That pretty much stopped the debate."

About 553,000 workers, or 39 percent of Connecticut's private-sector workers, lack paid sick time. The bill's passage would benefit about 257,000 of those workers.

The bill passed in the full state Senate in 2008 and in the House in 2009, but did not come to floor votes last year, when then-Gov. M. Jodi Rell said she would veto it. Gov. Dannel P. Malloy has said he supports the bill. Connecticut would be first state in the nation to have this legislation.