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Curing a Bad Sick-Leave Policy

Spectator sports can be hazardous to your health. At least, they can be when the government requires paid sick leave.

Short-term sick leave use among Swedish men rose 55 percent during the 2002 World Cup soccer finals. In Sweden the government provides generous sick-leave benefits. So generous that at any given moment, one in 10 Swedish workers collects them. Most of these “sick” workers tell pollsters they’re perfectly healthy — they just wanted a paid break from work.

Now Sen. Ted Kennedy, D-Mass., wants the government to require American companies to provide paid sick leave. More than four out of every five employers voluntarily provide paid sick leave or other forms of paid time off, but Sen. Kennedy wants to make this widespread practice mandatory. He has introduced legislation requiring all firms employing 15 or more workers to allow seven days of paid sick leave a year and preventing them from disciplining workers for taking those days off work.

On the surface, it sounds like a good idea. No one wants to suffer financially because they’re ill, and workers who come in sick risk infecting others. But requiring companies to provide paid sick leave will not improve workers’ finances.

Congress can require companies to provide specific benefits, like paid sick leave. But this doesn’t increase what companies pay their workers. Employers care about the total compensation they pay — not the breakdown between wages and benefits.

Companies would respond to the additional paid sick-leave costs the same way they have responded every other time the government required them to provide a specific benefit — by cutting wages or reducing other benefits. Sen. Kennedy’s bill would force workers to take a pay cut to fund more paid vacation days, rather than letting workers choose how to trade off income and time off work themselves.

Human nature being what it is, Sen. Kennedy’s bill would invite abuse. It would not allow companies to challenge medical certifications, or to discipline employees for feigning illness. Experience with the Family and Medical Leave Act (FMLA), which requires unpaid sick leave, suggests that many employees would use the law to justify skipping work with little or no notice.

Many irresponsible workers have claimed they needed FMLA leave to avoid punishment for repeated tardiness. Others have a convenient pattern of falling sick on Mondays and Fridays. Still more workers use “sick” leave to avoid working undesirable shifts, or when their vacation requests were denied. One Verizon employee claimed he had back pain, then took his family to Disney World. If Congress required companies to provide paid leave, these abuses would multiply.

The losers would be co-workers and customers. Most companies cannot find replacement workers on short notice, so they must reassign absent employees' work to co-workers. This penalizes workers who show up for work each day.

In some cases, employers simply cannot transfer the work to other employees. The job gets left undone, to the detriment of customers. In just one month, one Verizon office left 8,900 customer calls unanswered because of suspicious FMLA leave. Several school-bus drivers in Fairfax County Public Schools use leave to avoid coming to work on time. When this happens, parents must either drive their children to school before work, or the children must wait until another bus driver finishes his run — arriving at school well after class starts.

There are better ways for Congress to help workers than requiring companies to provide paid sick leave. It could reduce the income-tax burden, easing family finances so they can afford to take more time off work when they are ill. Congress could also create tax-advantaged sick-leave savings accounts, much like traditional IRAs, that workers could use to save for days off. That would give workers the choice of how much pay to trade for how much time off, instead of having the government make that choice for them.

Finally, Congress could allow private-sector workers to bank compensatory time — working more than 40 hours in one week, saving those hours and taking them as paid time off when they need it the next week.

These alternatives would make it easier for workers to financially manage an illness without Congress requiring them to take a pay cut. They would not provide an incentive for irresponsible workers to game the system and leave their co-workers holding the bag.

If Congress is going to force companies to provide paid sick leave, however, it should do so immediately — the NBA Championship Series is only a few weeks away.

James Sherk is a policy analyst in the Center for Data Analysis at The Heritage Foundation (http://www.heritage.org).