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Paid Sick Leave Is Good for Your Health—And the Health of Your Finances

Written by
Matt Pelkey, CFEI
During his time as the director of education for OppU, Matt Pelkey, CFEI, successfully implemented personal finance courses, scholarship opportunities, and financial literacy resources for students and adults of all ages.
Read time: 4 min
Updated on July 31, 2023
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Are your finances under the weather? Paid sick leave could help.

Covering basic expenses is a common worry for Americans. Seventy-eight percent live paycheck to paycheck, and even those with moderate incomes put little aside for emergencies.

There are many reasons for this, but according to a number of recent studies, one factor in particular can lead to financial strain: paid sick leave, or the lack thereof.

New data from Florida Atlantic University found that workers who don’t get paid sick leave from their employers report higher levels of financial worry. But the problems don’t end there. Failing to provide sick leave causes significant harm to workers, businesses, and the economy. How? Let us count the ways.

People who lack paid sick leave are more likely to live in poverty

According to a study published in Social Work in Healthcare, people who work without paid sick leave have lower incomes. In fact, they are three times more likely to live in poverty than those who have paid sick leave benefits, even when controlling for other factors.

The correlation between paid sick leave and income also impacts workers’ need for welfare services. Workers without paid sick leave benefits were 1.5 times more likely to receive welfare support and 1.4 times more likely to rely on food stamps.

Why is the impact so devastating? The authors contend it’s due to workers foregoing preventative care and incurring increased medical costs while missing income from unpaid sick days.

People who lack paid sick leave delay getting medical help

A study published in Health Affairs found that, regardless of workers’ health and access to insurance, those without paid sick leave benefits were three times more likely to delay seeking medical help or go without it completely. And their families were adversely impacted as well—the study found that families of workers without paid sick leave were twice as likely to wait to see a medical professional. The effects were especially damaging for those with the lowest incomes, who were found to be at a greater risk of going without medical care.

Delaying medical care and showing up to work sick also increases the risk of spreading contagious illnesses. In 2009, during the outbreak of H1N1, it is estimated that 7 million additional people were infected—leading to 1,500 unnecessary deaths, as a result of contagious employees showing up to work.

Lack of sick leave leads to greater psychological distress and financial worry

The effects of a lack of paid sick leave culminate to increase levels of psychological distress for workers. Researchers from Florida Atlantic University and Cleveland State University used the Kessler Psychological Distress Scale (K6) to assess how a lack of paid sick leave was impacting the mental health of population-based samples. The study found that 3.1 percent of respondents who didn’t have paid sick leave benefits were experiencing high levels of psychological distress, compared to only 1.4 percent of respondents who received paid sick leave.

Furthermore, workers without paid sick leave expressed a greater degree of financial worry than those who received the benefit, according to another study by the same authors. Respondents who couldn’t take paid sick days were 1.59 times more likely to express being “very worried” about their monthly bills and 1.55 times more likely to say they were “very worried” about covering housing costs. Those with access to paid sick days were less likely to worry about their finances.

Paid sick leave policies would save money and improve the health of Americans

Eleven states and Washington D.C. have laws in place that require employers to provide paid sick leave for some workers. But only 68 percent of Americans get paid sick leave, and only 31 percent of part-time employees have access to the benefit.

As a result, many people show up to work despite their healthcare concerns, which translates into huge losses for the economy—an estimated $160 billion annually. The cost of lost productivity from employees working while sick exceeds the cost of absenteeism.

Since the studies show that people without these benefits rely more on government aid and develop more costly healthcare issues, policy initiatives to ensure paid sick leave provide a cost-cutting solution in addition to remedying a public health issue. Moreover, businesses in states that have established paid sick leave laws haven’t seen a negative impact and have even experienced growth.

Bottom line

Paid sick leave is a win for both employees and employers. Why not require it, America?

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