Is paid sick leave bad for business? A systematic review

Abstract

Vigorous legislative activity both for and against paid sick leave has occurred over the last decade. Although a compelling body of evidence suggests that paid sick leave supports personal and public health goals, a notable barrier in opposition to paid sick leave is apprehension about the potential short-term and long-term harms to business. This review critically assesses the relationship between paid sick leave and favorable or unfavorable business conditions. Utilizing the Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) guidelines, we systematically review six research databases between 2000 and November 2022. Of 2664 studies identified, 123 were considered potentially relevant and 43 were included in the review. In addition to absence from work, paid sick leave was associated with favorable business conditions such as increased job satisfaction; improved retention; and reductions in occupational injury, contagion, presenteeism, and death; as well as some measures of firm performance and labor market conditions. Overall, our review discovered more evidence supporting the relationship between paid sick leave and favorable business conditions as compared with evidence that supported unfavorable business conditions. Although more research is needed, these findings can be used to inform firm-level and public policy decisions about paid sick leave.