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Paid sick leave cuts: Do employers save money in the long-run?

A new study of employee sick leave, vacation cuts and workplace injuries has found that employers who cut employee benefit packages in order to compensate for short-term savings are really not saving money in the long-run. With an economy that has businesses of all sizes trying to implement cost-cutting measures, Colorado employees have suffered by having their benefits reduced or eliminated. The report details how cutting paid sick leave makes employees more prone to workplace injuries, which also has been substantiated in prior studies.

Almost 40,000 workers from multiple industries were surveyed about their benefit packages and their workplace injuries from 2005 to 2008. The study controlled several variables such as sex, age and rate of pay. The results were statistically significant that workers who received paid sick leave had less workplace injuries. Employees who didn't have sufficient paid sick leave suffered more injuries.

When an employee can't afford lost wages for being out sick, he or she will still go to work. The employee may be less able to concentrate on work tasks, and therefore, may get injured. In high-risk physical jobs, this can be extremely dangerous. In addition, workers who are able to take paid sick leave tend to recuperate more quickly from injuries and illnesses.

As employers are responsible for workplace safety, injuries can be very costly because of liability and workers' compensation claims. Therefore, employers may be looking at substantial long-term costs to realize short-term savings.

Source: Reuters, "Paid Sick Leave Means Fewer Workplace Injuries," Andrew Lu, Aug. 2, 2012

If you have more questions about the program, please see our work injury page.

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