Impact of Paid Sick Leave Act on the Restaurant Industry

In New York, roughly 38 percent of private-sector workers are employed by companies that do not provide paid sick leave. The Paid Sick Leave Act, if passed, would require firms with fewer than 10 employees to provide up to 40 hours of paid sick leave annually. For those with more than 10 employees, employers would be required to provide up to 80 hours.

Many independently owned restaurants and bars will be impacted. Small businesses in this industry typically only pay for hours worked, not having any formal paid sick leave policy. Would paid sick leave hurt the restaurant industry?

I like to base my opinions and educated guesses on facts, which sent me exploring some of the statistics surrounding this issue. What actually happened where this was done in the past? This would surely give some insight into what we might expect from the proposed changes in the law. What I learned reassured me that independent eateries and bars were not on the verge of a crisis.

Since 1994, about 200 cities have passed “living wage laws” some including statutorily required paid sick days each year. Studies found no difference in employment levels between comparable cities with and without living wage laws. They disproved the claim that these laws drive away business or lead to unemployment.

Workers with families can be the hardest workers, dedicated to doing a good job because they rely on the income to support their loved ones. However, we all know that there are demands outside the workplace that require attention. This is an inescapable reality. Allowing employees to meet their responsibilities to both work and home will make them happier, more dedicated, and more productive. Costco and Stride Rite, companies that employ low wage workers have supported better overall wages for low skilled workers, finding that it reduces employee turnover and improves workers’ productivity. This is good for the bottom line.

The majority of workers will not abuse the system and will be grateful to have the benefit. 51 weeks of increased productivity is the reward to the employer who pays the employee for one paid week of sick time. You do the math. It seems like good ROI and good for business.