Cost of a Paid Sick and Safe Time Mandate in Colorado
NFIB study shows the potential economic impact of a paid sick and safe time mandate on Colorado employers, workers, and economy.
Paid sick leave mandates have re-emerged as a topical policy issue for private enterprise following the recent passage of the first statewide paid sick leave employer mandate in Connecticut. While there is legislation pending at the federal level for a nationwide paid sick leave mandate, proposed most recently in a bill sponsored by Massachusetts Senator John F. Kerry, similar mandates continue to be pushed at the state and local level. In Colorado’s case, there is the upcoming referendum on the Denver paid sick and safe time ordinance this fall. Analyzing the Denver ordinance is an interesting exercise in itself, but this report takes a broader view and attempts to quantify the potential impact a similar statewide employer paid sick and safe time mandate might have on Colorado small businesses. This analysis was performed with the assistance of the NFIB Business Size Impact Module (BSIM), which was used to simulate the effects of a statewide mandate modeled after the proposed Denver ordinance.
Highlights of the study include:
- The simulation results suggest that if a statewide paid sick and safe time mandate modeled after the Denver ordinance passes, over 14,000 Colorado jobs could be lost and CO real output could decrease by nearly $2 billion by 2016. Small firms would bear the majority of job losses and roughly half of any lost sales.
- Cumulatively, over $5.8 billion in real output will be lost between 2012 and 2016 if the mandate is enacted.
- The estimated total cost to CO employers in 2012 due to a statewide mandate is $1,125,011,949.
- Mid-size firms, with 20 to 99 employees, will be impacted. For example, according to the results, firms with 20 to 99 employees are forecast to lose 531 jobs in 2012, assuming the mandate goes into effect that year. By 2016, there will be 2,828 fewer jobs at firms currently with 20 to 99 employees due to the paid sick and safe time mandate than there would have been had the mandate not been implemented.
- The results suggest that small businesses will not only shoulder a large portion of future job losses, but they will also bear the brunt of job losses in the initial stages of the mandate. In 2013, 56.2 percent of the employment gap (jobs lost) will be at firms with fewer than 500 employees, while fifty (49.6) percent of the employment gap will be at firms with fewer than 100 employees. Twenty-eight percent of the job losses will occur at firms with fewer than twenty employees. These percentages decrease slightly over time as large firms gradually feel the full impact of the mandate. Still, by 2016, over fifty-five percent of job losses will be at small firms (< 500 employees).