The Cost of Mandatory Paid Sick Leave in Illinois
NFIB study shows impact of The Healthy Workplace Act (HB 3665) on Illinois employers, workers, and economy.
HB 3665, also known as the Healthy Workplace Act, would establish a minimum time-off standard for paid sick leave by requiring Illinois employers to provide employees with up to seven sick days with pay during each 12-month period. Paid sick days would have to be provided to employees to care for their own or a family member’s physical or mental illness, injury, medical condition, professional medical diagnosis, or care, or to attend a medical appointment for either themselves or family members. This mandate would impose new costs on IL employers that would lead to reduced profitability, lost sales and production, and lost jobs.
This study by NFIB aims to forecast the consequences this legislation would have on IL businesses by firm-size category. Inputs in this study consist of new employer costs generated by the mandate described in HB 3665 and new spending on healthcare-related goods and services due to an increase in paid sick leave taken by employees. Passage and implementation of HB 3665 is assumed to occur in 2010. Economic forecasts were generated for years 2010 through 2015.
Other highlights of the study include:
- The results suggest that if HB 3665 passes, over 33,000 IL jobs could be lost and IL real GDP could decrease by over $5 billion by 2015. Small firms would bear the majority of job and output losses.
- Between 2010 and 2015, over $20 billion in real output is expected to be lost as a consequence of the paid sick leave mandate.
- Under one of the economic scenarios, the estimated total cost to IL employers in 2010 due to HB 3665 is $2,400,314,971
- HB 3665 stipulates that the Illinois Department of Labor shall have the power to adopt rules necessary to administer and enforce the Healthy Workplace Act, resulting in new government costs.
- Mid-size firms, with 20 to 99 employees, will be impacted the most. For example, according to the results, firms with 20 to 99 employees are forecast to lose 1,114 jobs in 2010, assuming the mandate goes into effect this year. By 2015, there will be 7,246 fewer jobs at firms currently with 20 to 99 employees due to the paid sick leave mandate than there would have been had HB 3665 not been implemented.