Paid sick leave pays off in times of crisis

Paid sick leave plays a crucial role especially in times of crises where many workers fear dismissal and discrimination when reporting sick. A new ILO study shows that paid sick leave is not only affordable but pays off in terms of health and economic gains for employers, workers and the economy at large. ILO Online spoke with Xenia Scheil-Adlung, co-author of the study and ILO Health Policy Coordinator.

How does the ILO define paid sick leave?

Xenia Scheil-Adlung: Adopted in 1952, ILO Convention No. 102 sets minimum standards for social security and embodies an internationally accepted definition of the very principle of social security. It states that sickness benefits shall cover incapacity to work resulting from illness and involving suspension of earnings. The Social Protection Floor initiative led by the ILO and WHO not only comprises universal access to essential health care, but also income support for those with insufficient income. The concept was endorsed by the Global Jobs Pact that the International Labour Conference adopted in June 2009. Against this background paid sick leave consists of two components: leave from work due to sickness and cash benefits that replace the wage during the time of sick leave.

What is the current situation at the global level?

Xenia Scheil-Adlung: At the global level, as many as 145 countries provide for paid sick leave. Usually, provisions include both time for leave and wage replacement during sickness. However, the benefit schedules for paid sick leave differ widely among countries. Globally, the replacement rates – that is the ratio of the total resources received when out of work to those received when in employment – vary between lump sums and up to 100 per cent of wages. The majority – more than 50 per cent of countries – provide for replacement rates that vary between 50 and 75 per cent of the wage received before. The period of paid sick leave spans from more than one month (and up to two years) to less than 7 days.

There are significant differences between countries in the number of days lost due to sickness?

Xenia Scheil-Adlung: We find these differences even between neighboring countries that show similar overall health status and comparable social health protection schemes. This is the case in Denmark and Sweden (where 8.3 and 22 days were lost respectively) as well as France and Germany (where 8 and 16.5 days were lost respectively). However, these findings should be interpreted with caution and must not be compared without looking at further variables, including definitions and criteria for inclusion and exclusion of groups of workers in paid sick leave regulation, and national working patterns, particularly annual working days and weekly working hours. What’s more, there are significant differences in trends over time.

Why is it so important to have paid sick leave provisions in times of crisis?

Xenia Scheil-Adlung: Paid sick leave plays a crucial role especially in times of crises where many workers fear dismissal and discrimination when reporting sick. In fact, the absence of paid sick days forces ill workers to decide between caring for their health or losing jobs and income, choosing between deteriorating health and risking to impoverish themselves and often their families. Without social health protection that includes paid sick leave many people working in the formal or informal economy and living in developed or developing countries cannot afford to choose.

How did the global economic and social crisis impact on sick leave provisions?

Xenia Scheil-Adlung: ILO analyses of stimulus packages and policies addressing the crises reveal that cuts of social and health budgets are among the first national responses to recover the costs of bailing out those that have contributed to the crisis. Concerned are social health protection measures that provide access to health services and financial protection in case of sickness and make it a financial hardship for low income-workers to get ill and miss work. Further, reform debates on introducing or extending paid sick leave provisions are hampered.

How does paid sick leave or the lack of it impact on public health and the economy?

Xenia Scheil-Adlung: There are no doubts that gaps in paid sick leave result in severe impacts on public health and the economy. Let me give you a concrete example. Recent studies on swine flu (H1N1) show that in 2009, when the economic crisis and the H1N1 pandemic occurred simultaneously, an alarming number of employees without the possibility of taking paid sick leave days attended work while being sick. This allowed swine flu to spread into the workplace causing infections of some 7 million co-workers in the USA alone. In the same year, the Federal Government of Germany reported the lowest number of sickness absence ever recorded. Fears of losing one’s job, restructuring, downsizing, and financial worries were identified as reasons for the dangerous and costly presence of the sick at work.

How much do countries spend on paid sick leave?

Xenia Scheil-Adlung: The share of paid sick leave expenditure of social protection expenditure varies between 1.7 per cent of expenditure on social protection in Portugal and 9.8 per cent in Norway. We observe that high expenditure on paid sick leave in countries such as Norway is frequently linked to a significantly higher economic productivity. The corresponding gains more than balance out the expenditure on paid sick leave. Expenditure on paid sick leave has also to be assessed in the context of costs of presenteeism – defined as working during sickness. Presenteeism results in costs related to increased risk of work accidents, development of chronic diseases and thus incapacity to work and health impacts on co-workers.

Is paid sick leave it affordable for poor countries?

Xenia Scheil-Adlung: Paid sick leave is affordable. The ILO estimates that a set of minimum guarantees for essential social benefits in kind and in cash is affordable for all countries, although it is likely to require support from external sources in the poorest settings. In low income countries the costs of providing universal basic income support in the form of pensions for disability and old age would range between O.6 and 1.5 per cent of the GDP in countries such as Kenya, Senegal and Tanzania. Cash sickness benefits could constitute a small part thereof. Past and recent history of social protection schemes in developed countries have shown that inclusive growth is a key factor for sustainability both in terms of economic development and social peace.  –ILO Online