Making paid sick leave mandatory actually leads to fewer accidents and safety issues at work.
March 19, 2026
Original Paper
Enhancing Workplace Compliance: The Role of Paid Sick Leave (PSL) Mandates
SSRN · 6301640
The Takeaway
Paid sick leave is usually viewed as a personal benefit, but it actually functions as a firm-wide safety system. By keeping ill employees at home, companies see a sharp drop in overall accidents and regulatory fines, suggesting health benefits are a form of 'ex-ante' safety enforcement.
From the abstract
This paper examines the impact of paid sick leave (PSL) mandates on workplace safety compliance. Using firm-level variation in PSL exposure, we show that mandated PSL significantly reduces workplace safety violations and associated penalties. These effects remain robust to placebo tests using non-safety-related violations and to the exclusion of firms that voluntarily offered PSL prior to mandate adoption. We further demonstrate that PSL operates primarily through a health-related mechanism: its