How offering employees paid sick leave can pay off for businesses

·7 min read
How offering employees paid sick leave can pay off for businesses
Riverside Natural Foods is one of several companies that say it pays off to offer employees paid sick leave. Based in the Toronto area, the company increased its paid sick leave to let workers  A worker at one of Riverside Natural Foods Toronto area production facilities.   (Evan Mitsui/CBC News - image credit)
Riverside Natural Foods is one of several companies that say it pays off to offer employees paid sick leave. Based in the Toronto area, the company increased its paid sick leave to let workers A worker at one of Riverside Natural Foods Toronto area production facilities. (Evan Mitsui/CBC News - image credit)

With pleas to provide paid sick leave for essential workers growing louder in several parts of the country, some companies that already do so say it's not just good for protecting health — it's good for the books.

"So the outcome is that it has actually paid off for us," said Nima Fotovat, the president of Ontario-based Riverside Natural Foods, which makes healthy snack foods, including the brand MadeGood.

The company, located in Vaughan just north of Toronto, has remained open throughout the pandemic, despite having some COVID-19 cases. It provides up to 14 days paid sick leave for its staff of 500, most of whom work in production, packaging and shipping for an hourly wage.

Doctors and nurses, public health officials, mayors, unions, economists and business organizations have all expressed support for paid sick leave to make sure workers stay home if they are sick, and to help reduce workplace transmission of COVID-19.

Yukon created a paid sick leave program to battle the pandemic more than a year ago, and the idea is under consideration in B.C.

This week — under pressure to control workplace transmission in COVID-19 hotspots in and around Toronto — Ontario announced it would fund a temporary paid leave program to cover three sick days.

The province also offered to double Ottawa's Canada Recovery Sickness Benefit (CRSB) from $500 to $1000 per week.

The CRSB covers those without paid sick benefits from work, but has been criticized as hard to access and insufficient.

A 2020 study by the University of British Columbia found that 58 per cent of Canadian workers reported not having sick leave from their employer.

Nearly 75 per cent of workers making less than $25,000 don't have paid sick leave.

Progressive policy expanded for pandemic

Riverside Natural Foods already had a paid sick leave program offering workers four days off per year prior to the pandemic.

The company is a Certified B Corporation, which means it's been audited by a nonprofit organization that has determined it cares for its workers, customers, community and environment.

The company extended its sick leave during COVID-19 to make sure workers would not be afraid to speak up if they had symptoms or were exposed to someone infected by the virus, said Fotovat.

"We don't want the thought of losing pay to be a deterrent in communicating to us any relevant information around COVID," he said.

Even though some workers contracted the virus in the community, an outbreak on the production line was prevented by a combination of rapid tests, safety measures and the sick leave that let them stay home, he said.

Fotovat says not only has the policy helped protect his workers, it helped protect revenue by avoiding any expensive shutdowns.

"We haven't missed customer orders," he said. "We've been able to stay operational throughout the whole pandemic."

Paid sick leave can create loyalty

About a 30-minute drive east from Riverside, at Neal Brothers Foods in Richmond Hill, Ont., shipping specialist and forklift operator Alberto Tamayo is back at work after taking two weeks off because of a positive COVID-19 test result.

Alberto Tamayo is a forklift operator at Neal Brothers Foods in Richmond Hill, Ont.  He recently returned to work after getting paid leave for two weeks to self isolate after a positive COVID-19 test.
Alberto Tamayo is a forklift operator at Neal Brothers Foods in Richmond Hill, Ont. He recently returned to work after getting paid leave for two weeks to self isolate after a positive COVID-19 test. (Evan Mitsui/CBC News)

Just two days after receiving his first shot of the AstraZeneca vaccine, Tamayo learned he had been exposed to the virus by a friend.

Though he felt fine, Tamayo went for a test, then called his manager at Neal Brothers, a specialty chips and salsa company.

He said the Neal Brothers paid sick leave policy made him feel safe to do that, and to think about his co-workers' safety.

"They are affected also, because of me, so I need to isolate myself," he said.

Co-founder Chris Neal says the company changed its paid sick leave policy to five days off from two at the start of the pandemic.

But he says Neal Brothers's practice goes beyond their policy.

Citing past examples where they have provided extended sick leave for workers after serious surgery, cancer treatment and other ailments, Neal said they'll cover whatever is required for any of their 60 employees to self isolate or recover from COVID-19.

Chris Neal of Neal Brothers Foods says that providing paid sick leave is the right thing to do, but also practical because the costs of the program are partly offset by reducing turnover and spending less on training for new hires.
Chris Neal of Neal Brothers Foods says that providing paid sick leave is the right thing to do, but also practical because the costs of the program are partly offset by reducing turnover and spending less on training for new hires. (Evan Mitsui/CBC News)

"The guys that pick our orders every day are as important as the people out there selling or as important as the people collecting the money" said Neal.

While he believes providing paid sick leave is the right thing to do, Neal said it's also practical.

The costs of sick leave are partly offset by spending less on training for new hires.

"We have very little turnover here and there's a savings to that," he said.

Tamayo wants to stay at Neal Brothers, in part because he believes his bosses have his back.

"I trust them and they trust us," he said.

Pandemic sick leave new at Indigo too

It's not an essential workplace but Indigo Books & Music Inc., has created a paid sick leave policy for the pandemic.

Though not an essential workplace Indigo is giving all employees who test positive for the coronavirus paid leave to isolate for 14 days.
Though not an essential workplace Indigo is giving all employees who test positive for the coronavirus paid leave to isolate for 14 days. (Ryan Remiorz/Canadian Press)

The publicly traded company — which owns more than 180 stores across Canada and employs 6,000 people — says it provides paid leave for any employee, including seasonal and part-time workers, awaiting COVID-19 test results, or self-isolating due to potential exposure for up to 14 days.

It also says it will give paid leave to workers sick with the virus.

Madeleine Löwenborg-Frick, Indigo's Director of Corporate Communications, said in an email response to CBC questions that the move to paid sick leave "was driven from listening to our teams."

Löwenborg-Frick said the company did not want to put anyone in the position of coming to work if they felt sick, and that last year it created a permanent paid sick leave program for part-time workers, a benefit previously only given to full-time staff.

So far, the company has not had any cases of COVID-19 transmission at its distribution centres, retail locations or head office.

Rick Robertson, Professor Emeritus in managerial accounting and lecturer at the Ivey Business School of Western University, said while sick leave programs can be abused, in the long run they're good for companies.

He also says in a pandemic the financial case for sick leave is especially strong.

"The sooner we can reduce the negative impact of COVID, I won't say every company benefits, but the vast majority of companies will, in fact, benefit."

Making paid sick leave the law

Iglika Ivanova, Senior Economist at the Canadian Centre for Policy Alternatives studies issues like poverty and precarious work.

She's been following the issue of paid sick leave closely and is happy to see companies provide it, especially for low wage workers in essential sectors.

Iglika Ivanova is a Senior Economist with the Canadian Centre for Policy Alternatives (CCPA).  She says employment standard laws should be used to make companies provide paid sick leave, just like they must pay a minimum wage and provide vacation.
Iglika Ivanova is a Senior Economist with the Canadian Centre for Policy Alternatives (CCPA). She says employment standard laws should be used to make companies provide paid sick leave, just like they must pay a minimum wage and provide vacation. (Canadian Centre for Policy Alternatives)

However, Ivanova says not enough companies do so.

She thinks every province and territory should use employment standard laws to make companies provide paid sick leave "the same way we make minimum wage and we make vacation required."

Though she says Ottawa's CRSB program is not effective at getting money to workers of the job because of COVID-19, Ivanova says the government has an obligation to help fund paid sick leave for companies that can't afford it.

She says it's not fair to ask low wage workers, many of whom are women and from racialized groups, to stay home without pay in order to help stop the coronavirus from spreading.

"We're talking about an equity issue here," she said "I just think it's not right."

With files from Dianne Buckner and Marc Baby.