Sunday, March 14, 2010

Sick Leave vs Comprehensive Leave

I briefly touched on this recently over at S&G, and unfortunately it's still been on my mind this weekend. So I figured now is as good a time as any to write about sick leave.

I'm going to make some generalizations about workplace policies, even though every office is different and there are many policies I've never heard of. But the generalizations will enable us to do some analysis.

Traditionally, workers have been offered time off from two main buckets: sick leave and vacation leave. Sick leave usually expires after a certain amount of time. When a worker leaves his job, he is paid for any unused vacation time but not for unused sick time.

Many employers are beginning to offer comprehensive leave, where sick days and vacation days count the same. Upon leaving their jobs, employees are paid out for any excess comp leave they have accumulated.

Employers want workers to be at work as much as possible but not when they are truly sick, as they can infect the rest of the office. When employees take time off when they're not sick, employers would prefer advanced notice. Employers want employee absences to be spread out, as many offices would be crippled if half of the workers were absent on any given day.

Most workers prefer to have as many paid days off as possible. They'd also prefer to be able to get days off on short notice.

Under sick leave plans, workers have an incentive to take sick leave not only when they are sick, but also for a slew of other reasons. Thirty-five percent of sick days are taken on Mondays, and I have to believe that many of those are by people who want to extend their weekends. The presence of popular sporting events has also been linked to an increase in sick leave requests (at least among men). Because sick time expires and isn't paid out upon employee termination, workers usually use some of it for other reasons besides being sick. They are encouraged not to give their employers advanced notice, even if they've planned their sick days a long time in advance.

Under comprehensive leave plans, workers have an incentive to come to work at all costs, even if means potentially infecting coworkers. A day spent bumming around the house in your pajamas means you have one fewer day available to spend on the beach on vacation. Comprehensive leave workers will be better at giving their employers advanced notice of absences, unless they fear their bosses will deny their leave requests (as the bosses are trying to keep the workforce at critical mass during popular vacation times). Comprehensive leave plans are more expensive, as comp time doesn't expire and must be paid out eventually in some form, whether it be days off or cash.

In theory, rational workers will prefer jobs with more time off to less. Yet I've taken several jobs where I didn't even know the leave policy in advance, and I'm sure many other workers have done the same. Maybe we don't ask about leave policies at job interviews because it would make us look like fickle workers. In any event, it seems that people pick jobs based primarily on salary, the nature of the work, and location.

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