Retail workers have a new ally in their fight for paid sick leave

Retail workers have a new ally in their fight for paid sick leave
Image: Reuters
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Activist investors are ramping up the pressure on big retailers to pay employees who are out sick. So far, they’ve filed shareholder proposals against CVS, Kroger, Target, and TJX, the owner of TJMaxx and Marshalls, demanding that these companies ensure their employees—including part-time staff—can accrue paid sick leave.  

The latest surge of covid-19 in the US, which has resulted in record numbers of people calling in sick, is again underscoring how vulnerable frontline retail workers are. While the federal government stepped in at the beginning of the pandemic to guarantee pay to workers sidelined by the virus, those protections have long since expired, even as the risks of the pandemic have not.

The shareholders argue a lack of paid sick leave is bad for workers and public health—as well as for companies’ bottomline and reputation. Worker conditions are top concern for Americans, ranking higher than climate change or other socially responsible causes, polling shows.

The Interfaith Center on Corporate Responsibility (ICCR), which represents 150 institutional investors that control $3.6 trillion in assets and is coordinating the effort, also sent a letter (pdf) to 40 major companies including Costco, Bath & Body Works, Nordstrom, Ulta, Home Depot, Macy’s, petitioning they adopt a paid leave policy.

Who has paid sick days?

Currently in the US, there are no federal legal requirements for paid sick leave and only 16 states mandate it. The lack of pay disproportionately impacts the poor. While nearly all high wage workers have access to paid sick days, two-thirds of low-wage workers go without, according to the Economic Policy Institute.

People of color bear the brunt, too. Forty-eight percent of Latinx workers and 36% of Black workers report having no paid time away from work of any kind.

The US is the only wealthy country that doesn’t mandate paid sick days.

Push back from retailers

The reception from retailers has been cool thus far. CVS, for example, has asked the US Securities and Exchange Commission (pdf) to throw out the investors’ proposal, saying the company’s day-to-day operations should not be subject to shareholder oversight.

However, the ICCR argues that companies would benefit from adopting such policies. Research shows granting paid sick leave helps increase productivity and reduces turnover, which is particularly high in retail. The ICCR estimates that paying workers who are out sick costs companies very little, an average of 2.7 cents per hour of paid work.