Beyond Borders: Does Firm-Level Exposure to State and Local Paid Sick Leave Mandates Lead to Corporate Policy Adoption?

By many measures, job quality has eroded over the past several decades in the U.S.  As some states and localities have passed legislation to raise the floor on working conditions, a pressing policy question is whether these local policies will diffuse to benefit a broader set of workers.  Prior research has focused on the potential for policy diffusion when state or local policies lay the groundwork for federal policy action. Extending this research, we argue that national firms may play an important and overlooked role in diffusing labor policy if companies voluntarily expand protections mandated for some of their workers to their broader workforce. To test this possibility, we take advantage of new employer-employee linked data from The Shift Project. We find that workers are more likely to have access to paid sick leave when they work for firms with greater exposure to paid sick leave mandates across their national business operations by dint of the geographic distribution of their establishments and workers. That is, state and local paid sick leave mandates spill-over through multi-state employers to provide workers in places without mandates effective access to PSL. These findings provide evidence that companies act as conduits through which the reach of local mandates that raise the floor on job quality are expanded to cover a broader set of workers.

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