CVS Health Corp – Paid Sick Leave (2023)

Outcome: The proposal received a vote of 26.2% at the annual meeting.

Whereas: More than 26 million people working in the private sector have no access to earned sick time, or “paid sick leave” (PSL), for short-term health needs and preventive care.[1] Working people in the United States face an impossible choice when they are sick: stay home and risk their economic stability or go to work and risk their health and the public’s health.

The vast majority (77%) of the lowest earning 10% of American employees do not have access to PSL.[2] 48% of Latinx workers and 36% of Black workers report having no paid time away from work of any kind.[3]

As the COVID-19 pandemic has shown, PSL is a crucial contributor to public health, allowing workers who have been exposed to any illness to quarantine. One study found a 56% reduction in COVID-19 cases per state as a result of temporary federally mandated PSL,[4] and others an 11-30% reduction in influenza-like illnesses from state and local mandates.[5] State and local PSL mandates have also been shown to reduce the rate at which employees report to work ill in low-wage industries where employers don’t tend to provide PSL, lowering disease and overall absence rates.[6]

A lack of PSL could pose reputational risk, especially for a healthcare company like CVS Health (CVS), which describes its mission as “take on many of the country’s most prevalent and pressing health care needs.”[7] Although CVS provides PSL for full-time employees, almost one third of employees are part-time and therefore ineligible.[8]

CVS could benefit from all of its employees having permanent access to PSL. Research finds PSL both increases productivity[9] and reduces turnover, which in turn reduces costs associated with hiring.[10] This is particularly important for lower-wage industries like retail where turnover is highest. Additionally, a significant portion of CVS’s part-time workers are likely covered by state or local mandates or collective bargaining agreements. Proactively establishing PSL for all employees would help prepare CVS for potential regulation. Thirty-eight jurisdictions, including fourteen states, have adopted PSL laws since 2006.[11]

We believe adopting a comprehensive, permanent, and public PSL policy would help make the future operating environment more equitable and mitigate reputational, financial, and regulatory risk to CVS.

Resolved: shareholders of CVS ask the company to adopt and publicly disclose a policy that all employees, part- and full-time, accrue some amount of PSL that can be used after working at CVS for a reasonable probationary period. This policy should not expire after a set time or depend upon the existence of a global pandemic.

[1] https://www.bls.gov/ncs/ebs/benefits/2021/employee-benefits-in-the-united-states-march-2021.pdf

[2] https://www.wsj.com/articles/companies-expand-paid-sick-time-leave-11632413861

[3]  https://www.bls.gov/news.release/leave.t01.htm

[4] https://www.healthaffairs.org/doi/10.1377/hlthaff.2020.00863

[5] https://www.nber.org/system/files/working_papers/w26832/w26832.pdf,

[6] https://voxeu.org/article/pros-and-cons-sick-pay

[7] https://cvshealth.com/about-cvs-health/our-purpose

[8] CVS 2021 10K, p 15 https://s2.q4cdn.com/447711729/files/doc_financials/2021/ar/CVS2021_Annual-Report.pdf

[9]  https://voxeu.org/article/pros-and-cons-sick-pay

[10] https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5649342/

[11] https://www.nationalpartnership.org/our-work/resources/economic-justice/paid-sick-days/current-paid-sick-days-laws.pdf