#11 Health and Taxes: Should Companies Pay for Sick Leave?

– Hello! I’m calling from the National Federation of Small Businesses (Småföretagarnas Riksförbund). Do you have a minute?

Usually, I end sales calls quickly, but this one piqued my curiosity.

– Sure, go for it.

– We advocate for reducing payroll taxes and eliminating the employer’s responsibility to pay for sick leave. What do you think about this?

– Well, if employers aren’t responsible for sick leave, what incentive do we have to prioritize employee well-being?

The conversation then shifted to rare cases, like paying for sick leave during cosmetic surgery. But in over 30 years of running businesses with at most 100+ employees, I’ve encountered this issue once. It’s hardly a real concern.

As a business owner, I don’t want to pay more than necessary, but I believe in shared responsibility for employee health. Employers have a real influence on both physical and mental well-being at work. Paying for sick leave keeps us accountable for maintaining a healthy, productive environment.

Yes, taxes are high in Sweden, but we get tremendous value—free healthcare, education, and social services that benefit both businesses and workers. In countries with lower taxes, businesses bear heavier burdens. When we opened our Denver office at my previous company, we had to pay more than $5,000 per employee per year for basic health insurance alone. So, while it’s tempting to focus on cutting costs, we need to remember that our taxes protect us from bigger financial challenges.

As a business owner, I’ve always been disappointed that so many “pro-business” organizations and political parties automatically assume all companies want is lower taxes or to avoid fair health policies. Running a business certainly has its challenges, but if you can’t pay for sick leave, then perhaps it’s time to rethink your business altogether.

Instead of fixating on reducing taxes, we should focus on long-term benefits for businesses and the economy. One example could be increased support for professional development. Encouraging employers and employees to invest in education and skills development benefits not just the business but also the individual and the country. Companies with healthy, well-trained, engaged employees are better positioned for growth, and a more skilled workforce strengthens the overall economy.

So, the next time I get a call from the National Federation of Small Businesses, I’m hoping to have an entirely different conversation. At the end of the day, sustainable success isn’t just about cutting costs—it’s about investing in the people who actually make things work.