Public Library of Science open access ; Background In 2007, part of a drinking water distribution system was accidentally contaminated with waste water effluent causing a gastroenteritis outbreak in a Finnish town. We examined the acute and cumulative effects of this incidence on sick leaves among public sector employees residing in the clean and contaminated areas, and the additional costs of lost workdays due to the incidence. Methods Daily information on sick leaves of 1789 Finnish Public Sector Study participants was obtained from employers' registers. Global Positioning System-coordinates were used for linking participants to the clean and contaminated areas. Prevalence ratios (PR) for weekly sickness absences were calculated using binomial regression analysis. Calculations for the costs were based on prior studies. Results Among those living in the contaminated areas, the prevalence of participants on sick leave was 3.54 (95% confidence interval (CI) 2.97–4.22) times higher on the week following the incidence compared to the reference period. Those living and working in the clean area were basically not affected, the corresponding PR for sick leaves was 1.12, 95% CI 0.73–1.73. No cumulative effects on sick leaves were observed among the exposed. The estimated additional costs of lost workdays due to the incidence were 1.8–2.1 million euros. Conclusions The prevalence of sickness absences among public sector employees residing in affected areas increased shortly after drinking water distribution system was contaminated, but no long-term effects were observed. The estimated costs of lost workdays were remarkable, thus, the cost-benefits of better monitoring systems for the water distribution systems should be evaluated.