The push for paid parental, family, and medical leave is gaining traction. But legislative action in Congress is still iffy and could easily be eclipsed by events or partisan rancor over the next year.
This blog is an update to a Health Affairs Policy Brief that I wrote last year on paid family and medical leave policies. The brief, published November 21, 2016, provides an overview of the basic issues, research, and policy options. Those remain relevant 10 months later. But some things have progressed.
The Trump administration and lawmakers on both sides of the aisle in Congress have released competing paid-leave proposals this year. Additional states have enacted paid-leave laws. More large employers have expanded paid-leave benefits. And public support continues to grow.
The Trump administration’s proposal is in its 2018 budget plan and, although modest, constitutes the only new entitlement program the administration has proposed.
What Do We Mean When We Talk About Paid-Leave?
The terms family leave and parental leave are often used synonymously. But, strictly speaking, parental leave refers to programs that grant new parents a period of leave after the birth or adoption of a child. Further parsed, there’s maternal leave and paternal leave, which are self-explanatory.
Family leave, in contrast, can encompass parental leave but also time off to care for an ailing or incapacitated family member (spouse, parent, or child) of any age or to attend to the needs of one’s children, medical or otherwise.
Medical leave refers to time off to care for one’s own serious illness or that of a sick family member.
Paid parental, family, or medical leave refers to time off for which wage, salary, or social insurance-provided compensation is available. Unpaid-leave is self-explanatory: You can have the time off but without pay, and that time off can be with or without a guarantee that your job will be held for you.
The Trump Proposal
President Donald Trump proposes a national paid-leave plan for parents after the birth or adoption of a child. The plan would make new mothers and fathers—regardless of income—eligible for up to six weeks of paid-leave at an estimated cost of $25 billion a year. Funding would come from restructuring the federal unemployment insurance system.
The president’s daughter and advisor, Ivanka Trump, heads up the initiative at the White House.
A White House spokesperson told me in late June that the administration is “not wedded to its original proposal” and that Ms. Trump and other White House officials are meeting with “a wide range” of advocates, experts, and business leaders on “the best path forward.”
Ms. Trump confirmed this in her first written public comments on the issue, a letter to the Wall Street Journal published July 5, 2017. The administration, Ms. Trump wrote, is “working with lawmakers on both sides of the aisle to design a paid-leave policy.”
She clarified the administration’s conceptual approach, writing: “We see a national paid-leave benefit as the necessary floor from which private sector companies and state governments can build…. The reality is that in 63% of American homes with children, all parents work. Providing a guaranteed paid-leave program—with a reasonable time limit and benefit cap—isn’t an entitlement, it’s an investment in America’s working families.”
Congressional Democrats, meanwhile, reintroduced a slightly modified version of the Family and Medical Insurance Leave, or FAMILY, Act. Initially introduced in 2013, the bill would permit workers who qualify to take up to 60 individual days of paid-leave per year to care for a new child, a sick family member, or one’s own serious illness. Workers would receive up to 66 percent of wages or salary to a maximum of $1,000 per week. The program would be funded by a 0.4 percent federal payroll tax on workers’ wages, split between employers and workers.
Republican lawmakers countered with the Strong Families Act. That bill would give employers a 25 percent tax credit for the total amount of wages paid to workers taking up to 12 weeks of family or medical leave. The program would be voluntary, and the credit would be capped at $3,000 per employee per year. The credit would sunset entirely two years after enactment.
Thus, the Republican plan is an inducement to employers to adopt paid-leave benefits. That’s consistent with previous Republican proposals, which rely on the private sector to voluntarily offer the benefit and steer clear of any new federal entitlement program. The Trump proposal diverges from that history.
States As Testing Ground
Five states and the District of Columbia have enacted paid parental and medical leave laws to date. California was first; its law went into effect in 2004, followed by New Jersey in 2009, and Rhode Island in 2014. New York, Washington State, and the District of Columbia enacted paid-leave legislation in the past couple of years and will implement their programs in coming years. New York’s initiative launches in 2018.
The laws in all six jurisdictions require all but the smallest employers to offer between four and 12 weeks of leave after the birth or adoption of a child or to care for a sick family member. Workers are guaranteed pay from 50 percent to 90 percent of their income, up to a per-week cap that varies by state. In 2017, for example, that cap was $1,173 in California and $633 in New Jersey.
With the exception of Washington State, the states administer paid-leave through their disability programs. The programs are funded through payroll taxes on workers and employers.
Washington state’s program, enacted this summer, is important and a potential model for other states because it’s a stand-alone social insurance program and not linked to temporary disability insurance (TDI). Most states don’t have TDI programs.
Experts predict that additional states will step up to the paid-leave plate in the next few years. Legislatures debated paid-leave bills in 31 states so far this year.
The District of Columbia’s plan can, of course, be considered a city plan. Other cities, too, are experimenting. Chicago, New York City, and Austin have adopted paid parental and medical leave for city workers. In April 2016, San Francisco became the first US city to mandate that private businesses provide paid family and medical leave.
Proof Of Concept And Benefit
Paid-leave advocates point to a growing body of research showing positive results, especially in California and New Jersey.
Those include enhanced worker retention and loyalty, and reduced absenteeism. Workers who take paid-leave are more likely to return to work after an illness or the birth of a child than workers who take unpaid-leave. A 2014 Department of Labor analysis of the first decade of California’s law found, for example, that 90 percent of employers reported positive or neutral effects on productivity, profitably, retention, and worker morale.
Recent Employer Action
Large employers are increasingly aware of those benefits. The high-tech sector is leading the trend. Google, Apple, and Facebook all now offer four to six months of paid-leave to new parents.
Notably, Facebook in February expanded its family illness and bereavement leave benefit after the untimely death of Sheryl Sandberg’s husband. Sandberg is the company’s chief operating officer. Facebook’s 17,000 employees are now eligible for up to six weeks of paid-leave to care for an ill family member and up to 20 days of bereavement leave. Sandberg, an influential spokesperson for women’s rights, recently endorsed the FAMILY Act.
Non-tech firms are joining the trend, albeit more slowly. Ikea, beginning this year, offers up to four months of paid time off for new parents in its US stores. (The company’s Swedish workers get a government-mandated 480 days.) Hilton Hotels now offers all employees, including hourly-wage housekeepers, 10 weeks of paid-leave to new mothers and two weeks to fathers and new adoptive or foster parents.
The largess of these companies stands in stark contrast, however, to the larger reality. Most US firms don’t offer any paid-leave. A 2016 survey of almost 2,000 private and non-federal public companies by the Henry J. Kaiser Family Foundation found, for example, that only one in three firms provided any paid parental leave.
Overall, an estimated 14 percent of workers have access to paid family leave through their employers, and fewer than 40 percent have access to personal medical leave through employer-based short-term disability insurance.
As a reminder, a 1993 law—the Family and Medical Leave Act (FMLA) — gives workers at firms with 50 or more full-time employees 12 weeks of unpaid parental or medical leave, with a federal guarantee of job protection. But, with eligibility restrictions, FMLA covers only 60 percent of the workforce.
The Gaps: Who Takes Leave—And Who Doesn’t?
The Center for American Progress (CAP) recently estimated that, overall, one in 10 workers per year take paid or unpaid non-vacation leave — roughly 20 million people. Of that 20 million, four million take parental leave, 12 million take medical/disability leave, and four million take leave to care for a loved one.
CAP also estimates that some seven million workers in 2016 who needed leave were not able to take it, primarily because they could not afford to. Just under half needed time off to address their own health needs, and 35 percent needed family caregiving leave.
Since FMLA was enacted 24 years ago, about half of people eligible for unpaid-leave under the law have used it, according to the National Partnership for Women & Families.
Yet, a quarter of new mothers who take paid or unpaid leave are back at work within two weeks of giving birth. And another quarter quit.
Paid-leave advocates look at these statistics and see a glass very much half empty. Opponents see progress, and thus no need for a new entitlement program.
Mounting Public Support
Shifting trends in the economy and concern about work-life balance are the driving forces behind mounting public support for paid-leave. For example, millions of people now work in the “gig” economy, untethered to an employer or benefits.
A Pew Research Center survey of 2,029 adults released in March found that 82 percent support paid maternity leave, 69 percent support paid paternity leave, 67 percent support paid family leave, and 85 percent support paid-leave to deal with one’s own serious health condition.
On June 28, some 340 organizations from 40 states urged Congress, in a letter to all members, to pass “real paid-leave.”
Also in June, the conservative American Enterprise Institute (AEI) and liberal Brookings Institution released a 48-page report—“Paid Family and Medical Leave: An Issue Whose Time Has Come.” The report emerges from an ongoing initiative sponsored by the two powerhouse think-tanks to explore bipartisan legislative options on paid-leave.
Where Does The Debate Go From Here?
Policy experts concur that federal legislation over the next year is a long shot, given the partisan divide on the issue and the current state of political discourse in Washington.
A new national entitlement program would be no small step or achievement. And coming amid the ongoing bitter debate over repealing the Affordable Care Act, there may be no stomach for it on either side.
But the experts, pro and con, also agree that there’s strong support for paid-leave on its merits, and that a bipartisan path could be a win for both parties.
The Trump administration’s support for a national social insurance plan certainly breaks new ground, but it has yet to be endorsed by the Republican leadership in Congress.
Most Democrats, meanwhile, strongly support the FAMILY Act and a new entitlement program. And paid-leave advocates on the left have been highly critical of Trump’s proposal. In their letter to Congress, FAMILY Act supporters called the Trump plan “unacceptable,” “inadequate,” and “unworkable.” Primarily, they claim, the plan is too limited—encompassing only parental leave—and that its funding mechanism will not work.
Other social and economic issues could add momentum to paid-leave. In particular, public debate over wage stagnation, pay inequality between men and women, and the widening wage and salary gap between low-wage and high-wage families, is likely to include prominent mention of paid-leave.
Those who advocate for expanding paid-leave policies, such as Debra Ness president of the National Partnership for Women & Families, remain optimistic that it is a matter of if, not when. “Winning paid family and medical leave may finally be inevitable — but how fast we get there remains an open question,” Ness says.