By Michelle Johnson
Mar. 12, 2019
According to a 2014 study by the Institute for Women’s Policy Research, the United States is one of eight countries — and the only industrialized country — that does not guarantee paid parental leave for employees.
In contrast, nearly every member of the European Union provides at least 14 weeks of job-guaranteed maternity leave and 81 countries extend paid paternity leave.
In the U.S., New York, Rhode Island, California and New Jersey currently require paid family leave programs. Additionally, the District of Columbia, Washington state and Massachusetts have enacted legislation for leave programs to begin in 2020 and 2021.
On the federal level, the Family and Medical Leave Act provides up to 12 weeks of unpaid job-protected leave for several covered circumstances, including the birth or adoption of a child. However, only 60 percent of American workers qualify for FMLA leave, and because FMLA leave is unpaid, many workers who qualify cannot afford to take it.
There is a growing consensus that paid family leave provides tangible economic and social benefits to both workers and their employers. According to the Institute for Women’s Policy Research, paid leave increases the likelihood that workers will return to work after childbirth, improves employee morale, reduces costs to employers through improved employee retention and increases family incomes, which in turn reduces government spending on public assistance programs.
Access to family leave also increases the rate and duration of breastfeeding, reduces the risk of infant mortality, enhances maternal emotional well-being and mental health, and increases the likelihood that babies will receive well-baby care and vaccinations.
The Congressional Research Service reports that only 13 percent of private sector employees have access to paid family leave. Members of both political parties have expressed support for federal legislation requiring such leave, although they differ significantly as to the proposed scope of paid family leave programs and how to pay for them.
The Family and Medical Insurance Leave, or FAMILY Act, was originally introduced in 2013 and re-introduced in 2017 by Sen. Kirsten Gillibrand, D-N.Y., and Rep. Rosa DeLauro, D-Conn., The FAMILY Act would provide workers with up to 12 weeks of paid family and medical leave each year.
As with unpaid FMLA leave, FAMILY Act leave would permit parents to bond with and care for a newborn or newly adopted child, to care for a family member with a serious health condition, to address the worker’s own serious health condition or handle needs related to the active duty deployment of a family member.
FAMILY Act benefits would equal 66 percent of an individual’s monthly wages up to a cap and would range from $580 to a maximum of $4,000 per month. Eligibility for benefits would be based on the work history requirements of Social Security Disability Insurance, and benefits would be available to anyone with earnings and work history that qualify for SSDI. A new Office of Paid Family and Medical Leave would administer the program, and benefits and administrative costs would be funded with additional payroll taxes (2 cents per $10 of earned income), levied on workers and employers.
For example, workers earning $48,860 per year would pay an extra $1.88 per week, or $97.72 per year. The Institute of Women’s Policy Research has estimated that the plan would cost approximately $33 billion per year.
The Republican proposal for paid family leave would be funded from the Social Security Trust Fund rather than additional payroll taxes. The Economic Security for New Parents Act (S. 3345) was introduced by Sen. Marco Rubio, R-Fla., in 2018 and would allow parents to use their Social Security retirement benefits, up to 70 percent of their current salary, for 12 weeks after the birth or adoption of a child.
Recipients would repay the advance by either postponing retirement for three to six months or accepting a small but permanent reduction in their retirement benefit. There would be no new taxes under this proposal, as parental leave would be funded by drawing on participants’ Social Security benefits. The Independent Women’s Forum estimated that approximately 2 million parents would receive $7 billion in benefits each year.
FAMILY Act benefits would equal 66 percent of an individual’s monthly wages up to a cap and would range from $580 to a maximum of $4,000 per month.
Neither proposal has enough support to pass in 2019, but there is reason to believe that Congress may find a compromise this year. While the Republican Party will continue to control the Senate, the House of Representatives will see a Democratic majority for the first time since 2011. Given the bipartisan support for some form of paid family leave program, passage of family leave legislation may finally be on the horizon.
For now, no immediate action is required for employers in the 45 states that do not yet require paid family leave. However, it may be time for employers that do not provide paid family leave to consider taking this step.
Company policies will vary depending on the size of the employer, type of industry and labor pool. Employer-funded short-term disability coverage is one option. Companies may also design family leave policies that are tailored to their workforces and budgets.
For example, Netflix offers 52 weeks of paid maternity and paternity leave, eBay offers 24 weeks of paid maternity and 12 weeks of paid paternity leave, and Amazon offers 20 weeks of paid maternity and six weeks of paid paternity leave. While small businesses may not be able to afford such robust leave plans, they may have the flexibility to offer other benefits such as temporary part-time schedules, flexible work hours, job sharing and telecommuting options.
The Department of Labor estimates that the median cost to replace a worker is 21 percent of their annual salary. Clearly, leave policies that encourage work-life balance make solid business sense.
Michelle Johnson is a partner at Nelson Mullins Riley & Scarborough LLP in Atlanta, practicing in the areas of labor and employment law, business litigation, and appellate work.
We build robust scheduling & attendance software for businesses with 500+ frontline workers. With custom BI reporting and demand-driven scheduling, we help our customers reduce labor spend and increase profitability across their business. It's as simple as that.
ComplianceMinimum Wage by State in 2022 – All You Need to Know
Summary The federal minimum wage rate is $7.25, but the rate is higher in 30 states, along with Washing...
federal law, minimum wage, pay rates, state law, wage law compliance
LegalCalifornia’s push for a 32-hour workweek explained, and how to prepare
Summary: California is considering a 32-hour workweek bill for businesses with over 500 staff 4 day wee...
32 hour workweek, 4 day workweek, california, legislature, overtime
LegalA business owner’s guide to restaurant tipping law
Business owners in the restaurant industry are in a unique position when it comes to employee tips. As ...
restaurants, tip laws, tipping