Why Family Leave Is Still a Luxury in the U.S.

(Bloomberg) -- The U.S. is an anomaly among developed nations when it comes to paid family leave. At least 183 countries allow a working mother to take time off to be with a newborn or young child -- and to continue to earn an income while she does so. In at least 79 countries, fathers also benefit. But in the U.S. a patchwork of state and company policies dictate how families effectively provide care. With President Donald Trump actively pushing for paid family leave, members of Congress from both parties are renewing their efforts to enact a law.

1. How many Americans have access to paid family leave?

As of March 2019, 18% of private sector workers had the benefit through their employers, according to U.S. Labor Department data. (Some critics argue that this figure understates the benefits available to many American workers, particularly the ability to use sick leave, vacation days, or short-term disability leave to care for a new baby.) Generally, paid family leave benefits are more common among full-time employees and workers in larger companies and in high-paying occupations, such as those in the technology and financial sectors. Women and low-income workers are disproportionately represented in fields that offer little or no time off, according to findings by advocacy group Paid Leave for the United States, which catalogs policies at major U.S. companies.

Why Family Leave Is Still a Luxury in the U.S.

2. Does the U.S. government require anything of employers?

Unpaid leave, yes, but not paid leave, unless you work directly for the federal government. The 1993 Family and Medical Leave Act allows workers at companies with at least 50 employees to take up to 12 weeks of unpaid, job-protected leave for the birth, adoption, or foster care of a child, serious personal or family health condition, and circumstances relating to a family member’s military deployment. That law covers about 60% of the American workforce. But a report prepared for the Labor Department showed that, in 2012, almost half of eligible workers couldn’t afford to take unpaid time off, and that more than half of those who took advantage of the benefit did so because they were sick, not to take care of a new child.

3. Which states have taken action on their own?

A California law that took effect in 2004 guarantees both public- and private-sector workers six weeks of leave (rising to eight weeks on July 1), generally at 60% to 70% of their usual pay, to care for a newborn, sick family member, or their own disability. The program is funded through paycheck deductions taken from most workers in the state. Seven other states -- New Jersey, Rhode Island, New York, Washington, Massachusetts, Connecticut and Oregon, plus the District of Columbia -- followed suit, establishing paid family and medical leave programs that are or will be financed by similar payroll taxes. Each state offers different protections for parents and families, with Oregon offering the widest array of benefits, including “safe leave” for domestic violence, harassment, sexual assault, or stalking.

Why Family Leave Is Still a Luxury in the U.S.

4. What are the prospects for a nationwide paid leave?

There’s common ground on the overall goal, but there are divisions between the two major parties over what types of leave to cover and how it should be funded. Democrats largely support creating a new federal fund for comprehensive paid leave that’s financed by payroll taxes -- a nonstarter for Republicans. Republicans generally want to avoid raising taxes and instead allow workers to borrow against their own future federal benefits.

5. What do Democrats propose?

Democrats are coalescing around a bill that would fund as many as 12 weeks of paid family and medical leave through a 0.2% increase in payroll tax on employers and workers -- similar to the model California and other states have adopted. The Social Security Administration, however, said that a higher payroll tax would be necessary to support the proposed paid leave program.

6. What do Republicans propose?

Trump and some Republicans in Congress want to offer paid family leave to all workers. But unlike Democrats, they don’t envision raising taxes to pay for the program. Trump, whose interest in family leave has been spurred on by his daughter, Ivanka, proposed in 2017 that parents be given six weeks of paid leave, funded and administered through state unemployment insurance programs. Trump has reiterated that proposal each year, but it hasn’t advanced. A Republican proposal in Congress would let new parents effectively borrow against their future Social Security retirement benefits to finance their paid time off. Another bill, supported by members of both parties and endorsed by Trump, would fund leave by letting parents borrow against future benefits, in this case the child tax credit on their federal taxes.

The Reference Shelf

  • The Congressional Research Service report on U.S. family and medical leave policy.
  • A Organisation for Economic Cooperation and Development survey on how U.S. family leave policies stack up against other industrialized nations.
  • The U.S. Labor Department study of how eligible workers use leave under the 1993 Family and Medical Leave Act.
  • A National Partnership for Women and Families chart on state paid family and medical leave programs.
  • A National Bureau of Economic Research paper on the effects of California’s paid leave program on labor outcomes.
  • From Bloomberg Government, a comparison of major paid leave proposals in Congress.

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