Why Paid 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. Calls for permanent paid leave are growing, and President Joe Biden and congressional Democrats have put forth ideas.

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

As of March 2020, 20% 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, according to findings by advocacy group Paid Leave for the United States, which catalogs policies at major U.S. companies. Low-income workers, particularly women and people of color, are disproportionately affected and have little or no access to paid time off.

2. Does the U.S. require employers to offer leave?

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 for 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 2018, two-thirds 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 eight weeks of leave, generally at 60% to 70% of their usual pay, to care for a newborn, a sick family member or their own disability. The program is funded through paycheck deductions taken from most workers in the state. Eight other states -- Colorado, Connecticut, Massachusetts, New Jersey, New York, Oregon, Rhode Island and Washington -- 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.

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

The most recent Covid-19-related relief measure expanded voluntary tax credits for employers who provide paid family and sick leave through Sept. 30. Now Democrats, who control both chambers of Congress, are pushing legislation to provide permanent, job-protected paid leave. In the past, there’s been common ground on the overall goal, but divisions arose between Democrats and Republicans over what types of leave to cover and how to fund it. Democrats largely support providing comprehensive paid leave that’s financed by payroll taxes -- a nonstarter for Republicans. Republicans generally want to avoid raising taxes and have instead proposed allowing workers to borrow against their own future federal benefits.

5. What do Democrats propose?

One proposal would create a new public program run by the Treasury Department, which would provide up to 12 weeks of paid family and medical leave for all workers. Companies could be partially reimbursed for providing paid leave. Another bill would fund up to 12 weeks of paid family and medical leave through a 0.2% payroll tax on employers and workers -- similar to the model California and other states have adopted. (That 0.2% rate might be too low to support the proposed leave program, the Social Security Administration cautioned in January 2020.) On April 28, the Biden administration unveiled a $225 billion paid family and medical leave proposal that would include time off for bereavement or to find safety from domestic violence.

6. What have Republicans proposed?

A Republican proposal from the 2019-2020 Congress would have allowed new parents to 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 then-President Donald Trump, would have funded leave by letting parents borrow against the child tax credit on their federal taxes. Neither proposal advanced in Congress.

The Reference Shelf

• The Congressional Research Service report on U.S. family and medical leave policy.
• An Organization for Economic Cooperation and Development survey on how U.S. family leave policies stack up against other industrialized nations.
• A report prepared for the U.S. Labor Department on how eligible workers used leave in 2018 under the 1993 Family and Medical Leave Act.
• A Better Balance, an advocacy group for caregivers in the workplace, has a chart on state paid family and medical leave programs.
• A National Bureau of Economic Research working paper on the effects of California’s paid leave program on labor outcomes.

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