How close are we to a federal paid family leave law?

As more states take up the call, the hope of a federal paid family leave law burns ever brighter.

The lack of paid family leave in the United States has significant consequences, both for families and the economy at large. (Photo: Shutterstock)

Of the 193 United Nations members, the United States is one of only eight countries that offer no paid maternity leave. Of those eight, the United States is the sole superpower, and the only high-income country. 

The closest our federal government has come is the Family and Medical Leave Act of 1993 (FMLA). Signed into law by President Bill Clinton, FMLA requires covered employers to provide employees with twelve weeks of leave and job protection for qualified medical and family reasons like the birth of a child or to care for a seriously ill family member. But that leave is unpaid. 

The lack of paid family leave in the United States has significant consequences, both for families and the economy at large. The leaves of absence mandated by the FMLA tend to be utilized more often by women than by men. This in turn has led to a sense among U.S. employers that women are more expensive to employ than men, spurring the very discrimination in hiring and compensation the law was intended to help curb. Workers with less education and lower incomes tend to have the lowest rates of access to FMLA leave, fueling class inequality. Personal politics aside, I think we can all agree that there are too many engines of inequality and discrimination currently running at full steam. Paid family leave is a way to turn at least one of those engines off.

Moving the needle

To that end, there are models we can turn to, models that should engender at least a tiny bit of optimism. Across the country, a few companies, cities, and counties have begun offering paid leave to employees. But perhaps most encouragingly, several states have taken a slice at this Gordian Knot. California, New Jersey, Rhode Island, and New York have paid family leave laws now in effect. The District of Columbia and the state of Washington have paid family leave laws slated to take effect in 2020. And now the Commonwealth of Massachusetts will be making paid leave available to its workers beginning January 1, 2021.

All of these state laws fund their paid leave mainly through payroll taxes of varying percentages. Rhode Island’s payroll tax is the highest at 1.2 percent, while also offering only four weeks of leave – the least among these states. By contrast, Washington and Massachusetts are poised to offer the most leave so far, up to twelve weeks. Interestingly, not only do they plan to fund their leave with the lowest payroll tax, but also to split the tax between the employer and employee, further lowering the tax burden on workers. Meanwhile, D.C.’s program is set to be financed wholly by employers. The District and New York will each offer eight weeks of leave, though New York’s leave is set to expand to twelve weeks in 2021.

The wage replacement amounts each state offers through its leave also show an exciting trend. When California’s law first went into effect, it offered a wage replacement rate of only 55 percent. This rate was raised to up to 70 percent in 2018. When New Jersey’s law took effect in 2009, its wage replacement rate was 67 percent. The Massachusetts law will offer wage replacement up to 80 percent, while Washington D.C. and Washington State will both offer up to 90 percent during their paid family leave offerings.

Another key evolution: the definition of “family member” under the laws is broadening. Under the FMLA, leave is provided to care only for an employee’s spouse, child, and parent. California broadened this definition to include domestic partners. Washington D.C. includes siblings and grandparents in its definition. To those, Washington State added grandchildren. And New Jersey’s definition now goes even further, including all of the above, plus in-laws, civil union partners, any person related by blood, and any person with whom the employee has a close association that is the equivalent of a family member. Don Corleone would be impressed.

Refine and evolve

If these states are any indication, the offer of paid family leave is evolving. As more states take up the call, they push the envelope a bit further and the Overton window shifts. The leave time gets longer, the wage replacement rate climbs higher, the definition of family member becomes more inclusive, and the benefits offered under paid family leave become ever more comprehensive. The hope of a federal paid family leave law burns ever brighter.

There will never be any shortage of economic concerns urging not be hasty in implementing paid family leave. Business interests insist they cannot absorb the extra cost, killjoys who complain that unscrupulous ne’er-do-wells will defraud the paid leave system, and many simply fear the burden of administering a sweeping new paid leave program.

There is quite a bit of evidence to suggest that the reality behind most of these economic fears is not so dire. Surveys of employers in California, Rhode Island, and New Jersey indicate that paid leave policies were less onerous on employers than they expected. Companies that offer paid family leave to their employers have higher rates of employee satisfaction and lower rates of turnover among employees who take leave. In the long run, this saves them money that would otherwise be spent hiring and training replacements. Employers can keep their seasoned pros while simultaneously saving money.

In the 2016 presidential campaign, hopefuls from both major parties floated proposals for paid family leave. Public support for paid family leave is strong among younger voters, who become more politically engaged by the day. The momentum seems to be behind the push for a federal law, and this is likely going to become one of planks in a number of 2020 candidates’ platforms. Time will tell if Congress and the White House make something happen on this issue, but in the meantime, there are a few states where paid family leave is a reality.

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