Why small businesses need a national paid family and medical leave program
Small companies across the board could realize cost savings, a reduction in turnover, and improved morale.
I was thrilled to hear President Joe Biden describe his proposal for national paid leave as a component of his American Families Plan. As I’ve vocalized my excitement for Biden’s proposal the response from many has been, “I thought small businesses were opposed to this type of nationwide policy.” I’m frustrated that this widespread misperception persists. At the May 18, 2021 hearing by the Senate Committee on Health, Education, Labor & Pensions some politicians and paid lobbyists also expressed concern about the burden of a national policy on small businesses.
Related: Addressing the growing paid family and sick leave crisis
As a founder and CEO of a small company that focuses on families and has employees across five states, I strongly believe that a nationwide paid family and medical leave program would be a big win for small businesses across the country. I’m not alone in my support as a small business owner for a nationwide leave policy. At least two-thirds of small business owners from around the country support such a program. Here’s why I support a nationwide paid leave program:
It improves the bottom line for small companies
A national paid family and medical leave program would help the bottom line of small companies. At UrbanSitter, we use California’s FMLA as the standard for our leave policy. With employees in four other states, we’ve had to navigate each employee’s leave to adjust for varying levels of state support and then supplement as needed. This has been challenging to execute as a small company, not to mention expensive, but we believe it has been the right thing to do. A nationwide paid leave program would cover much of the expense we’ve been bearing, allowing us to invest that money in growth opportunities for our company or to afford temporary coverage to ensure business continuity while the employee is on leave. Both of these impacts would result in additional productivity and job creation.
Small companies across the board could realize cost savings, a reduction in turnover, and improved morale. Studies show that those who take paid leave are more likely than those with no paid leave to return to the same employer. In my state, studies on Calforina’s FMLA have shown that 99% of surveyed employers reported paid leave having a positive or neutral impact on employee morale.
Let’s level the playing field between big and small
The creation of a national leave policy would also start to close the gap on benefits being offered by large corporations and small businesses. It’s a struggle for small companies to recruit and retain employees when competing against large corporations that wield the market power to offer hefty benefits. Jimmy Carter said, “America has always been a country of innovation and dynamism, entrepreneurship.”
Small businesses are able to foster innovation and creativity faster and more effectively than large organizations in my opinion. I’ve seen some of the brightest, most innovative people turn down their dream jobs at small companies to take a job (or remain) at a large company solely for the medical and parental leave benefits out of concern that a child or elderly family member will need them. With more than 73% of employees in the United States caring for a child, parent, or friend, this is not a niche segment of employees being forced to make tradeoffs.
It’s one step toward equality
The ultimate reason I support a national paid leave program is that it will improve equality in our country. The fact is that women still shoulder most caregiving responsibilities and are more likely to suffer from care-related job interruptions, which ultimately impact career advancement and earnings. Paid leave increases the likelihood that women will return to work. In addition, the racial wealth gap means employees and small business owners of color have less financial cushion for taking time off. A paid leave program would be the catalyst our country needs to close the race and gender wealth gaps.
The time is now
COVID has drawn attention to the acute need employees have for paid family and medical leave. In my opinion, a positive, unintended consequence of this timely attention is that it has surfaced the underlying and long-existing chronic need for a paid leave system. Employees who are caregivers have often shouldered this burden unnoticed. Employers and politicians alike are now vividly aware of American employees’ need for a nationwide leave policy. We have a president who supports this type of policy, as well as the bipartisan support to push it through. Let’s act now to strengthen the families and communities that sustain the hundreds of thousands of small businesses like mine.
Lynn Perkins is the founder and CEO of UrbanSitter. She is also the co-founder of FamTech, an organization of 160+ founders building forward-thinking solutions for all families.
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