A key piece of President Biden’s proposed $1.8 trillion American Families Plan would provide 12 weeks of paid family leave for American workers.
The proposal, which has great workplace repercussions, calls for $225 billion to fund partial wage replacement for people taking leave because they or a family member are sick, welcoming a new child or dealing with sexual assault or domestic violence. Recipients would receive up to $4,000 a month and up to 80% of wages for the lowest earners during that period.
Biden’s American Family Plan proposal, which he presented in a recent nationally televised address to Congress, came at the end of his administration’s first 100 days. Most observers agree that early employment-related measures signal the likelihood of additional actions and legislative proposals. Employers should expect a pro-labor agenda.
“No one should have to choose between a job and paycheck or taking care of themselves and a loved one – a parent, spouse, or child,” Biden said in that speech before a joint session of Congress.
About 30 million private-sector workers, many of whom are low income and part-time, did not have any paid sick leave before the pandemic.
For universal paid leave or any other part of the American Families Plan to become reality, legislation must be passed in a divided Congress. It already has support among Congressional Democrats, who have introduced a plan that would provide up to 12 weeks of universal paid medical and family leave for full- and part-time workers, including those who are self-employed.
The United States is the only developed country without a national paid leave policy, points out Amy Beacom, founder and CEO of Portland-based Center for Parental Leave Leadership.
“It is past time that we pay attention to why every other country offers this: Because it is smart, cost-effective and humane,” she said. “A federal policy funded by an insurance program that everyone pays into, similar to Medicare, would solve a number of problems. It would create continuity and predictability across employers countrywide, take the cost burden off small businesses who have a harder time absorbing costs into smaller budgets and provide a safety net to families so they don’t have to choose between receiving their paycheck to make ends meet or spending time to bond with their new child or heal from a birth.”
She noted that finances force 25% of new mothers to go back to work within two weeks of giving birth. “The costs of this reality are real and far-reaching,” Beacom said.
A federal law could bring consistency to the features of paid family leave, Beacom said. Eight states plus the District of Columbia have paid leave programs and “every single one is different,” she said. “In the states that don't have a statewide policy, some companies offer employees paid leave and every policy is different. Companies working across state lines face an overwhelming administrative and compliance burden that, frankly, is harmful to companies and employees.”
The American Benefits Council is also stressing consistency in family leave laws. The Council says that any paid leave legislation that Congress passes should include a clause that rules employers that adopt and comply with federal paid leave standards are also compliant with all state and local paid leave requirements. That will allow more simplified and consistent administration for multistate organizations, the Council contends.
If paid family leave becomes federal law, companies offering that benefit now may lose their recruitment advantage, Beacom said. “Smart companies will look to their practices that support parents and caregivers. Offering meaningful help in the form of training managers to be supportive and offering transition help such as parental-leave coaching, will be the next level way to appeal to potential employees.”
“Once we have a country-wide policy, practice and culture become the differentiators," Beacom said.
Biden's First 100 Days
Other workplace issues Biden has been addressing include:
- A $15 minimum wage. Biden is requiring federal contractors to pay their workers at least $15 per hour starting March 30, 2022. That increase will benefit only a few hundred thousand people but amplifies a progressive Democratic mantra: a $15 “living wage” for all. Before Biden’s action, the minimum wage for federal contractors was $10.95. The federal minimum wage is $7.25, although many states and local governments have established a higher threshold.
Employment lawyer Jon Hyman answers the question of why business leaders should be paying attention if they are not a federal contractor. “You should care because this Executive Order will move the minimum wage needle,” he said. “Other companies will have to begin voluntarily offering a $15 minimum wage to compete in the job market for new hires. As a result, eventually and over time, a $15 minimum wage will spread to all employers nationwide. If Congress won't act on this issue, President Biden will force employers to act on their own.”
- Higher education support that could help build a skilled workforce. One feature would be a $109 billion plan to make two years of community college free. Community colleges have for decades been a prime training job for skilled jobs that don’t require a four-year degree. If all states, territories and tribes participate, about 5.5 million students would pay nothing in tuition and fees, according to the White House. Biden also proposes upping Pell Grants to four-year schools by about $1,400. Nearly 7 million students, including many people of color, rely on Pell Grants, but their value has not kept up with the rising cost of college.
Many of the Biden administration’s early workplace-place related actions were part of the $1.9 trillion American Rescue Plan Act of 2021 (ARPA). Those actions include:
- Expanded unemployment. The APRA extends several employment programs to Sept. 6, including the $300 weekly payments on top of state unemployment benefits; unemployment compensation for those who have exhausted state benefits; and unemployment help for those who are traditionally ineligible, such as the self-employed and independent contracts.
- COBRA subsidies. The APRA provides up to six months of COBRA health insurance premium subsidies, through Sept. 30, for eligible individuals. Employers receive a 100% payroll tax credit for providing this subsidy.
- Paid leave. The APRA extends payroll tax credits for qualifying employers who offer their employees COVID 19-related emergency paid sick and family leave.
In a nod to organized labor, Biden appointed Marty Walsh, a former president of Laborers Union Local 223 before becoming mayor of Boston, as secretary of labor. Walsh’s Department of Labor is expected to pursue more worker-friendly policies than did the Trump administration’s DOL.
The Biden administration is expected to implement regulations that would narrow the circumstances where workers could be classified as independent contractors. The DOL has delayed Trump administration action that would have classified more workers as independent contractors who are not entitled to as many employer protections and benefits as traditional employees.
The new White House has also taken several steps to reverse Trump restrictions on foreign workers.
And, as a harbinger of things to come, Biden on Inauguration Day fired the general counsel for the National Labor Relations Board (NLRB). His acting general counsel, Peter Sung Ohr, has taken several pro-labor actions, such as telling the NLRB’s regional directors to protect both union and nonunion workers’ rights to engage in coordinated actions.
About the Author
Jim Fickess writes and edits for WorldatWork.