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Why is Paid Family Leave So Controversial for America?

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“My administration wants to work with members in both parties to make child care accessible and affordable, to help ensure new parents have paid family leave.”

These were the words of President Donald J. Trump in March 2017 during his first joint address to Congress. These words, and the sentiment they purport to support, are sorely needed. America stands woefully behind the rest of the world on the issue of paid family leave, and we should be embarrassed. The question remains, what do we do about it? Because we must do something, for we, as a nation, are failing our employees on this important issue.

The federal Family and Medical Leave Act only provides unpaid leave, and even then, it only covers an estimated 57% of American employees. Approximately 66 million workers do not qualify.

As a result, the United States of America, the world’s greatest economy, stinks at providing for employees when it comes to paid time off from work for medical reasons.

As a nation we lag so far behind the rest of the world on family leave, it’s embarrassing. It’s bad enough that our European allies such as Germany, France and Sweden run laps around us with their paid leave laws. When nations like Mongolia, Iran and Afghanistan are trouncing us, our leave policies are indefensible.
It appears that most of us agree that we must do something to alter this imbalance.

According to a recent survey conducted by the Pew Research Center:

• 85% say that workers should receive paid leave for their own serious health conditions.
• 82% say that mothers should receive paid leave following the birth or adoption of a child.
• 69% say that fathers should receive paid leave following the birth or adoption of a child (notice the disparity, and what this says about our deeply held stereotypes over the roles of mothers versus fathers in the family and in the workplace).
• 67% say that workers should receive paid leave to care for a family member with a serious health condition.

Despite the call for paid leave, only the smallest of majorities (51%) believe it should be a government mandate, with the remainder holding that it should be up to each employer to provide it as a benefit. And, when asked to rank public policy priorities for 2017, paid family leave came in dead last at 35%.

Meanwhile, various surveys suggest that employees value flexible work schedules more than any other benefit, and the ability to work from home or set one’s own schedule more than how much one earns.

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We have three options to fix this imbalance:

  1. Support a national paid leave law.
  2. Support initiatives on a state-by-state basis.
  3. Decide, as employers, to do that which our governments have largely yet to do and voluntarily offer paid family leave as a benefit to our employees.

As to the first option, while the Trump administration has said little else about this “paid family leave” plan, Ivanka Trump, who has made this a priority to address in her dad’s administration, has given us some insight.

Ms. Trump met with members of both the U.S. House of Representatives and U.S. Senate to discuss the following proposals for affordable child care and paid family leave:

  • Provide a tax deduction for the cost of child-care expenses for individuals earning less than $250,000 a year, or couples earning less than $500,000, with lower-income families without any tax liability receiving a rebate in the form of a larger earned income tax credit.
  • Guarantee six weeks of paid maternity leave by amending state unemployment insurance systems, which are already largely underfunded. This plan omits adoptive parents, who would still have unpaid FMLA leave available if they qualify, and any reason for a leave of absence other than the birth of a child. It also omits fathers, which may have serious constitutional equal-protection hurdles to overcome.

Other than Ms. Trump’s lobbying, there has been scant other action on any federal fix for this problem.

Where the federal government has failed to act, state governments have started to step in.

Four states — California, New Jersey, New York and Rhode Island — currently mandate paid family leave. Washington, D.C., and Washington state each enacted a paid family leave measure in 2017 that will take effect in 2020.

All current statewide programs are administered through pre-existing temporary disability insurance programs and funded via employee payroll deductions.

What do these programs look like? Let’s take a look at my home state, Ohio, which has proposed, but not enacted, similar legislation.

In essence, the Ohio Family and Medical Leave Insurance Benefits Act would create state-administered short-term disability insurance for employees who need time off for an FMLA-covered reason.

The bill would:

  • Create the family and medical leave insurance program, to be administered and enforced by the Department of Jobs and Family Services, the same state agency that administers unemployment insurance
  • Apply to any employee who has worked for the employer for at least 680 hours in four of the prior five completed calendar quarters
  • Allow an employee to receive family and medical leave insurance benefits for any reason for which he or she would otherwise qualify for unpaid leave under the FMLA
  • Vest the Ohio Department of Jobs and Family Services with the responsibility of processing and administering employee claims for paid sick leave, including hearing appeals over denied claims
  • Enact a sliding scale of benefits based on income level, from 95% of one’s average weekly wage for the lowest wage earners up to 66% for the highest
  • For FMLA-eligible employees, run Ohio paid leave concurrently with federal unpaid leave
  • Prohibit retaliation against any employee who fi les a claim, communicates an intent to fi le a claim, or testifies or assists in any proceeding
  • Create a private cause of action for any aggrieved employee, with damages limited to lost wages and other actual monetary losses, interest, equitable relief and liquidated damages equal to any award of lost wages and monetary losses.

One of the bill’s sponsors, Rep. Michael Ashford, makes a common-sense appeal for its passage:

What this basically does is send a very powerful message to companies’ quality employees that they value what you do and what you bring to their company. It’s a bill that’s very good in a sense that it will save employers a lot of money because they will be able to retain employees that they really value and keep them on the payroll. And it doesn’t come out of their pocket; it’s a program that would be paid by employee premiums and it would be withheld from their wages, or employers would have the option of paying the premium. It’s a low-cost insurance program and the premium ranges anywhere from $30 to $50 a year, so it’s very affordable.

It’s a business-friendly approach to something that most agree is a huge problem that must be solved.

New York’s paid family leave law, which took effect earlier this year, works similarly. It provides job-protected and employee-funded paid leave (eight weeks in 2018, scaling up to 12 weeks by 2021) to care for a spouse, domestic partner, child, parent, parent-in-law or grandparent with a serious health condition; to care for a newborn child during the first 12 months after the child’s birth or after the first 12 months after placement of the child for adoption or foster care; and for when a spouse, domestic partner, child or parent is called to active military duty.

In other words, it takes the FMLA, adds “domestic partners,” and pays for the job-protected time away from work via insurance proceeds funded by mandatory employee payroll deductions.

Which brings us to the third option — voluntary action by private employers.

Even if your business does not operate in New York or any of the other three states that have already adopted paid family leave, these state leave laws should matter to all employers. They matter to all because they move the needle on this issue. To compete in the job market against those employers that offer paid leave, other companies will have to begin voluntarily offering paid sick leave as a fringe benefit. Thus, over time, paid sick leave will spread to most employers nationwide, whether by government fi at or voluntary adoption.

The United States remains the only industrialized nation that does not guarantee working mothers paid time off after childbirth, and we lag most of the rest of world on other paid family leave. Frankly, it’s high time we join the rest of the civilized (and, apparently, less than civilized) world on what appears for everyone else to be a noncontroversial issue.

Bottom line? It’s time to get ahead of the curve on the issue of paid sick leave. If you dislike more government regulation of private workplaces, then offer paid family leave as a benefit to your employees. Given how far we have to catch up, it presents an amazing recruitment and retention opportunity for the American employer.

Alternatively, if private employers fail to act, state and federal government will eventually step in to fill this glaring gap.

It’s time to board the paid sick leave train. It’s leaving the station one way or the other. The only question is who is going to be the conductor — employers or the government.

Jon Hyman Bio Image

Jon Hyman is a partner in the Labor & Employment Group at Cleveland’s Meyers, Roman, Friedberg & Lewis. Follow him on Twitter or connect with him on LinkedIn

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