Is Paid Family Leave Coming to Your State?

Oct. 2, 2003 -- When Sherri Landrum's daughter was shot in both legs last spring, she couldn't afford to take any time off of work to take care of her.

Landrum, a 41 year-old single mother of nine children who lives in Denver, was eligible to take up to 12 weeks off under the Family Medical Leave Act and still have her job waiting for her when she came back. But because she wouldn't get paid for that time off, Landrum had to keep working.

"I have nine children so there's no possible way I can take off work without pay," says Landrum, who works at a children's pediatrics center.

Landrum's situation highlights what many say is a need for paid family leave in the United States, one of the few industrialized nations that doesn't provide paid benefits to workers who give birth to a child or need time off to get over an illness or care for a sick family member.

In the United States, workers who take family leave are entitled to 12 weeks under the FMLA if they've worked for the company for at least a year and the company has 50 or more employees within 75 miles of its worksite. And while U.S. workers' jobs are guaranteed while they're on leave, that time off is unpaid for many of them.

A good number of U.S. companies do provide workers with some form of compensation while they're on leave through disability insurance or other programs. But now some state governments are moving to offer paid leave for their residents, much to the chagrin of some business and employer groups.

U.S. Paid Leave Benefits Pale

On a national level, efforts to provide paid family leave have been unsuccessful. The Clinton administration had proposed a plan to provide paid family leave using unemployment insurance funds, but it never got off the ground and was eventually quashed by the Bush administration.

And compared to what workers in other nations are eligible for, the United States pales in comparison.

If a woman has a baby in France, for example, she is entitled to receive up to 26 weeks of paid maternity leave, courtesy of the country's social security system.

In Austria, workers are allowed to take up to 78 weeks off paid to care for a sick child who is under three years of age, paid for by their employer.

And in Spain, workers can have a paid leave of up to 52 weeks to care for a sick parent or a spouse.

The United States is "the only country other than Australia that doesn't have paid leave," says Thomas Kochan, professor of work and employment relations at the Massachusetts Institute of Technology's Sloan School of Management and co-director of the MIT Workplace Center. "We see this as very much of an individual choice than as a social policy."

California Offers Six Weeks of Paid Leave

Sensing a growing demand for paid leave, some states have been trying to set up their own plans.

The most comprehensive plan gets underway in California next year. Starting in July, workers will be eligible to take six weeks of paid family leave to care for a seriously ill child, spouse, parent or domestic partner, or to bond with a newborn or adopted child.

Paid leave bills have also been introduced in at least 24 states and the District of Columbia this year, with Connecticut, Hawaii and Montana passing paid leave bills into law, according to the National Partnership for Women & Families, a New York-based nonprofit organization that promotes policies to help women and men meet the demands of work and family.

The Connecticut and Hawaii laws will require certain employers to allow workers to use accumulated sick leave to care for a sick family member or for the birth or adoption of a child. The Montana law sets up an At-Home Infant Care program, which will provide subsidies in lieu of child care assistance to parents who choose to care for their infant at home by permitting employees to use their paid leave to care for a child, spouse, parent, or grandparent.

The ability to use accrued sick time for other purposes such as family care will be a big benefit to many hourly workers who otherwise couldn't afford to take time off under FMLA, says Lissa Bell, senior policy associate at the National Partnership for Women & Families.

"Hourly workers tend to have very little autonomy," says Bell. "These laws are very significant for them."

In addition to these states, five others — California, Hawaii, New Jersey, New York and Rhode Island — require companies to pay temporary disability benefits to their workers, including if they are physically disabled due to childbirth. Unless their employer voluntarily pays for leave, residents in other states can find themselves without any compensation if they or a family member gets sick.

Business Groups Fear Bureaucratic Nightmare

While many advocates of paid leave applaud the different states' moves as a step in the right direction, business and employer groups fear such laws will lead to costly, bureaucratic headaches for them.

"Leaves are unpaid for a very good reason — to prevent abuse of the system," says Julianne Broyles, director of employee relations and small business for the California Chamber of Commerce, which opposes the state's paid leave law.

California's plan has been controversial with business groups, even though the leave will be paid for exclusively through employee contributions, not with employer funds. Starting January 1, the state will deduct an additional 0.08 percent from the first $68,829 a year that a worker earns (wages above that amount aren't taxed for California's State Disability Insurance, known as SDI). So the maximum individual contribution for the program would be $55.06 for next year.

While on leave, workers will be eligible to earn anywhere from $50 to $840, or about 55 percent of their regular pay. Employees need not have worked at a company for any minimum period of time, but their eligibility for the program is based on their wages earned approximately five to 17 months before the beginning of the paid leave claim, according to California's Employment Development Department, known as the EDD, which will administer the program.

Still, business groups argue that companies will end up with higher expenses in the long run by paying overtime or training workers who will need to cover for the employee on leave. They are also concerned about how much control they'll have over their workers taking leave, since it is a state administered program.

"It's going to be a bureaucratic nightmare for all concerned," predicts Broyles.

Cost Savings Debated

Paid leave proponents point out that the California plan could actually save both companies and the state money, a claim that its opponents dispute.

How the U.S. Stacks Up

One study funded by the Labor Project for Working Families says California companies could save $89 million due to increased employee retention, while the state could save $25 million from decreased assistance on aid programs like Food Stamps. California's EDD says paid leave will cost some $19.6 million a year to maintain.

"Faced with the prospect of an unpaid leave, employees sometimes leave their primary job — relying either on public assistance or a part time job as a source of support," says the study. "However, with a paid leave policy, these employees would now take leave and remain employed with their same employer."

Indeed, paid leave supporters point out that many workers are either not covered by the FMLA because their employer is too small or they've been working for less than a year; or they decide not to take advantage of the program because they can't afford it. A Department of Labor survey in 2000 found that 74 percent of workers did not take needed leave because of lost wages.

"If we are saying that it takes two wage earners to make ends meet, then we've got to find ways to find allow people to move in and out of the labor force," says MIT's Kochan.

Whether or not this new plan will attract or repel companies to California remains to be seen. Economists say both outcomes could occur.

"If you are in Silicon Valley or in Hollywood and you're trying to convince (venture capitalists) and creative people to come and work here, family leave has to be a huge plus," says Stephen Levy, director and senior economist with the Center for the Continuing Study of the California Economy.

"If you're deciding where to local a car manufacturing plant or a paint manufacturing plant, might family leave operate differently in that context? Sure," he adds.

Will Companies Stay or Go?

One thing seems certain: Many states nationwide will be closely eyeing California's example to see if a paid leave policy — employee funded or otherwise — is something worth considering for their own state.

MIT'S Kochan, for one, thinks paid leave programs will begin to catch on nationwide in the long run. But he says workers shouldn't hold their breath that it will happen any time soon.

Says Kochan, "I think it's going to be slow in coming given the state of the economy right now."

As for Landrum — who ended up having to take some time off from work without pay to take her daughter to the doctor's and physical therapy appointments — she has been working to get the word out about the need for paid family leave by working with a Milwaukee-based group called the 9to5 National Association of Working Women, a grassroots membership organization that works on women's economic issues.

Landrum says she's been to Washington, D.C. twice to help the group lobby for paid family leave.

"We're going to push for this thing," she says. "Even if I have to stand on the capital steps myself, I will."

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