Issue Feature: Paid Family Leave
February 11, 2020By Zachary Tashman
Background
The United States is the only developed country in the world that does not guarantee paid time off for families to take care of a newborn child or a sick relative on a national level. Though the federal government guarantees women 12 weeks unpaid job protected maternity leave through the Family and Medical Leave Act (FMLA) of 1993, this law does not include mothers who have been in their job for less than 12 months or work for an organization with fewer than 50 employees. The FMLA also provides eligible employees up to 12 weeks of unpaid medical leave to care for a spouse, child, or parent with a serious health condition. Despite the 2017 enactment of legislation that temporarily offers employers up to a 25 percent tax credit to offset the cost of giving their employees paid family leave, only 17 percent of workers have access to paid maternity or paternity leave. Additionally, fewer than 40 percent have paid family medical leave, often through an employer-provided short-term disability program.
This lack of comprehensive coverage likely at least partially contributes to forcing one in four women to return to work within ten days after giving birth to minimize lost income. The Center for American Progress found that families lose an estimated $20.6 billion in wages each year due to a lack of access to paid family and medical leave. According to the American College of Obstetricians and Gynecologists, “time off from work after childbirth benefits women by allowing time for physical recovery, establishing breastfeeding, developing a strong emotional bond with the newborn, and attending health care appointments.” Paid family leave programs have also been credited in reducing the risk of abuse, neglect, and death of a child. Additionally, a study of California’s paid family leave system by the Urban Institute found that the program reduces the risk of mothers falling into poverty after giving birth.
Recent Progress
Though paid family leave (PFL) has not been a top policy priority for the quarter century since the passage of the FMLA, there are reasons to be optimistic in 2020. Since Democrats took control of the House in 2019 they have held three hearings on PFL proposals. Last year’s National Defense Authorization Act extended paid maternity and paternity leave benefits to around two million federal employees. The National Partnership for Women and Families estimated that this program could save the government $50 million in reduced employee turnover costs, and prevent the departure of more than 2,600 women from the federal workforce.
As of 2020, five states and the District of Columbia guarantee their residents some form of paid family leave, with four more states having passed PFL programs that will be implemented within the next three years. The Chamber of Commerce, which has been traditionally opposed to any PLF programs, recently conceded the need to end the patchwork nature of the current parental leave system and transition to a universal model, primarily due to the regulatory headaches that are arising as a number of states implement their own PLF systems. With pressure from all sides increasing to create a national PLF program, it is essential that Congress take action to provide relief to families in a holistic manner.
Legislation in the 116th Congress
Family and Medical Insurance Leave (FAMILY) Act (S.463 / H.R.1185)
This bill, introduced by Sen. Gillibrand (D-NY) and Rep. DeLauro (D-CT), would create a Federal Family and Medical Leave Insurance Trust Fund that is funded through a 0.4 percent increase in the payroll tax, split evenly between employees and employers. The trust fund would pay benefits to mothers and fathers for up to twelve weeks after the birth or adoption of a child or to tend to a seriously sick family member. Workers would receive 66 percent of their highest annual earnings over the last three years, with a benefit floor of $580/month and a benefit ceiling of $4,000/month. This bill would also expand protections given under the FMLA to all workers regardless of gender and workplace size.
New Parents Act (S.920 / H.R.1940)
This bill, introduced by Sen. Rubio (R-FL) and Rep. Wagner (R-MO), would use current Social Security revenues to pay for a parental leave benefit without raising taxes. However, parents who take this leave would have their Social Security retirement age increased to offset the cost. A parent taking leave would receive a benefit equivalent to their “primary insurance amount” calculated by the Social Security Administration. This bill would not expand any FMLA protections.
Advancing Support for Working Families Act (S.2976 / H.R.5296)
This bill, introduced by Sen. Cassidy (R-LA) and Rep. Allred (D-TX), would give new parents the option of receiving a $5,000 cash advance. Parents who decide to take this advance would be subject to a $500 deduction from their child tax credit for the following ten years. This bill would not expand FMLA protections.
National Assembly’s Position
Paid family and medical leave helps all families reach their full potential so that communities thrive. Of these three bills, only the FAMILY Act offers the coverage families need after a birth or adoption and to take care of a sick family member to build well-being across all stages of life. The National Assembly supports the FAMILY Act, though we encourage the sponsors of this legislation to explore alternative revenue options because a payroll tax would put the financial burden on families that predominantly rely on salary income, as opposed to through capital gains, dividends, and corporate income. We urge sponsors of the New Parents Act and Advancing Support for Working Families Act, who see the need for some form of national PFL, to back legislative proposals that offer comprehensive and equitable coverage to families.
The National Assembly will continue to closely track this issue. For more information on federal legislation impacting the human service sector, check out PolicySource. For more information contact Zachary Tashman.