Family Leave in the United States: Time for a Change?

by Mathew Rayman March 22 2014, 13:43

On February 5, 1993, the Family and Medical Leave Act of 1993 (“FMLA”) was signed into law by Bill Clinton, mandating 12 weeks of unpaid family leave for companies with over 50 employees, if the employee has worked at least 1,250 hours during the last 12 months with the company.[1] In its findings, Congress specifically recognized the importance of parent participation in early childhood and the lack of job security available to working parents, and sought to give new parents more flexibility with work-life balance.[2] Since the FMLA was passed, the United States has fallen far behind other developed countries in providing leave for new parents. After more than 21 years, U.S. lawmakers should reexamine the national family leave policy and increase the benefits guaranteed for family leave. A more generous family leave policy is not only good for individuals and families, but also good for business. 

The United States is a standout among its peers: it is the only high-income country that does not guarantee paid parental leave as a national policy.[3] The U.S. also mandates significantly less leave time than its peers, with 12 weeks of unpaid job-protected family leave for qualifying employees.[4] This policy disproportionately affects women, who are the primary consumers of family leave time due to childbirth. Because the leave is unpaid, women are pressured to return to work sooner and are less able to benefit from the positive outcomes associated with longer mother and child leave times.[5] From 1950 to 2011, the percentage of women participating in the labor force has increased from 33.9%[6] to 58.1%.[7] The percentage of women working with a child under one year of age was 57.0% in 2012,[8] but leave under the current statute is only available to about half of all working women.[9] A change in policy could have potentially broad reach.

 

Paid family leave as a concept is not new. In 1919, the U.S. considered signing an international agreement promoting job protection and paid leave for new mothers.[10] Opposition to paid family leave policies is also not a new phenomenon. A common argument against paid family leave is that it is too expensive for businesses and kills jobs. When California sought to pass its own paid family leave law in 2002, this was the most common refrain from critics like the California Chamber of Commerce.[11] The law, as implemented, provides up to 6 weeks of paid family leave funded entirely through employee contributions, through the state’s disability insurance program.[12] Since 2002, businesses in California have experienced minimal disruption from compliance with the policy.[13] Of course, with no contribution required from the employer, the only real disruption to business would be the absence of workers, as with unpaid leave. Some advocates are calling for a new national policy for paid medical leave that would mandate an employer contribution in addition to the employee’s contribution, similar to Social Security.

 

On December 12, 2013, the Family and Medical Insurance Leave Act of 2013 (“FAMILY Act”) was introduced in the House and Senate.[14] The Act would establish a family-leave insurance system within the Social Security Administration to provide up to 12 weeks of paid leave at 66% of normal income to new parents and other qualified caregivers.[15] A new Federal Family and Medical Leave Insurance Trust Fund would be created and be funded by contributions equal to 0.2% of an employee’s wages made by both employer and employee.[16] Unlike the FMLA, this bill does not provide a minimum employer size, and would therefore apply to small and large businesses alike. It also differs from the California law because it requires employer contributions. The bill is likely to face its greatest opposition due to these two factors.

 

Business groups like the California Chamber of Commerce attacked California’s paid leave statute as “job killing” even though it required no contribution from employers. The FAMILY Act is likely to face similar rhetoric, particularly because it does impose a direct cost on employers, including small businesses. While the FAMILY Act will create certain costs for businesses through additional payroll taxes, they will likely see direct and indirect benefits from this policy. For companies that already offer paid leave policies comparable to that proposed in the FAMILY Act, it will remove the costs of administering their own leave policies. With paid leave, employees can afford to take more time off, and particularly with new mothers, this leads to better mental and physical health outcomes.[17] Healthier workers tend to be more productive.[18] Paid leave increases employee retention, which reduces the need to recruit and train replacements.[19] For example, when Google increased its maternity leave time from 3 months to 5 months, it saw a 50% reduction in women leaving the company.[20] The combination of benefits to individual employees and businesses outweigh the costs. Policies like the FAMILY Act offer a way to strengthen the American family and the workforce without placing an undue burden on business.

 

 



[1] 29 U.S.C. § 2601, et seq.

[2] Id.

[3] Ariane Hegewisch & Janet C. Gornik, The Impact of Work-Family Policies on Women’s Employment: A Review of Research from OECD Countries, 14 Cmty., Work & Family 119, 122 (2011) 

[4] Id.

[5] Megan Shepard-Banigan & Janice F. Bell, Paid Leave Benefits Among a National Sample of Working Mothers, 18 Maternal and Child Health 286, 287 (2014)

[7] Bureau of Labor Statistics, Women in the Labor Force 1 (2012) available at http://www.bls.gov/cps/wlf-databook-2012.pdf

[9] Shepard-Banigan, supra note 5, at 287.

[14] Family and Medical Insurance Leave Act of 2013, S.1810, 113th Cong. (2013); Family and Medical Insurance Leave Act of 2013, H.R. 3712, 113th Cong. (2013)

[15] S.1810, 113th Cong. (2013)

[16] Id.

[20] Id.

 

Comments are closed

Theme by Mads Kristensen

Invitation


We invite law professors, practitioners, and students to submit short articles for publication on this website. Simply email articles to the editors of the journal using the "Contact" form link above.   We also strongly encourage readers to post comments relating to a specific article or a topic covered by an article on the website. Just click on the "Comments" link located in the post footer below each article.

Recent Comments

Comment RSS

Disclaimer

This Journal is published by members of the Business Law Society at the University of Illinois College of Law. It is not a publication of the University of Illinois, and, therefore, the University of Illinois bears no responsibility for its content. Moreover, this Internet publication is prepared as an informational service only and should not be relied upon as legal advice. Although every attempt is made to ensure the information is accurate and timely, the information is presented "as is" and without warranties, either express or implied.