Roosevelt Institute | Cornell University

Access to Paid Leave

By Philip SusserPublished November 9, 2014

The recently proposed national paid leave program (FAMILY Act) has the potential to increase the accessibility to paid leave for parents needing to take care of family members. While opponents have scrutinized the bill for its possible unintended consequences, recent studies suggest such a policy would have little effect on business operations.

By Phil Susser, 11/9/2014

             A new report from the Kaiser Family foundation indicates that women who must miss work to take care of their sick children are more likely to not have access to paid leave. Of the 39% of women who must take off work when their child is sick, 60% are not paid for their time off. On the other hand, only 3% of men reported needing to take time off in order to take care of their child. This could be related to differences in earnings amongst men and women — median earnings for women are 78% that of men — and, subsequently, that there may be more opportunity cost in a woman forgoing a day of work to take care of their child. Effectively, this creates a trade off in the ability to take care of one's child. If no other options exist for women, they are forced to sacrifice their wages to stay at home.

            This past February, Senator Kristin Gillibrand (D-NY), proposed the Family Insurance and Medical Leave (FAMILY) Act, which would create a national paid leave program. This bill is intended to provide a central system for low-income individuals to take time off and take care of family members without having to forego wages. This new system would be financed through an additional payroll tax. Employees who are being paid the median wage would be taxed an additional $65 per year. Additionally, it would create an Office for Paid Family and Medical Leave, which would be responsible for determining benefit amounts. Employees would be eligible for a maximum of 60 "paid work days", or 12 weeks of pay, if they have a family member with a specific health condition. States, including California, Rhode Island, New York, New Jersey, and Hawaii have passed similar bills. This national bill proposes similar goals as these state level laws.

            Proponents of the bill feel that children with low income parents will no longer have their health compromised as a result of their parents having to choose work over care. Additionally, they cite that as the population ages, the rising working population will have to take care of their elders in addition to children. Part of the stress on the workforce in taking care of an increasingly older population would be relieved with the introduction of this bill. Opponents of the bill feel that companies will feel less inclined to promote "work from home" arrangements and will put women at a disadvantage in gaining leadership positions (companies will hire women with the expectation that they will utilize this favorable law).

           A 2012 study conducted at Rutgers University aimed to find the effects of New Jersey's Paid Family Leave Act (2009) on Jersey businesses. They found that 41% of the businesses had zero employees take paid leave since the introduction of the bill. Businesses responded to workers who took paid leave by reallocating responsibilities to other full-time workers. The majority of businesses reported that they had little trouble adjusting to the act and that there was little effect on business profitability. While opponents may feel that paid leave has more costs than benefits, existing research shows that it does not affect the operations of businesses. If it is found that this national bill could have unintended consequences on operations of larger businesses, then a more targeted bill towards lower income individuals would be more ideal.