Who Benefits From Paid Family Leave? American Workers and Employers

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The United States is one of only a handful of countries in the world that doesn’t guarantee paid time off to new mothers and the only industrialized country that doesn’t guarantee its citizens paid family leave. While an existing federal law known as the Family and Medical Leave Act of 1993 guarantees leave for full time employees who have been at their job for 12 months or more, the law only provides the right to unpaid leave. In practical terms, that means that often only those higher wage earners who can afford to take unpaid time off for a new baby, sick family member, or personal illness are able to take advantage of the law’s protections. Taking unpaid time off is simply not an option for many American workers.

Americans overwhelmingly support paid family leave, by 85 percent, according to some estimates. Several states — including Connecticut, California, Washington State, Massachusetts, New Jersey, New York and Rhode Island — as well as the District of Columbia, have passed paid leave laws in recent years. At the federal level, leaders from both sides of the aisle have expressed support over the past several months for some form of a paid family leave program amidst the growing acknowledgement that something needs to give for working parents in the U.S.

Senator Kirsten Gillibrand of New York and Representative Rosa DeLauro of Connecticut, both Democrats, reintroduced the Family Act, which would provide Americans up to 12 weeks of paid leave at 66 percent of their monthly wages. The proposal is meant to build on the unpaid leave offered under the Family and Medical Leave Act. The benefits in the proposal would apply to every American who works full-time — and potentially even those who are part-time, temporary or self-employed. Among other things, the Family Act considers “family leave” to include birth or adoption, and serious health conditions including those affecting a child, parent, spouse or domestic partner.
Republican Sens. Marco Rubio of Florida and Mitt Romney of Utah, with House co-sponsor Ann Wagner of Missouri, have unveiled a paid family leave bill Opens a New Window. which would provide paid leave for new parents (though it does not address leave for personal illness or to care for another family member). Under their proposed legislation, new parents would be allowed to pull forward up to three months of their social security retirement benefits to use for leave following the birth or adoption of a child. Then at retirement, they would be required to delay claiming their benefits by three to six months.

Regardless of which legislative proposal succeeds in the end, it’s clear that both American workers and the companies they work for stand to benefit from paid family leave. Providing workers with paid family and medical leave ensures that they are able to take extended leave, with pay, to care for a new child, recover from a serious illness, or care for an ill family member, and then return to their job afterward. Economic studies show that access to paid family leave significantly increases the likelihood that workers will return to their jobs instead of dropping out of the labor force, or spending time out of work to search for a new job.

Paid leave also helps to close the gender pay gap. It represents an important step for women’s economic security, especially for low-wage workers and women of color who are an increasing number of primary breadwinners for their families. Research shows that women with access to paid leave are significantly more likely to return to jobs at the same employer and for the same wages. That means they can build more seniority and experience in their jobs, helping to raise their earnings and close the pay gap.Paid family leave also benefits employers. Businesses gain from retaining workers with firm-specific knowledge and skills, and from not having to bear the sizable costs of finding and training new employees. Companies also benefit from increased productivity and higher levels of employee satisfaction. As employers sink more resources into employee training, they are looking for ways to reduce turnover. Providing paid family leave helps companies directly address one of the root causes of attrition and absenteeism among employees— child-care issues, elder-care issues, and family issues.

The American workforce is increasingly multigenerational, and employees face growing caregiving responsibilities including infants, children, spouses, domestic partners and aging parents. Paid family leave means workers do not have to choose between taking care of a family member and losing or being forced to quit their jobs. Research shows that paid family leave improves financial security, especially for lower wage workers, improves productivity and retention of skilled workers, and bolsters economic growth. Paid family leave also strengthens families because caregivers can focus on the needs of their children during early childhood. Paid family leave helps close the gender wage gap by increasing the likelihood that women will return to their pre-leave employment, and increasing women’s participation in the job market overall.

With broad support from the American public, and research that clearly shows the benefits of paid leave for both workers and employers, it’s high time for the United States to join the rest of the industrialized world and make paid family leave available to all employees.

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