Should Paid Family Leave Be A Federal Law?

Paid family leave is a hot workplace issue. Up until last month, California and Washington State were the only states with any type of family leave legislation on the books. New Jersey passed a paid leave bill in late May. New Jersey and Washington’s programs take effect in 2009.

Most employers don’t provide any type of paid leave to take care of a new baby or an ailing parent. A study by the Society of Human Resource Management found that only one-third of companies offered paid family leave.

The Family and Medical Leave Act requires employers to let workers take up to 12 weeks off without pay. In most cases workers are guaranteed to still have a job when they return. But many employees are hard-pressed to take off so much time without pay.

The lack of paid leave is unusual among the world’s industrialized nations. Other nations without paid family leave include Liberia, Papua New Guinea and Swaziland.

The U.S. system generally is structured around the old model of Mom staying home with the kids and Dad being the breadwinner. The reality today is that 70% of families have both parents working.

There are movements in a handful of other states, including New York, Massachusetts and Oregon, to implement paid leave, but many advocates believe time off with pay should be mandated at the federal level. Two bills now circulating in Congress would mandate eight to 12 weeks of paid leave.

One bipartisan bill sponsored by Sens. Chris Dodd (D-Conn.) and Ted Stevens (R-Alaska), calls for eight weeks of paid family leave within a one-year period. Benefits would be paid out on a tiered system depending on salary. The program, which would not affect companies with 50 employees or fewer, would be funded by employee, employer and the federal government.

A second bill in the House would mandate 12 weeks of paid leave. The legislation also includes a tiered wage system and would be funded by a new trust fund. Employers and employees would pay into the fund equally through payroll deductions, similar to unemployment benefits.

But the business community hasn’t exactly embraced these type of mandates with open arms, and Stark expects a battle to pass the legislation. Some employers see the mandate as a potential threat that would raise the cost of doing business, so compnaies would end up lowering wages to compensate. Others say it cuts down on flexibility and creativity.
“Employers didn’t step up on Medicare or Social Security. We made them do it and now it’s part of the system,” he notes.

In California, the paid leave program piggybacks on the state’s disability program and is 100 percent funded by the employees themselves at an annual average cost of about $47 depending on salary. Californians who take advantage of the program get 55 percent of their pay while on family leave.
No matter what the ultimate structure, calls for paid leave are likely to intensify, especially with the graying of the population.

Paid Family Leave Becomes Hot Workplace Issue