What the Research Say: #FMLA25 and Paid Family and Medical Leave

What the Research Say: #FMLA25 and Paid Family and Medical Leave

Paid Leave Insurance Would Provide Vital Benefits at an Affordable Cost

photo-1494451930944-8998635c2123Since its signing on February 5, 1993, the Family and Medical Leave Act (FMLA) has been used millions of times by eligible workers to take up to 12 weeks of job protected, but unpaid, leave for their own serious health conditions, having a new child, or caring for seriously ill family members. On the 25th anniversary, IWPR released a new fact sheet showing that the proposed FAMILY Act would cost less than half of one percent of taxable payroll, while extending access to the economic, health, and social benefits of paid leave to millions of Americans.

>>Read the fact sheet

>>Tweet this

25 Years after FMLA: Research Finds that Paid Leave is a Great Investment

Despite initial fears among skeptics that it would hurt business, protections guaranteed by the Family and Medical Leave Act (FMLA)—passed 25 years ago this week—are now a cornerstone of U.S. employment law and human resource policy, providing peace of mind to millions of workers who have started families, faced serious illness, or cared for a loved one, all without hurting their employer’s bottom line. FMLA was step one. Almost three decades later, workers are still waiting for step two—paid family and medical leave.

>> Read the post by IWPR president Heidi Hartmann, Ph.D., and Job Quality and Income Security Program Director Jeffrey Hayes, Ph.D.

>>Tweet this 

ANNOUNCEMENTS

IWPR and American University’s Program on Gender Analysis in Economics Announce New Partnership

The Institute for Women’s Policy Research (IWPR) and American University’s Program on Gender Analysis in Economics (PGAE) are announcing a new partnership to collaborate on gender-focused research relevant for public policy. The new affiliation will support joint events, research projects, and the joint appointment of a research economist, who will have the opportunity to direct an academically rigorous, policy-oriented research program at IWPR and provide high-quality instruction in American University’s graduate and undergraduate programs.

President Heidi Hartmann says, “I am thrilled to partner with AU’s Program on Gender Analysis in Economics, an academic kindred spirit to IWPR’s policy-oriented approach.”

>>Read the full statement

[Call for Papers] Pathways to Gender Equality: Economic Gender Analysis Addressing Current and Future Challenges

PGAE and IWPR are pleased to announce a call for papers for a conference to be held on October 26 and 27, 2018, in Washington, DC, bringing together scholars and policy analysts who see gender analysis as central to solving the important economic issues–increasing inequality, global poverty, the increasing deficit of care. The conference seeks proposals for papers, panels of papers, round tables, and posters. Visit the IWPR website for a full description and to learn how to submit your proposal.

IWPR Recognized as One of Top Think Tanks in the United States

For the third year in a row, IWPR has been recognized as one of the top think tanks in the United States by the Think Tanks and Civil Societies Program (TTCSP) at the University of Pennsylvania, with recognition for its external affairs program and named a “think tank to watch.” Read the report and see the rankings on the TTCSP website.

NEW RESOURCES & COMMENTARY

National Stalking Awareness Month: Economic Impacts of Stalking

January 2018 marked the 15th observance of National Stalking Awareness Month. Stalking continues to affect nearly one in six women and more than one in 19 men in the United States in their lifetime. Research shows that the economic effects of stalking on victims are long-lasting. Wise policymaking would consider the economic impacts of stalking and how to better accomodate victims’ needs.

>>Read more on IWPR’s blog.

Is Your Campus Family Friendly? Data and Tools to Promote Student Parent Success–Webinar Recording Available

In case you missed our webinar, co-hosted with Endicott College, that reviewed new IWPR research on single mothers in college and provided an overview of Endicott’s Family Friendly Campus ToolkitUsing Data to Improve Outcomes, a self-assessment resource for higher education institutions that provides guidance on how to collect data about and from student parents, and for improving the availability of services that can help them succeed, you can access the full presentation and recording of the webinar on our website.

>>Watch full webinar

>>Download full presentation 

IWPR IN THE NEWS

#MeToo

MarketWatch | Next for #TimesUp and #MeToo: More women CEOs (February 4, 2018)

The Root | Playing the Blame Game: Consent Is Both Simpler and More Complicated Than You Think (January 21, 2018)

Bloomberg | As #MeToo Sweeps the World, Economics Profession Has Its Own Reckoning (January 18, 2018)

Equal Pay

NBC News | How women can close their own personal wage gap (January 29, 2018)

Marketwatch | What Rosie the Riveter would make today (January 28, 2018)

CNN Money | The words we use to talk about the gender pay gap (January 22, 2018)

USA Today | Pay gap: 48% of women say they have to work twice as hard as men to take home half the pay (January 18, 2018)

Hollywood Reporter | 3 Ways Women in Hollywood Can Negotiate a Better Deal (January 18, 2018)

CNBC | Michelle Williams reportedly got 1,000 times less than Mark Wahlberg—here’s how to ensure that won’t happen to you (January 10, 2018)

Future of Work

The Atlantic | Why Are Women Still Choosing the Lowest-Paying Jobs? (January 25, 2018)

Bloomberg | What the Gender-Pay Gap in Clothing Says About U.S. Wage Growth (January 25, 2018)

Bizwomen | Women pay the price for automation (January 24, 2018)

Student Parents

The Hechinger Report | A program helps low-income parents graduate at twice the rate of other community college students (February 5, 2018)

Nerdwallet | For Some Single Parents, Online College Holds the Key (January 30, 2018)

Educate (Podcast) | Nearly 1 in 5 female college students are single moms (January 16)

Paid Leave

Slate | The Anti-Trump Wave May Position Hawaii to Lead Way on Work-Family Policies (January 18, 2018)

25 Years after FMLA: Research Finds that Paid Leave is a Great Investment

25 Years after FMLA: Research Finds that Paid Leave is a Great Investment

Summary: On 25th Anniversary of the landmark Family and Medical Leave Act (FMLA)—which guarantees job-protected, but not paid, leave—the evidence is clear: paid leave would provide economic benefits for families and the country at an affordable price.

By Heidi Hartmann, Ph.D., and Jeffrey Hayes, Ph.D.

Despite initial fears among skeptics that it would hurt business, protections guaranteed by the Family and Medical Leave Act (FMLA)—passed 25 years ago this week—are now a cornerstone of U.S. employment law and human resource policy, providing peace of mind to millions of workers who have started families, faced serious illness, or cared for a loved one, all without hurting their employer’s bottom line.

To those of us involved in the public dialogue around family leave in the early 1990s, the passage of the FMLA was a win-win-win for workers who no longer had to choose between good health and a good job; for employers who saw reduced turnover costs and healthier, more productive employees; and for taxpayers who had subsidized the lack of a job guarantee for own illness and family care through unemployment insurance and public assistance programs.

FMLA was step one. Almost three decades later, workers are still waiting for step two—paid family and medical leave.

Access to paid leave in the United States varies. The United States is the only high-income country, and one of a few countries in the world, that do not guarantee some pay to women during maternity leave. While most U.S. workers receive some pay while on leave—usually through paid vacation, other “paid time off” hours, or short-term disability insurance, with a small percentage (15 percent) having access to leave for all FMLA-covered reasons—one in three workers who do not receive any pay while absent from work are disproportionately likely to be low-wage workers. These are the workers least able to afford such a leave.

In addition to the economic benefits, studies have shown that access to paid leave improves breastfeeding outcomes, lowers infant mortality rates, and is associated with other health benefits for mothers and children.

As pressure mounts to develop national legislation, policymakers are grappling with how to design a paid leave system and how to pay for it. Costs will vary depending on the length of leave guaranteed and the percentage of wages that will be guaranteed while on leave. But new estimates show that current serious proposals will not break the bank and will have lasting benefits.

Some have proposed a social insurance style system that provides universal coverage, while others propose using tax credits. Social science research shows that the social insurance model provides more bang for the buck.

Analysis suggests that, because a tax credit for paid leave rewards voluntary employer behavior and will mostly go to those employers who are already providing paid leave, it is unlikely to benefit the workers who need it the most, those with fewer skills who earn the lowest wages. A tax credit approach to paid leave is also untested, whereas four states have paid leave insurance systems: California (passed in 2002), New Jersey (2009), Rhode Island (2013), and New York (2016).

While it is too soon to evaluate the impact of New York’s law (which began to pay benefits on January 1, 2018) rigorously, the other three provide rich case studies and data on leave-taking behavior, that inform our economic assumptions about costs of providing paid leave nationally. We now have more reliable estimates of how much a national paid leave program would cost than we have ever had, as well as good estimates of its benefits.

The Institute for Women’s Policy Research (IWPR) has estimated the costs of the FAMILY Act that has been introduced in both sides of the U.S. Congress (H.R. 947 and S. 337) to provide partially paid leave for family and medical leaves to eligible workers for up to 12 weeks in a calendar year.  Using our paid leave economic simulation model, developed across 20 years by economists at IWPR and the University of Massachusetts-Boston and Northeastern University, we found that the costs for benefits and administration for a national program based on the proposed federal FAMILY Act would cost $28.3 billion or 0.47 percent of taxable earnings.  This equates to about $2.44 per week for a worker with average earnings of $54,000 per year, assuming employers and workers share costs equally.

Our estimates rely on the best available data on who takes leave and for how long, whereas some competing estimates make exaggerated assumptions about the prevalence and lengths of leaves. In addition to costs, we also estimate the benefits, such as reduced employee turnover and greater job stability. Research has shown, for instance, that first-time mothers who utilized paid leave were 26 percent less likely to quit their jobs after the birth of their first child.

Using a social insurance model, paid family and medical leave can be implemented at an affordable cost, spread equitably among all employers and workers, and can provide vital benefits to many workers, especially those in lower wage industries, who are the least likely to be able to take time off from work due to childbirth, illness, or caregiving.

The need for a paid leave system has been clear for at least 25 years and we have decades of evidence to guide us. What exactly are we waiting for?

 

Heidi Hartmann, Ph.D., is an economist, MacArthur Fellow, and president of the Institute for Women’s Policy Research. Jeffrey Hayes, Ph.D., is a sociologist and program director on job quality and income security at the Institute for Women’s Policy Research.

Five Ways Washington State’s Recent Paid Leave Law Breaks New Ground

Five Ways Washington State’s Recent Paid Leave Law Breaks New Ground

By Kelly Rolfes-Haase

On July 5, Gov. Jay Inslee signed Washington State’s new Family Leave Act (FLA) into law. Starting on January 1, 2020, eligible employees will be entitled to up to twelve weeks of paid, job-protected leave for qualifying family or medical reasons, capped at sixteen weeks of combined family and medical leave, plus an additional two weeks available to mothers who experience pregnancy-related complications.

Washington joins California (2004), New Jersey (2009), Rhode Island (2014), New York (2018), and the District of Columbia (2020) in putting a state-level paid family leave policy in the books. Compared with these existing state paid leave systems, however, Washington’s law has several key features that make it a pioneer on the paid family and medical leave policy landscape.

Below are five ways in which Washington State’s FLA breaks new ground.

1.      Independent Funding System

In designing their paid family leave policies, California, New Jersey, Rhode Island, and New York were able to build upon the administrative infrastructure of their existing temporary disability insurance (TDI) systems by expanding benefits to cover periods of family care. Because Washington State does not have a TDI system, its paid family leave policy will require the establishment of new administrative architecture and a trust fund for the collection and disbursement of benefits. The new law calls for premiums to be collected starting in 2019, one year prior to when benefits will be available, and for the first two years, premiums have been set at 0.4 percent of an employee’s wages (up to an income limit of around $130,000).[1] Thereafter, the state will set premiums based on the balance in the trust fund account. The premiums are currently set to be shared between employees and employers, with employees paying 63 percent of the premiums and most employers covering the remaining 37 percent.

2.      Greater Coverage for Low-Income Workers

Washington’s law provides lower income workers with a proportionately higher wage replacement rate than higher income workers with the goal of making leave more accessible to all workers.[2] Employees taking leave will receive 90 percent of their wages on earnings at or below half of Washington’s average weekly wage, plus 50 percent of their wages on earnings above Washington’s average weekly wage, up to a maximum benefit (currently set at $1,000/week). This makes Washington State’s family and medical leave payments among the most generous in the country, as existing state programs provide only between 55 percent and 67 percent replacement rates.

Unlike the family and medical leave laws in California, New Jersey, and Rhode Island, eligibility is based on hours worked and not on earnings. The FLA covers all employees in Washington State (with the exception of federal employees) who have worked for at least 820 hours in the last four out of five calendar quarters (about 15 hours per week, on average). In addition, workers who are self-employed may choose to participate in the program as long as they opt in for at least three years.

3.      Maximum Length of Leave

WA State Paid Leave Blog New Law

In addition to the twelve weeks of paid family leave provided through Washington’s law, the FLA also provides employees with up to twelve weeks of medical leave, with the total period of benefits capped at sixteen weeks (or eighteen weeks for women who experience pregnancy-related complications). Washington’s law makes it one of the most generous in terms of the maximum length of family leave available. Although California, New Jersey, and Rhode Island allow for significant periods of medical leave under their TDI systems, they guarantee only four to six weeks of leave for family reasons.

4.      Job Protections

The FLA provides job protections that extend beyond the twelve weeks of protection provided by the FMLA: up to the law’s cap of sixteen weeks of combined family and medical leave (or eighteen weeks for women who experience pregnancy-related complications). The law uses the more stringent FMLA requirements for employer size and hours worked for access to job protection benefits, however, which is estimated to exclude about 40 percent of private-sector workers nationally.

As a result, the FLA’s job-protection benefits are only available to employees working for larger employers (50+ employees) who have worked at least 1,250 hours in the last year.[3]

5.      Support for Businesses

All employers in Washington State (including state and local governments) must participate in the family and medical leave insurance program, although waivers are available for employers that already have private paid family and medical leave programs in place that provide at least the benefits guaranteed under the state law.

The law also provides additional supports for small businesses. First, employers with fewer than 50 employees are not required to pay the employer portion of the insurance premium, although their employees must make contributions and are eligible for paid leave. Second, if small employers choose to contribute to the fund, they may apply for a grant to assist with the cost of hiring a temporary worker or to cover other wage-related costs associated with employee leave. Finally, employers with 150 employees or fewer may apply for the same grants, all of which are funded by the family and medical leave insurance account.

Washington State’s new Family Leave Act represents an exciting development on the state-level paid family and medical leave policy scene. The law’s independent funding system, the progressivity, generosity, and coverage of its paid benefits, the length of leave available, the additional job-protection benefits provided, and its supports for small businesses make the FLA unique compared with existing state policies. Washington’s decision to implement a paid family and medical leave system in the way that it has, to borrow the words of U.S. Supreme Court Justice Louis Brandeis, will make it a laboratory of democracy for the rest of the country to watch and learn from moving forward.

To view more of IWPR’s research, visit IWPR.org


[1] The wage base limit subject to taxation for Social Security

[2] California is set to adopt a more progressive benefit structure starting in 2018, and the District of Columbia’s leave payments will also be progressive once they are implemented in 2020.

[3] In order to receive job protection under FMLA, employees must work for an employer with 50 or more employees, have worked for her/his employer for at least one year, and have worked at least 1,250 hours in the last twelve months.