Paid Family Leave Gets New Momentum in States

Politics and funding have often stymied the legislative push to pay employees forced to take time off to care for newborns or sick family members. But attitudes about work-life balance are shifting.
by | September 2015
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In 2006, John de Graaf was in the middle of turning the book The Motherhood Manifesto, which chronicled some of the harder choices working mothers face, into a documentary film. As part of his research he met Selena Allen, a mother who had delivered her baby boy six weeks prematurely and couldn’t afford to take off more than four weeks -- cobbled together using vacation and sick time -- from her job. Not knowing how long their son would be in intensive care at the hospital, Allen and her husband decided that her time off would be best spent when the baby came home. That meant that Allen, who gave birth on a Thursday, was back at her desk Monday morning with a heavy heart and a premature baby in a hospital in Seattle, some 20 traffic-clogged miles from her home in Kent. The commute to see her baby after work and the rush home to pick up her older son at daycare added to the stress.

“It was a terrible story; I couldn’t believe it,” says de Graaf, who wanted to use the documentary, also titled The Motherhood Manifesto, to increase awareness about the need for paid time off for families with new babies or loved ones who unexpectedly need care. While Allen’s story is extreme, it highlights the struggle many Americans go through when faced with the choice between work and a family emergency. At the time Allen had her baby, only California had a state program that helped replace the income workers lost when they took a family-related leave of absence. Allen and the rest of American families had to rely on the federal Family and Medical Leave Act (FMLA), which was considered breakthrough legislation when it was passed in 1993. FMLA guarantees that workers’ jobs will not be lost if they opt to take time off for a family-related event. Workers are covered for 12 weeks of absence, but the law does not provide any financial support during that time and most employers don’t offer paid time off to care for a loved one. For too many, unpaid leave isn’t an option. Ten percent of those who use FMLA are forced to turn to a public assistance program to cope with the loss of a paycheck.

FMLA has other drawbacks. It only applies to businesses with more than 50 employees and to workers who’ve been at their jobs for at least a year, which means the law excludes two-fifths of the workforce. Among those who are eligible, fewer than 1 in 5 use FMLA, according to a recent survey by Family Values @ Work, a multistate consortium pushing for paid leave.

Given the limits of the federal law, advocates have been turning to the states. In 2007, when Washington state considered a paid family leave bill that would provide $250 in weekly replacement wages, Allen addressed the legislature in support of it. “I worked in the early childhood education field; I was surrounded every day by the research citing how important those first days are for bonding and lifelong learning,” Allen testified. And yet she was forced to miss out on much of that time. She told the legislators that the $250 financial cushion would have allowed her to stay with her baby in the hospital. “It broke my heart that I could not be with my son when he needed me so much,” she said. “These were, by far, the most difficult days of my entire life.”

Selena Allen’s son, Connor, was born prematurely. She could not afford to take the time off to say with him in the intensive care unit at the hospital. (AP)

Ultimately Washington passed the bill, but lawmakers stripped it of a payroll tax that would have funded it. With the general election a year away, lawmakers were “terrified that if they talked about a tax increase of any kind -- even just a few cents -- they’d lose the next election,” says de Graaf, who is also president of Take Back Your Time, a paid leave advocacy organization. Nearly a decade later, the program has yet to be implemented.

Several states interested in similar paid leave bills have also been stymied by politics, funding or both. Since California passed its law a decade ago, just two other states have launched their own programs: New Jersey in 2009 and Rhode Island in 2014. But that could be changing. Shifting views about work-life balance, particularly powered by the millennial generation, have softened the political stigma that pigeonholed paid family leave as a women’s issue. Data from existing paid family leave programs are fortifying arguments that such programs are not harmful to business. The other big barrier to adopting paid family leave -- how to pay for it -- could also be weakening as the federal government offers states grant money to study ways to create and fund programs. Many advocates for paid leave believe the next few years could be pivotal for passage in several states across the country.

When California passed its paid family leave program in 2002, many supporters hoped it would be a model for others. The law is financed by an employee payroll tax and lets workers take six weeks off to care for a newborn, newly adopted child or ill family member. Employees can receive up to 55 percent of their wages during that time.

New Jersey followed seven years later with family leave insurance benefits, which replace two-thirds of a worker’s wage for six weeks of leave. Rhode Island’s Temporary Caregiver Insurance program, which launched last year, offers four weeks of paid leave. The insurance pool pays a minimum of $84 and a maximum of $795 per week, depending on the worker’s earnings.

These states are three of five that currently collect a temporary disability insurance payroll tax. Hawaii and New York are the other two. These states already have much of the financing infrastructure in place to start paid family leave programs. The states are also able, if necessary, to increase the underlying tax to keep up with the new expenses. After the program’s first year, the Rhode Island Department of Labor and Training kept the disability tax rate at 1.2 percent. The new insurance had caused about an 11 percent bump in claims, reports Deputy Administrator Ray Pepin, but the program had enough in cash reserves to cover it.

With a financing infrastructure already set up, these states were instead able to focus on winning over the business community. Rhode Island state Sen. Gayle Goldin, author of the state’s paid family leave legislation, says that while she didn’t win support from the Providence Chamber of Commerce, she was able to get small businesses to help push her bill through the legislature. It passed with healthy majorities in both houses. “The reality is that here and everywhere else, those trade associations are only representing a portion of the business sector,” Goldin says, adding that small businesses couldn’t compete with larger ones on benefits like paid leave. “We had small businesses in Rhode Island saying, ‘I want my employees to be able to take this leave, but I can’t afford to pay them for that.’”

It’s been a different story 170 miles away in Albany, N.Y., where paid family leave has remained an elusive goal for the past 15 years. The business lobby has been a powerful force there, arguing that it would cost businesses overtime pay to cover absent workers’ schedules. The result would be increased personnel costs and diminished morale for those who pick up the slack, according to a memo issued by the Business Council of New York State. Groups like the Society for Human Resource Management and the National Federation of Independent Business have fought paid family leave in New York and elsewhere, framing it as “yet another entitlement program” during a time when businesses and state governments are still struggling after the Great Recession.

Sherry Leiwant, co-founder of A Better Balance, a nonprofit legal advocate for work-family balance issues, says the closest her group got to advancing paid family leave in New York was in 2008 with Gov. Elliot Spitzer’s administration. The discussions abruptly came to a halt, however, when Spitzer got caught up in a prostitution scandal and resigned. “So it’s been political and it’s also been bad luck,” says Leiwant.

In the 45 states without temporary disability insurance, funding a paid leave program remains the primary obstacle. In Washington, the intention was always to revisit the 2007 bill’s funding issue. But the Great Recession created a budget crisis and the program was shelved. There have been attempts to revive it, but many balk at what state Sen. Karen Keiser, who sponsored the bill, estimates is $15 million to $20 million in startup costs.

Advocates hope that recent data on the effectiveness of paid leave will eat away at “bad for business” arguments. A 2011 study of California’s family leave insurance program found that most employers reported either a positive or no noticeable effect on productivity. Small businesses were less likely to report any negative effects. Similarly a 2014 study on New Jersey’s program found that none of the participating employers reported any change in productivity or turnover.

When conducting field interviews for the California study, co-author Ruth Milkman says she expected that employers would struggle most with how to cover a worker’s absence. But her interviews revealed that experienced business owners already had a contingency plan in place for an employee’s extended absence. “The business opposition is based on incorrect assumptions,” says Milkman, a sociology professor at the City University of New York Graduate Center. “Hopefully more and more people are aware of that now.”

Long seen as a women’s issue, paid family leave is now increasingly becoming a work-life balance issue. In California, women’s support on the 2002 legislation was matched by a vocal group of young fathers and “sandwich generation” workers who were responsible for caring for aging parents. AARP has lobbied for paid family leave so workers can take time to care for their older parents without putting themselves financially at risk. As income inequality has grabbed more national headlines, arguments have been made that poor families are the greatest beneficiaries of paid family leave since their access to any paid time off is minimal.

Several presidential candidates, mostly Democrats, have also been weighing in on the topic, and some hope that means paid family leave will get a national airing during next year’s election, just as the FMLA idea did during the 1992 presidential campaign.

Meanwhile, study after study has shown that the millennial generation, which is now the largest population bulge in America, places a high importance on work-life balance. Some are even willing to take less pay to achieve that. “It’s only very recently that it’s been reframed as this argument that the workplace is very much organized and designed for the 1950s and nobody really works that way anymore,” says Brigid Schulte, author of Overwhelmed: Work, Love and Play When No One Has the Time. “It’s taken a very long time for that conversation to come through.”

But perhaps the most important change in recent years has been with finances. More than a dozen states were considering paid family leave after California launched its program. But then the recession turned the issue into a nonstarter in states that didn’t have a temporary disability insurance program in place. Now, with most budgets stabilized, many see states picking up where they left off. Connecticut, New Hampshire and Vermont have established task forces to study the issue. Bills have been proposed in Colorado and Massachusetts. Some cities, including Washington, D.C., and St. Petersburg, Fla., are instituting paid leave polices for their own workers and encouraging local employers to do the same.

Most recently, a substantive push from the Obama administration is helping more states study the issue. Last year, the administration awarded a total of $500,000 in grants to the District of Columbia, Massachusetts, Montana and Rhode Island so that they could come up with a way to create programs. This year, the federal grant pool more than doubled to $1.25 million.

All told, 18 states have considered legislation or studied the issue, says Ellen Bravo, executive director of Family Values @ Work. She expects that list to increase after the winners of this year’s federal grants are announced. With that momentum, she predicts the number of paid family leave programs could double in the next few years to include Connecticut, New York and the District of Columbia. Movement on that level could be enough to spur federal action, just as it did when early state action on family leave moved Congress to pass FMLA. “We have three states now -- that’s millions of people with access to paid family leave, and that builds upon the momentum that you’re not alone,” says Rhode Island’s Goldin. “It’s not a personal problem you’re trying to deal with. It’s a systemic issue. The politics are finally catching up with the will of the people.”