Economic Intelligence (U.S. News & World Report), February 4, 2013
Tuesday, February 5, marks the 20th anniversary of the federal Family and Medical Leave Act, passed with bipartisan support in Congress and signed into law by President Bill Clinton in 1993. In the 20 years since passage, the FMLA has been used more than 100 million times by women and men who needed a family or medical leave.
Yet, as we celebrate what the FMLA has achieved, we need to recognize that it was always intended as an important first step in making it possible for people to be responsible employees and good parents and family members. Much unfinished business must still be addressed if the FMLA is to live up to its promise. Most non-college educated workers and others in jobs with low pay and status lack access to employer-provided disability insurance or paid family leave. The result is that millions of Americans are regularly forced to choose between economic security and providing vital care for their families.
In Unfinished Business, a forthcoming book coauthored with Ruth Milkman, we examine employer and employee experiences with California’s paid family leave program. The fears of business groups that it would impose a financial burden on employers and would lead to fraudulent claims and abuse proved to be unwarranted. Our 2010 survey of California employers found that 87 percent reported that the PFL program had not resulted in any cost increases; some reported cost savings by reducing employee turnover and/or reducing their own benefit costs when they coordinated generous company benefits with the state program. Nine out of ten employers – including small business owners – reported either positive effects of no effect of PFL on business operations (see Table 1). As for abuse, 91 percent of employers were aware of no abuse by their employees, and among the other 9 percent it was a relatively rare occurrence. About 61 percent of employees had a co-worker take a family leave and most took on additional tasks or hours to get the work done. Yet 94 percent reported that this had either no impact or a positive impact on them – with a quarter reporting a positive impact. Business fears about the effects of paid family leave on small businesses and on co-workers turned out to be unfounded.
For people, California’s PFL program has led to better economic, social, and health outcomes for those who have used it. Wage replacement levels were significantly higher for workers who used PFL than for those who did not, especially for workers in low-quality jobs (see Table 2). Moreover, workers in low-quality jobs who used PFL were more likely than those who did not use the program to return to the same employer after a family leave, were more satisfied with the length of their leave, were better able to care for newborns, and were better able to make child care arrangements.
Our findings suggest that programs that support workers when they need to care for their families can make a positive difference in the lives of people without imposing undue costs on employers, many of whom may actually benefit. The PFL and TDI programs in California and New Jersey provide path breaking and positive examples that can be replicated in other states and nationally.