Paid family leave: understanding the basic parameters

Last Wednesday Council member Lorena Gonzalez held a committee hearing on paid family leave. While it didn’t provide much in the way of direction, it did help to clarify what the parameters are in a paid family leave policy, and the presenters brought forth a tremendous amount of useful data about what other cities, states and countries are doing.

Patricia Lee from the Council’s central staff, presented her research on leave practices in other jurisdictions in the form of a big spreadsheet. The Council also heard from Jared Make, a senior staff attorney for A Better Balance, a legal advocacy non-profit looking at labor and workforce issues, who was able to provide further commentary on the trends in parental leave policy.

There are six major questions that need to be answered to shape the policy:

  1. How many weeks of paid leave?
  2. Is the leave time in addition to existing vacation/sick time, or do they run concurrently?
  3. How much pay do they receive while on leave?
  4. What are the circumstances in which the employee qualifies for paid leave?
  5. Is the policy just for city workers, or does it extend to private sector employees as well?
  6. How is it paid for?

Let’s take them one at a time.

How many weeks of paid leave? Private tech companies, who are in fierce competition with each other for recruiting and retaining employees, have been setting the high bar for this. Locally, Microsoft offers 12 weeks of parental leave, plus up to an additional 8 weeks of disability leave to the mother if needed to recover from childbirth. Google, Facebook, and other tech companies have similar policies.  In the public sector, New York City and Portland offer six weeks of pair parental leave, and the District of Columbia offers eight weeks of paid leave.  Many jurisdictions offer just the basic package: up to 12 weeks of unpaid leave as required by the Family and Medical Leave Act, which is essentially “job protection” — if you need to take time off after a child is born, you will have a job to come back to (even if you’re not being paid while on leave).  And an increasing number off around six weeks of paid leave (Seattle currently offers four).  There is significant pressure to get to 12 weeks, backed up by research by the American Academy of Pediatrics suggesting that infants should not be put into childcare before 12 weeks, and other medical research showing that 12 weeks of paid leave improves child health outcomes by ensuring regular doctor checkups and time for parent-child bonding, breastfeeding, and other important parental duties.

Is parental leave taken concurrently with other vacation/leave time? Basically, does taking parental leave exhaust your sick days and/or your vacation time? Or your unpaid leave under the Family and Medical Leave Act (FMLA)? There isn’t a clear pattern here.  Labor advocates of course argue that they shouldn’t be concurrent, and for some good reasons — if someone has a baby in January and takes parental leave, they might exhaust their sick days for the rest of the year (and let’s face it: ALL parents of infants get sick from time to time). But this needs to be balanced against the burden it places on employers to have a valued employee out for extended periods of time (even assuming the cost of paid leave is somehow mitigated). King County aims for a middle ground, requiring employees to exhaust all but 40 hours of their accrued sick and vacation time.

How much pay do they receive? The four states that offer paid leave to their own employees (New Jersey, New York, Rhode Island and California) generally offer partial wages. Cities that offer it tend to pay the full 100%, thought Boston and San Francisco are exceptions. At the country-level it’s a mix of full and partial wages.

countries

This is a very important question because research shows that new parents are often under heightened financial strain, and unsurprisingly the amount of parental leave taken correlates with the amount of pay received: the more you get paid, the longer you can afford to take off.

What qualifies for paid leave? Mothers giving birth is a universally-qualifying event. In many cases that extends to adoption or taking a foster child, and increasingly parental leave is extended to fathers as well. Where it gets more interesting is when leave is provided for the support of a family member — for example an elderly parent, a spouse, or a child — who is sick and needs a caregiver. In his presentation, Make took it even further, noting that according to the 2010 census nearly 80% of households don’t fit into the “nuclear family” model; there are multi-generational households, many with extended family, and some with people permanently in the household who are not related by blood or marriage. Casting the net broadly might raise concerns about the cost, but the data points to family caregiving being a very small percentage of all cases of employees taking paid leave:

family leave share

Some jurisdictions are broadening the definition even further, to grandparents, grandchildren, siblings and more. But once again, the data collected so far shows those to be a tiny percentage of the total leaves:

family member def

So there is very little downside to defining the qualified “family members” broadly.

Is this just for public employees, or does it extend to employees of private organizations as well? While the FMLA mandates unpaid family leave for all public employees and those working for organizations with at least 50 employees, only one jurisdiction requires private employers to provide paid family leave: San Francisco. According to Make, more are now discussing it but have yet to take action. Nationally only 12% of private sector employees have access to some form of paid family leave benefit. Obviously the expense is a major factor. Which brings us to…

How do you pay for it? Many jurisdictions are modeling it as an employee-funded extension of disability insurance, where employees pay into an insurance pool which distributes the cost and the risk. The four states with paid family leave all model it that way. Council member Gonzalez recalled a previous suggestion that it could be structured as a “progressive benefit” where  a low-wage worker might receive 80% wage replacement, while someone making a 6-figure income would only receive 60%.

Based on the data and the testimony, you can start to imagine an ideal policy: 12 weeks of paid leave with 100% wage replacement, not concurrent with other accrued sick, disability, or vacation time; employees (both male and female) can use it for a newborn child, an adoption, a foster child, or to care for a family member (defined very broadly). This is mandated for all employees, both public and private.

Of course, the ideal policy is also the most expensive policy. The City Council will need to trade off the policy features it wants against the price tag. It will also need to decide on who pays for it, split across employees, their employers, and the government itself (through funds raised from taxing employees and/or businesses).  It can play this either way, by first picking the policy it wants then dividing up the check as it sees fit, or by deciding how much money it believes it can raise then seeing what kind of program it can buy for that figure. My guess is that it will be a little of both. The hard work on costing it out hasn’t really begun (or is happening behind closed doors), but with separate efforts to raise B&O taxes and business license fees to pay for labor law enforcement, the tolerance for additional taxes and fees might be low.

The good news is that the Council is becoming well-informed on a challenging topic before trying to design their own system. But there is much work still to be done, and we can expect this conversation to continue in Gonzalez’s committee meetings for several weeks, if not months, before a draft policy appears.

Liked it? Take a second to support SCC Insight on Patreon!