Paid Medical Leave At A Crossroads
California became the first state to embrace government-backed paid family and medical leave more than a decade ago. Since then, few other states have followed California’s path, and supporters are now considering a different approach.
After lobbying state by state for years, some supporters of paid family leave say it’s time for a federal solution. A proposal in Congress from Democratic Sen. Kirsten Gillibrand of New York would export the models used in California, New Jersey and Rhode Island nationwide. Those are the only three states with their own paid leave laws.
“Historically, and certainly with respect to paid leave, the states have been laboratories,” said Vicki Shabo, director of work and family programs at the National Partnership for Women & Families, which focuses on workplace fairness, health care access and policies to support working parents. “We certainly would hope to see more state innovation, but ultimately I do think that a national solution is the way to go.”
The story of how the campaign for paid leave landed at this juncture has its roots in the federal Family Medical Leave Act. Passed in 1993, the law allows workers to take up to 12 weeks off work each year without pay for a number of reasons: to care for a newborn, to care for an ill family member or if they themselves become sick for an extended period of time.
Looking to build on the law, supporters quickly began to push for paid leave, arguing that many workers couldn’t afford the time off they needed, even if their jobs would be waiting when they returned. A 2012 U.S. Department of Labor survey found nearly half of workers who said they couldn’t take time off when they needed it couldn’t afford to go without a paycheck. Among those who did take time off, 40 percent said they cut the leave short for financial reasons.
California Model
Following passage of FMLA, there were nascent efforts to build a national paid leave program on top of the existing Social Security or unemployment insurance systems, but those foundered. So advocates instead turned to the states.
Nearly a decade later, in 2002, California became the first state in the nation to provide paid family leave.
California’s program is built on the state’s temporary disability insurance program. It pools resources through a 1 percent payroll tax on all workers in the state. Employers don’t pay anything into the fund. It offers workers six weeks of paid time off, paying about half of a worker’s weekly salary — a minimum of $50 to a maximum of $1,075, according to a state formula— after workers file a claim to the state.
The state has paid nearly 1.5 million claims from Californians since July 2004, and the state account that finances the program is projected to have more than $3 billion by the end of this year. The state expects to pay $614 million in leave benefits this year.
A 2010 survey of 253 employers done by the Center for Economic and Policy Research, a liberal Washington, D.C., think tank, found most businesses saw positive or little effect from the law. Back in 2002, it was vigorously opposed by the business community and labeled a “job killer.” But last year, when the state approved an expansion of the program to cover more family members, such as parents-in-law, the state Chamber of Commerce didn’t oppose the move.
Supporters have been disappointed in relatively limited outreach for the program; surveys show less than half of all residents know about it. Ann O’Leary, vice president at Next Generation, a left-leaning think tank in California, said new efforts to expand the law’s scope and spend more on publicity are in the works.
Mixed Bag
The story of paid family leave since 2002 has been decidedly mixed elsewhere. New Jersey passed a similar law in 2008, and it took effect a year later. New Jersey’s program offers six weeks of leave at two-thirds of a worker’s salary, a maximum of $595 each week. Last year, 34,486 workers in New Jersey used paid family leave and received $82.3 million in total benefits. (Outreach is an issue there as well – up to 60% of workers surveyed don’t know about the program).
Rhode Island just passed its law last year, and it took effect earlier this year. Rhode Island offers four weeks, ranging from $72 to $752 a week, depending on the person’s pay.
In Rhode Island, businesses were uniformly against paid leave when it was introduced, said Paul DeRoche, senior vice president of government relations for the Greater Providence Chamber of Commerce. But he said legislation was "watered down" during debate and now businesses are assessing the impact.
Elsewhere, proposals have failed or, in the case of Washington state, collapsed. The experience there convinced advocates that a nationwide approach might be a smarter tack.
Unlike California, New Jersey and Rhode Island, Washington had no state temporary disability insurance program prior to creating its paid family leave. That meant state officials had to build a new program from the ground up, without the dedicated funding and revenue stream the other states enjoyed. So far, state lawmakers have been unable to decide how to fund it, and then-Gov. Christine Gregoire, a Democrat, suspended the program in 2008, despite signing it a year earlier.
The difference among states with regard to temporary disability insurance programs is especially important because only five states have them at all, and three of those (California, New Jersey and Rhode Island) have already passed paid family leave. Supporters are pushing the remaining two — Hawaii and New York.
“New York is kind of a no-brainer,” said Sherry Leiwant, co-president of A Better Balance, a New York-based group that supports paid leave. Efforts failed there this year, but she said trying in other states could pose an even tougher task.
“It’s hard in the states that don’t have temporary disability insurance programs,” she said. “That’s hard for states to do. It’s expensive.”
In a state like Connecticut, which currently has a task force studying paid leave, the lack of a disability program is a hurdle, said Natasha Pierre, policy and legislative director at the state’s Permanent Commission on the Status of Women.
“It’s going to come to political will. You can create a system” she said. “But it will be a huge administrative cost. We haven't even gotten to the point of how it’s going to be funded.”
Another hurdle is the business community, which has long bristled at laws imposing such rules in the workplace. Lawmakers in both parties are often wary of enacting such far-reaching policies that could alter the status quo in the economy as well.
But even among skeptics of policies requiring businesses to allow paid family leave, there’s a recognition that a state-by-state patchwork of laws is less than ideal. That doesn’t necessarily mean those who worry about differing laws among states and cities will push for a national “one-size-fits-all” program, said Lisa Horn, director of congressional affairs for the Society for Human Resource Management, but that there could be room for federal action.
“Navigating those multiple state, federal, and local statutes is where the challenge comes in,” Horn said. Her organization supports companies offering paid leave generally, but prefers incentives for employers to offer it, rather than require it.
“From a human resources perspective, these types of options make a great deal of sense,” she said. “It’s when you start talking about the mandates that it becomes it a challenge.”
Whether any kind of family leave policy could make it through Congress is another matter. The Democratic proposal, part of a raft of similar wage and workplace equality legislation the party is pushing this year, would impose a 0.2 percent tax on workers and employers to pay for it. And it would set up a new federal safety net program at a time when most of the focus in Congress has been on cutting spending.
But with increasing doubt about whether states can deliver on paid leave, advocates are gearing up for a push. U.S. Rep. Rosa DeLauro, D-Conn., is the bill sponsor in the House, with 82 co-sponsors, all Democrats. Four more Democrats co-sponsor Gillibrand’s Senate bill.
“When you look at the trajectory of Family Medical Leave Act, it took 10 years,” said Next Generation’s O’Leary. “It’s a really ripe time to continue to push the conversation. But also there’s that recognition of the difficulties of going state by state.”
Stateline is a nonpartisan, nonprofit news service of the Pew Charitable Trusts that provides daily reporting and analysis on trends in state policy.
