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An important consideration when designing a new paid family and medical leave policy is how any policy fits in the context of the current system. Since 1993, the federal Family and Medical Leave Act (FMLA) has provided unpaid, job-protected leave to care for a new child, an ill family member, or one’s own serious illness. However, in the absence of a federal paid leave policy, a patchwork of employer-provided paid leave has grown, along with a handful of state programs. Together, these existing systems provide paid family and medical leave to many workers, but their coverage is far from complete. Where are the gaps in the current system, and how might different policies address these shortcomings?
The Bureau of Labor Statistics estimates that 15% of workers have access to defined paid family leave, which includes parental and family care leave, as of March 2017. Those who need time off to care for their own serious illness may have access to paid disability leave. The BLS estimates that 39% of workers have access to short-term employer-provided disability insurance, which typically can last up to a year. Workers also have access to other forms of pay that they can draw upon while on leave, including paid sick leave (72% eligible) and paid vacation (74% eligible). And of those who take leave, two thirds receive at least some pay, with nearly half of all leave-takers receiving full pay. A new report from the American Action Forum explores this in great detail. Of those who were paid while on leave, they most frequently used general paid time off, personal days off, and sick leave; relatively few actually drew upon a defined parental leave benefit.
While these statistics are reassuring, they do not tell the entire story. First, in order to qualify for the job-protected unpaid leave under the FMLA, an employee must have worked at least 1,250 hours over the past 12 months at the same worksite, and the employer must have at least 50 employees within 75 miles of the worksite. These requirements are intended to avoid harming small businesses and limit job protection to those with a proven attachment to their employer. The FMLA requirements are fairly strict; only 59.2% of workers met them in 2012, and lower-income workers typically have lower eligibility rates.
In addition to less job protection on leave, low-wage workers are also less likely to have access to pay while on leave. According to the 2012 FMLA report, 53% of those with family income below the median received no pay while on leave. A report last year from Pew Research found similar overall rates of pay while on leave, and that 62% of households with incomes below $30,000 received no pay while on leave. According to the AAF report, among workers with incomes below $30,000, only 34% received pay during medical leave, 49% during family care leave, and 18.7% during parental leave.
These numbers contrast sharply with the much higher rates of paid leave availability among higher-income workers, management and professional services workers, and workers at firms with at least 500 employees. Among those with family income of at least $75,000, 84% who took leave received pay during their leave.
Workers who received no pay or partial pay while on leave used a variety of methods to cope with the loss of income. According to the FMLA report, some could maintain their standard of living by drawing upon savings earmarked for this leave (which 48.3% did), by drawing upon other savings, or by borrowing. But many Americans have not saved enough for an extended period out of work, causing 36.5% of these people to put off paying bills, 14.8% to go on public assistance, and 31% to cut their leaves short. Unsurprisingly, 84.4% of these people reduced their spending.
Importantly, these analyses of who receives pay while on leave omit those who needed leave but did not take it. The FMLA report estimates this group represents only 4.6% of those who needed leave, but this rate of unmet need for leave is unsurprisingly highest (at 8.2%) among those with income under $35,000. Almost half of these workers with unmet need for leave reported that they could not afford an unpaid leave, and 17% attributed it to the fear of losing their job.
These numbers clarify several challenges to overcome in thinking about a federal family and medical leave policy. How do we target it to the workers that are falling through the gaps? How might we encourage employers to fill in these gaps in coverage, especially for their lowest-wage employees? And how do we keep costs in control, and minimize the negative impact on businesses, as we expand coverage? In our AEI-Brookings Working group report last year, we offered policy recommendations for a federal paid parental leave program. This summer we hope to follow up with suggestions on family and medical leave policy. There may be no magic bullet, but thoughtful debate may help push us forward on this issue.
Aparna Mathur is a resident scholar in economic policy studies at the American Enterprise Institute. Cody Kallen is a research associate at the American Enterprise Institute.
In our AEI-Brookings Working group report last year, we offered policy recommendations for a federal paid parental leave program. This summer we hope to follow up with suggestions on family and medical leave policy.
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