Pension & Benefits News Family and medical leave expansion: More federal mandates or encouraging employer-sponsored solutions?
Monday, March 2, 2020

Family and medical leave expansion: More federal mandates or encouraging employer-sponsored solutions?

By Pension and Benefits Editorial Staff

At a House Education and Labor, Workforce Protections Subcommittee hearing on February 11, there was agreement that federal family and medical leave protections should be expanded. The real question, however, was exactly how this should be done: by updating federal law to expand who is eligible for leave, for whom workers can take leave to provide care, and the reasons why workers can take leave; or by fostering an environment that encourages employers to meet the needs of their workers?

Current federal law. The FMLA currently gives eligible employees of covered employers the right to take unpaid, job-protected leave for specified family and medical reasons, with continuation of group health insurance coverage under the same terms and conditions as if the employee had not taken leave. To be eligible, the employee must have worked for the employer for 12 months and have worked 1,250 hours in the year before taking leave. The employee also must work at a location at which the employer has at least 50 employees within a 75-mile radius.

Eligible employees are entitled to take 12 workweeks of unpaid leave in a 12-month period for:

  • · The birth of a child and to care for the newborn child within one year of birth;
  • · The placement with the employee of a child for adoption or foster care and to care for the newly placed child within one year of placement;
  • · To care for the employee’s spouse, child, or parent who has a serious health condition;
  • · A serious health condition that makes the employee unable to perform the essential functions of his or her job; or
  • · Any qualifying exigency arising out of the fact that the employee’s spouse, son, daughter, or parent is a covered military member on "covered active duty."

Eligible employees may also take unpaid military caregiver leave: 26 workweeks during a single 12-month period to care for a covered servicemember with a serious injury or illness if the eligible employee is the servicemember’s spouse, son, daughter, parent, or next of kin.

Search for solutions. Framing the scope of the hearing, Subcommittee Chairwoman Alma Adams (D-N.C.) said in her opening remarks: “Today, we will discuss how we can fulfill the promise of the FMLA by updating federal law to expand who is eligible for leave, who workers can take leave for, and the eligible reasons why workers take leave.” She also said the discussion would include potential legislative solutions, such as the FAMILY Act, which provide wage replacement for all workers so they can remain financially stable while on leave.

“At the end of the day, this hearing is about making sure we can sustain our careers and livelihoods while giving ourselves and our loved ones the care needed to thrive,” Adams said.

The Chairwoman also noted that in 1993, Congress took an important step toward establishing comprehensive leave when it passed the FMLA. “Unfortunately, 27 years later, we have failed to build upon that legislation,” she said. “As a result, federal law still leaves many workers without the right to take unpaid leave or unable to afford unpaid leave where they are eligible.”

Too many workers excluded. Current federal protections do not extend to everybody who may need family and medical leave. “Workers are often excluded from the FMLA by a layered system of requirements that restricts who is eligible to take leave, for whom workers can take leave, and the reasons for which workers can take leave,” Adams explained.

Alone, the restrictions that require an individual to work for a covered employer, to have worked for the employer for 12 months, and to have worked 1,250 hours in the year before taking leave, “leave out 44 percent of private sector workers—or 49 million workers—from the FMLA,” according to Adams. “They also disproportionally exclude low-income workers, working parents, and workers of color, who face higher rates of job turnover.”

Adams also pointed to other gaps in the FMLA:

· Even if a worker can take FMLA leave, federal law does not guarantee coverage for all family members and caregivers. LGBT couples, domestic partners, and the 2.9 million grandparents exclusively raising their grandchildren still face a patchwork of policies that allow them to take leave in some states, but not others.

· While the FMLA covers personal, infant, and family health needs, it does not cover a wide range of other reasons that workers might need to take leave, including parents taking time to be more involved in their children’s schooling, individuals donating their organs to save lives, or family members taking time to grieve a child’s death.

· Even if workers fulfill all FMLA requirements, most workers may not be able to afford to lose their wages because the FMLA does not cover lost wages during leave. Nearly half of those eligible for FMLA cannot afford to take it, and nearly two-thirds of those who can still report financial difficulties.

Need for leave clear. In prepared remarks, Subcommittee Member Ben Cline (R-Va.), agreed that employees need to be able to take family and medical leave. “Balancing a career and a family can be a challenge for many workers, especially when life-altering events, like the birth or adoption of a new child, or a serious illness occur,” he said. “Allowing workers to take time away from their jobs during these moments ensures that these employees can remain in the workforce.”

Tax credits and retirement account borrowing. Cline noted that congressional Republicans “have encouraged workplace flexibility and support for working families through the paid family and medical leave tax credit, which rewards businesses that provide paid leave benefits, and allowing new parents to borrow from their private retirement account following the birth or adoption of a child, free from penalty.”

Employer-provided options. Another solution to the problem comes from employer-provided options, which are on the rise, according to Cline. “While the FMLA has helped many workers balance work and family, there are an ever-growing number of employer-provided options that Congress should continue to recognize,” he said. “In fact, many businesses already provide robust leave options for their employees to help ensure a positive and productive workplace. Family-friendly policies have become an important tool for companies to attract and retain quality employees in our competitive job market.”

Cline cited data from the Society for Human Resource Management showing that the percentage of firms offering paid maternity leave nearly tripled between 2014 and 2018. “The Bureau of Labor Statistics reported that 66 percent of wage and salary workers had access to paid leave in 2018—up from 60 percent in 2011,” he said.

“Companies know they need to understand their current and prospective employees’ workplace concerns and be prepared to address them,” Cline continued. “Congress should allow our nation’s employers the flexibility to develop and offer personalized solutions that work best for their employees and themselves.”

"One-size" solution not the answer. Cline also provided a few words of warning: “As this Committee examines the issue of family and medical leave, we should avoid implementing one-size-fits-all solutions, and instead focus on how we can foster an environment that encourages employers to meet the needs of their workers.”

“Bottom line, Congress should avoid burdening the American taxpayer and employers through additional Washington-knows-best, federal mandates when the private sector is already innovating solutions that create workplace flexibility for employees,” according to Cline.

Rachel Greszler, Research Fellow in Economics, Budgets, and Entitlements at the Heritage Foundation, echoed Cline’s concerns. “Unfortunately, government mandates and regulations can cause employers to replace compassionate and commonsense policies with rigid one-size-fits-all rules or programs that impose unnecessary costs and have unintended consequences,” she said.

FMLA downsides for employers. Greszler discussed some of the negative impacts that the FMLA and paid family leave have had on employers. Having talked with multiple employers and HR representatives about these issues, “the resounding consensus was that employers feel strongly that it should be up to them to determine the types of relationships and medical and family needs for which they will allow their employees to take leave, and in which instances they will pay them while on leave,” she stated.

“Employers’ ability to respond to employees’ needs varies significantly across industries and employer sizes,” Greszler explained. “Large employers in the retail industry may have enough employees to shift duties to other workers with relatively little consequence and cost. But smaller employers and more specialized industries have a harder time adapting.” She also noted that the burden of employees’ absences can have a large negative impact on companies’ operations, which also spills over to consequences for its customers.

Skill and licensed professionals. Greszler in addition pointed to the many industries and positions that require skilled or licensed professionals, who are extremely difficult, if not impossible, to replace on short notice. Talking about her own children’s daycare, she said there were about 20 children and eight employees. “If one or more teachers were to go on FMLA leave, they would not have enough staff to fulfill the required child-to-teacher ratios, and because of the background checks, and lengthy education and licensing required, temporary fill-ins are not really an option,” Greszler said. “In fact, my children’s daycare center once had to shut down for an entire week when two employees were absent. This meant that about 15 families had only three days of notice to find substitute child care for an entire week.”

Turning to the medical field, Greszler said “absences can be particularly harmful—even life-threatening.”

FMLA expansion combined with paid leave. According to Elisabeth Jacobs, Senior Fellow at the Urban Institute, states have taken the lead in “showing that expanded FMLA policies in combination with paid leave policies can work." She noted that California, Connecticut, Massachusetts, New Jersey, New York, Oregon, Rhode Island, Washington, and the District of Columbia have enacted paid family and medical leave laws that give workers the right to accrue replacement wages for parental, caregiving, and medical leave.

“All these policies follow the model originally set out by California in the implementation of its first-in-the-nation public paid family and medical leave program in 2004, using a social insurance design that allows workers to earn benefits based on accrued total wages,” Jacobs stressed. “As a result, the benefits are fully portable, as they are not tied to any one employer.”

Jacobs said that all of these policies cover parental, medical, and caregiving leave. Many also provide new job protections along with wage replacement, or are layered on top of existing state laws providing job protections beyond those offered by FMLA. “Taken together, these state programs show that public paid family and medical leave policies that use a social insurance model combined with job protection can effectively support workers and their families with minimal disruption to business and at a manageable cost to government, particularly in light of the potential longer-term economic benefits,” Jacobs suggested.

Leveling the playing field. But the patchwork of state protections creates unnecessary competition between states in terms of attracting employers. "A federal program with uniform eligibility requirements and benefit schedules would eliminate the existing unevenness between the states, and it would create a level playing field for state finances, for employers, and for workers," according to Jacobs. "Where one lives and works in the U.S. should not determine the availability of essential protections against economic shocks."

Jacobs also said that states should not have to compete against one another to lure employers based on the presence or absence of public benefits or regulations. A federally administered system "would be

substantially more efficient to administer than 50-plus separate state and local programs," she explained. "Unified IT systems, data collection, and staffing would create fundamental efficiencies that would accrue to beneficiaries, employers (especially multistate employers, who currently must comply with a dizzying array of varying state regulations and policies), and the public in the form of administrative cost savings.”


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