Pension & Benefits News Senate subcommittee explores paid family leave
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Monday, July 30, 2018

Senate subcommittee explores paid family leave

By Pension and Benefits Editorial Staff

At a recent Senate Finance Subcommittee on Social Security, Pensions, and Family Policy hearing, Senate members and other stakeholders examined the importance of paid family leave for American workers. Subcommittee members stressed that there is bipartisan support for paid family leave. Two main strategies were debated: implementing the FAMILY Act (H.R. 947) and using temporary Social Security benefits to provide paid parental leave.

FAMILY Act. According to Sen. Kirsten Gillibrand (D-NY), the FAMILY Act is a comprehensive and fiscally responsible way to provide paid family leave to workers. She noted that the FAMILY Act is an earned benefit that stays with an employee throughout his or her life, no matter where the employee works or lives. The FAMILY Act would provide 66 percent of wages, and it covers all workers, including part-timers. In addition, the FAMILY Act covers birth and adoption, taking care of an older family member, or addressing one’s own personal medical needs. “Three out of four people who take unpaid leave, take it for reasons other than the birth of a new child,” Gillibrand noted.

Vicki Shabo, vice president for workplace policies and strategies at the National Partnership for Women and Families, supported the FAMILY Act, saying that “The FAMILY Act would create a strong, inclusive national paid family and medical leave insurance program and set a nationwide paid leave baseline. … Workers who typically earn low and even mid-level wages would receive two-thirds of their typical wages for [12 weeks]. And people who need to take time away from their jobs would be protected from retaliation when they do.”

Temporary Social Security benefits. The other paid leave strategy mentioned was a plan proposed by the Independent Women’s Forum that would allow new parents to claim a temporary Social Security benefit. Sentators Marco Rubio (R-Fla), Joni Ernst (R-Iowa), and Mike Lee (R-Utah) have expressed interest in this plan.

According to Andrew G. Biggs, resident scholar at American Enterprise Institute, “Proposals to provide paid paternal leave financed by employers, workers, or the government each have potential disadvantages. An alternate approach would allow new parents to claim a temporary Social Security benefit.” He noted that to offset the cost of these benefits, parental leave beneficiaries would agree to a reduction in the value of their future Social Security retirement benefits, such as via an increase in their normal retirement age. “This idea deserves consideration by Congress as a way to help new parents devote additional time to their newborn children at a crucial stage of their children’s lives,” he concluded.

However, several speakers expressed concerns about this proposal. “The FAMILY Act does not create the false choice between covering someone during a medical emergency today, and cutting their Social Security retirement benefits later,” said Gillibrand. “It doesn’t take money from the Social Security trust fund, which would harm the current and future financial security of our seniors.”

In addition, this plan would limit “guaranteed access to paid leave to parents of new children while excluding millions of others who need paid family or medical leave, which will lead to a double-hit for many older workers,” stated Shabo.

SOURCE: https://www.finance.senate.gov/hearings/examining-the-importance-of-paid-family-leave-for-american-working-families

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