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Home Publications Blogs CEPR Blog The Family and Medical Leave Act at 20, Part 3

The Family and Medical Leave Act at 20, Part 3

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Written by Eileen Appelbaum   
Monday, 25 February 2013 09:30

In Part 1 of this series we saw that two decades after passage of the FMLA, about a third of all workers (34 percent) still have not heard about the Act. More surprising, perhaps, is the finding that a significant share of employers who are covered by the FMLA do not comply with all of its provisions. Nearly a quarter of work sites subject to the FMLA, employing nearly a tenth of all workers (9 percent), do not know that the FMLA applies to them.  Twenty percent of work sites covered by the FMLA do not permit employees to take leave for one or more FMLA qualifying reasons for leave. Nearly a third of workers are employed at these work sites.  A greater emphasis on outreach, education and enforcement can increase the number of employees able to take a family or medical leave.

In Part 2, we saw that 20 years of experience with the FMLA has created the beginnings of a culture change among employers. Many businesses that are too small to be covered by the FMLA either believe that they are covered and offer leaves for FMLA-qualified reasons to their employees or, even knowing they are not required to do so, allow workers to take leave for many of the FMLA-qualified reasons.

FMLA leaves are unpaid, creating undue hardship for many families when leave is necessary. This blog examines what we can learn from the employer and employee surveys about paid family and medical leave.

Family and Medical Leave Insurance

The U.S. is the only high-income country without a national program of paid family and medical leave. Out of 178 nations, it is one of only three that has no national program of paid maternity leave; the other two are Papua New Guinea and Swaziland. Some employers provide pay to workers who take a family or medical leave by letting them draw on paid sick days, paid vacation or other paid time off, or via short or long-term disability insurance. Other research has shown that it is mainly professional and managerial employees that have access to these employer-provided benefits. While paid sick days and paid vacations are basic employment standards that employers should provide for all employees, this is not the case for the more extended family and medical leaves. Paid family and medical leaves are best handled through a family leave insurance program.  

According to the employer survey, half (49.9 percent) of all work sites, employing more than a quarter (25.9 percent) of all workers, provide no pay during a family or medical leave.  Workers employed by small businesses not covered by the FMLA are especially vulnerable – nearly half of these workers receive no pay while on FMLA leave. More than a third (34 percent) of workers in the employee survey who took a family or medical leave reported that they received no pay. Most workers in jobs with low pay and status lack access to employer-provided pay during leave.  Workers in families with income below the median family income – those most in need of income during family leave – were most likely to receive no pay from their employer during an FMLA leave: More than half (53.5) of these workers received no pay compared with less than a fifth (17.6 percent) of workers in households with family income above the median.  Workers who received pay from their employer while on leave mainly cobbled the funds together from paid time off, paid sick days, paid vacation, and paid personal leave – benefits that accrue largely to higher paid employees.

Workers engaged in a variety of strategies to cover lost wages during leave, often using more than one. Among all employees who took leave for an FMLA-qualified reason, whether employed at a work site covered by the FMLA or not, about 85 percent of leave takers cut their spending. Those that had savings used them. Other strategies included borrowing (30 percent), going on welfare (15 percent), putting off paying bills (36 percent), and cutting the leave short (31 percent). Employees at small businesses were even more likely to go on welfare (20 percent) or fall behind on their bills (41 percent) than those employed at work sites with 50 or more employees. More than half (52 percent) of all employees found it very difficult or somewhat difficult to make ends meet during leave.

A national family leave insurance program would provide workers with income during a family or medical leave – including those least likely to receive pay provided by their employer.  It would begin to address the gap in access to paid leave between high- and low-paid workers.

For employers who already provide generous benefits to workers on a family or medical leave, a national family leave insurance program can result in significant cost savings. Employees could collect family leave insurance payments and employers would only need to ‘top off’ the insurance benefit. Half of employers report rising costs of administering the unpaid Family and Medical Leave Act. Potential cost savings from coordinating with a paid family leave insurance payment could address this issue.

The experiences of employers in California, which has state programs that allow workers to collect pay when they take a medical or family leave, show that these programs can make a positive difference in the lives of people without imposing undue costs on employers, many of whom may actually benefit. California (and New Jersey) provide path-breaking and positive examples that can be replicated in other states and nationally.

Tags: employers | FMLA | paid family leave | work/life | workers

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