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Home Publications Op-Eds & Columns Paid Family Leave is a New Jersey Success Story

Paid Family Leave is a New Jersey Success Story

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Eileen Appelbaum
NJ.com, July 7, 2014

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There are few more important moments in a person’s life than when a family member needs care — whether a new baby is born or adopted or a parent, child or spouse falls seriously ill or has an accident.

Yet many Americans find themselves having to choose between providing that care and maintaining their paychecks. Helene Jorgensen and I analyzed the 2012 U.S. Department of Labor survey and found that one in four workers who needed family leave and was eligible didn’t take the leave, and nearly half reported that they couldn’t afford unpaid time. Among those who did take some time off, 40 percent said they cut the leave short for financial reasons.

That’s why the need for access to paid family leave was a major topic at the first-ever White House Summit on Working Families last month — and why New Jersey’s landmark family leave insurance program was a topic of discussion.

The law allows workers to take up to six weeks of paid leave to care for new babies, seriously ill relatives or themselves. The program is paid for by a small employee deduction — no more than 60 cents a week.

As the legislation was debated, opponents said it would hurt small businesses and be a job-killer. My colleague Sharon Lerner and I recently asked New Jersey businesses what effects they actually experienced during the first five years of the program.

We analyzed responses to confidential interviews of employers and human resources personnel at New Jersey companies ranging in size from 26 to 36,000 employees. Most were small businesses.

None of the participating employers reported that the program affected their productivity or turnover, and 89 percent reported no negative impact on profitability.

A majority of employers experienced no increase in paperwork due to administration of the program, although some reported a small to moderate increase.

Despite fears that the program would be abused, no employers were aware of any instance of abuse.

At the same time, many employers reported positive effects from the program, including improved morale.

As the human resources manager of an electronics company reported, paid family leave “helps people when they are at their most vulnerable” and benefits the employer when the employee returns to work. “Once they are back here, they are focused, not putting together pieces of the things that have fallen apart (in their life) while they were out. They can really jump back in.”

Up to December 2012, the last date for which data are available, New Jersey had approved claims for 101,278 family leaves. While it is encouraging that thousands of families have been helped, less than 1 percent of eligible employees are using family leave each year. Some managers reported a lack of awareness among their employees about the state’s family leave insurance program. In fact, even some human resources professionals were confused about or unaware of the law’s provisions.

Our findings about New Jersey’s experience are consistent with a study I conducted with Ruth Milkman about the first six years of a similar paid family leave program in California. Our survey found that use of the paid leave program actually reduced turnover and had little impact on companies’ productivity or profitability. However, fewer than 2 percent of eligible workers were taking advantage of it.

The United States is the only wealthy country without a national paid family leave policy. It would appear, based on our research, that catching up with the rest of the world would benefit all of us.


 

Eileen Appelbaum, a senior economist at the Center for Economic and Policy Research, is co-author of “Business As Usual: New Jersey Employers’ Experiences with Family Leave Insurance.”

 

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