IE 11 is not supported. For an optimal experience visit our site on another browser.

Paid family leave becomes hot workplace issue

New Jersey, California and Washington are the only states that require employees to offer paid family leave. Two bills in Congress would extend the mandate nationwide.
Duane Hoffmann /

When Nitish Khanapure's second child was born he took four weeks off from his job as a technology manager for Washington Mutual bank and got paid during his time at home bonding with his newborn.

It wasn’t his employer that ponied up the money for the non-vacation time he used. The income came thanks to the paid family leave law in the state of California.

“It’s kind of an incentive to take some time off and help with the newborn,” he says about the law, which went into effect in 2005.

Wouldn’t it be nice to have such an incentive? Chances are you probably don’t.

Up until last month, California and Washington were the only states with any type of family leave legislation on the books. New Jersey passed a paid leave bill in late May. New Jersey and Washington’s programs take effect in 2009.

Most employers don’t provide any type of paid leave to take care of a new baby or an ailing parent. A study by the Society of Human Resource Management found that only one-third of companies offered paid family leave.

The 15-year-old Family and Medical Leave Act requires most employers to let workers take up to 12 weeks off without pay and return to their old jobs or comparable positions. (The law generally applies to companies with 50 or more employees.) But many employees are hard-pressed to take off so much time without pay.

The lack of paid leave is unusual among the world’s industrialized nations. Other nations without paid family leave include Liberia, Papua New Guinea and Swaziland, says Kate Kahan, director of Work/Family program for the National Partnership for Women & Families.

“We are way out of sync with the world,” Kahan says. “We are out of step with the evolving American family.”

The U.S. system generally is structured around the old model of Mom staying home with the kids and Dad being the breadwinner. “Workplace policies need to catch up to the fact that 70 percent of families have both parents working,” she says.

There are movements in a handful of other states, including New York, Massachusetts and Oregon, to implement paid leave, but many advocates believe time off with pay should be mandated at the federal level. Two bills now circulating in Congress would mandate eight to 12 weeks of paid leave.

One bipartisan bill sponsored by Sens. Chris Dodd (D-Conn.) and Ted Stevens (R-Alaska), calls for eight weeks of paid family leave within a one-year period. Benefits would be paid out on a tiered system depending on salary. The program, which would not affect companies with 50 employees or fewer, would be funded by employee, employer and the federal government.

A second bill in the House would mandate 12 weeks of paid leave. The legislation also includes a tiered wage system and would be funded by a new trust fund. Employers and employees would pay into the fund equally through payroll deductions, similar to unemployment benefits.

“So many people can’t afford to take advantage of unpaid family leave,” says Rep. Pete Stark (D-Calif.), a co-sponsor of the House bill. He said passage of the bill would be a victory for "family structure and family preservation."

But the business community hasn’t exactly embraced these type of mandates with open arms, and Stark expects a battle to pass the legislation.

“Employers didn’t step up on Medicare or Social Security. We made them do it and now it’s part of the system,” he notes.

Indeed, some employers see the mandate as a potential threat.

“Anytime we as a country, or in the state setting, consider mandating benefits, I think the risk is employers not being able to meet or maintain those benefit or competitiveness,” says Kathie Elliott, assistant director of employee relations with Central Michigan State University.

Being a mother herself, Elliott understands the need to spend time with a newborn, but she says parents have months to plan before a child is born so they can save vacation days or set aside money for the time they want off.

One group refers to the Senate bill as the “dirty-diaper bill.”

“It looks really convenient on the outside but it gets messy on the inside,” says Brianna Cardiff, policy analyst for the National Taxpayers Union, who helped coin the “dirty-diaper” phrase.

Cardiff believes unforeseen problems could result.

The mandate would raise the cost of doing business, so companies could end up lowering wages to compensate, she says.

“It cuts down on a company’s flexibility and creativity," Cardiff says. "Some companies go above and beyond what’s typically mandated.”

Since California is the only state that has mandated paid family leave in place, I figured I should contact a business advocate there to see how the law has impacted companies.

“It wasn’t as dramatic an impact as a lot of people thought it would be,” says Mary Topliff, an employment law attorney in San Francisco. “It’s been fairly seamless for a lot of people.”

The paid leave program in the Golden State piggybacks on the state’s disability program and is 100 percent funded by the employees themselves at an annual average cost of about $47 depending on salary.  Californians who take advantage of the program get 55 percent of their pay while on family leave.

No matter what the ultimate structure, calls for paid leave are likely to intensify, especially with the graying of the population.

Walt Yost, a reporter for the Sacramento Bee, found himself taking advantage of California paid leave law after his father was diagnosed with dementia three years ago.

“He was taking care of my mom who didn’t drive and was dependent on him,” he says.

Yost ended up depleting much of his vacation time as he and his brother took time off to care for their parents.

He went to his human resource department and found out about the paid leave option and was able to take up to 30 days during a 12-month period to help out his parents.

“I was going to take the time regardless, but it took some of the financial pressure off,” he says.