HEROES Act’s paid-leave mandate would hurt America’s working families

The coronavirus pandemic has devastated many of our nation’s working families, and easing their burden is a top priority for policymakers. While every effort to assist these families is laudable, some well-intentioned proposals risk doing more harm than good. A perfect example of such a proposal is the HEROES Act, the $3 trillion relief bill that the Democrat-controlled House of Representatives passed on Friday.

Among other benefits, if enacted, the HEROES Act would provide up to 14 days of paid sick leave and 12 weeks of paid family and medical leave through Dec. 31, 2021. According to supporters, these policies can help “workplaces and communities respond more effectively and equitably for the good of everyone” to the pandemic, and they contend that “[w]hen workers have to choose between earning a living and staying homesick, it incentivizes them to come to work when they’re ill and potentially infect their colleagues and anyone else they come into contact with.”

But there is little reason to believe that entitlement to paid sick leave or paid family and medical leave will stop this pandemic, or prevent the next one. Thirteen states and twenty-one cities and counties currently mandate paid sick leave, including New York, New Jersey, Connecticut, Massachusetts, Michigan, the District of Columbia, Rhode Island, and Maryland. These locales constitute eight of the top 10 with the highest per capita death total due to the coronavirus. There is some research that state-paid sick leave mandates may decrease the incidence of a contagious illness like the flu by approximately 2.5 percent, but the policy clearly is not a panacea.

Five states — California, Washington, New York, New Jersey, and Rhode Island — have in effect paid family and medical leave programs (three other states and the District of Columbia have adopted such laws, but they have not yet taken effect.) As noted, these states have all been hard-hit by the coronavirus. 

Indeed, it would be shocking if the programs had decreased transmission of the virus because most impose a seven-day waiting period before workers are eligible for benefits, and it can take weeks before workers actually receive a check. These programs are designed to support individuals during an extended absence from work, not to encourage them to stay home at the first sign of a cough. 

A new federal paid leave mandate also risks discouraging employers from voluntarily adopting or expanding paid leave benefits. Research suggests that expansions of government-provided health insurance have tended to displace employer-provided coverage rather than expand coverage to the uninsured. And, as a representative of Deloitte once testified before Congress, the company decreases its paid leave benefits in states that have adopted paid leave programs.

The private sector is currently on a roll with respect to paid leave, and it would disserve workers to put a stop to this trend. The number of employers offering paid parental leave, for example, has nearly doubled in the last five years. And according to a 2019 survey by the Society for Human Resource Management, over 90 percent of employers offered paid leave of some kind, and a full 95 percent of employers offered paid sick leave. Also as of 2019, the Bureau of Labor Statistics estimated that over 86 percent of full-time workers receive paid sick leave. These numbers have certainly only increased since then — among other things, 36 of the 100 largest employers in the country have announced new paid leave policies in response to the pandemic.

Of course, there are still many employees who lack access to paid leave, particularly low-income employees in the retail and food-service industries, and the HEROES Act would provide these workers with important benefits. But employees would ultimately pay for these benefits themselves in the form of lower wages, reducing their take-home pay in the middle of a recession and particularly disadvantaging low-income families. 

And as to the millions of unemployed individuals, the HEROES Act might mean that they do not return to work at all. By imposing expensive paid leave mandates on employers and by extending enhanced unemployment benefits — which provide many workers with unemployment benefits greater than their salary — the Act would make prolonged unemployment more attractive to both employers and employees.

Policymakers understandably want to take action to do something for struggling American families, but they would be wise to temper this urge with a dose of common sense: Working families should not have costly policies with speculative benefits foisted upon them in the middle of an economic crisis.

Kristin A. Shapiro is a senior fellow at IWF and an attorney for the federal government.  Shapiro served as assistant general counsel in the Office of General Counsel of the U.S. House of Representatives for three years.