Momentum builds for single leave mandate

In July, Hillary Clinton will become the first female presidential nominee from a major U.S. political party.   When she accepts the nomination, she will undoubtedly mention paid family leave.

This will not be a surprise, given her promotion of this policy and, more important, the recent public and private moves to guarantee paid time off to care for a child or other loved one.  The following is a sampling of paid leave laws and private employer policies passed or implemented this year:

{mosads}New York.   At the end of March, New York State became the fifth state to mandate this type of leave. The program provides employees up to 12 weeks of paid time off from a job to bond with a new child or to care for a gravely ill parent, child, spouse, domestic partner, or other family member. The duration of the leave doubles the 6 weeks allotted in California and New Jersey, and triples the 4 weeks of paid leave offered by Rhode Island.

New York’s new law also does away with many of the exceptions in similar laws. The paid leave program will cover full-time and part-time employees. There will be no exemptions for small businesses. And to take advantage of the program, employees only have to have been employed by the company for six months.  New York’s paid leave law begins on Jan. 1, 2018 and gradually phases in through 2021.

San Francisco.  Not even a week after New York, San Francisco’s Board of Supervisors passed a paid parental leave law that made it the first city in the country to do so. California employees are eligible to take six weeks of partially paid leave under California’s Paid Family Leave (PFL) law to bond with a newborn child or newly placed child for adoption or foster care, among other reasons. Payment is made from a worker-funded state disability program and calculated as a percentage of the employee’s wages (55 percent) subject to the maximum weekly benefit amount set by the PFL program.  The employer must pay the remaining forty-five percent of the employee’s gross wages.

San Francisco’s paid leave will be phased in more quickly than New York’s. In January 2018, it will cover all employers that regularly employ twenty or more individuals if any of those persons are regularly employed in San Francisco.

Private Employers.   Since February there have been almost weekly announcements about employers adopting or improving their paid leave policies, including:

• Twitter: 20 weeks of paid parental leave
• Wells Fargo: 16 weeks of paid leave
• Anheuser-Busch: 16 weeks of maternal leave; 2 weeks of paid leave for secondary caregiver, male or female
• Bank of America:  16 weeks of parental leave
• EY:  16 weeks of parental leave

These large employers are clear this is about competing for talent. Whether attraction or retention, paid leave is now becoming a “must-have” for large organizations. According to the American Action Forum, in companies with 500 or more employees, paid family leave rose from 17 percent to 22 percent from 2010 through 2015. But in companies with fewer than 50 employees, the growth from 2010 through 2015 was only by one percentage point, from 7 to 8 percent.

Large companies, especially those with offices and operations in growing and dynamic urban areas, have long had an advantage in attracting and retaining employees. Especially in a tightening labor market, small and medium sized businesses can be at a disadvantage in attracting talent.  This is especially true with younger employees who look for work-life balance and hold more egalitarian views toward family life. In addition, myriad leave laws, regulations and policies create an administrative burden that is much more costly and difficult for smaller firms to handle. 

It is this increasing relative large employer talent advantage that is forcing smaller employers to rethink their usual antipathy toward a federal paid leave law. A uniform federal paid leave mandate would level the playing field. Yes, it would impose new costs. But it would also broaden the recruitment pool and help retain the employees with whom companies have invested time and resources.  Which means, in 2016, we might see something as unusual as anything yet in this unusual political season:  Small businesses advocating for a single mandate to standardize leave laws across the board.

Terri L. Rhodes is the President and CEO of the Disability Management Employer Coalition (DMEC).