APP Honors: Paid Family Leave

by Jennifer Colamonico, Lisa Evans,and Gretchen Henkle

For full report click here [1].

An increased number of California’s workers are playing the dual role of wage earner and caregiver. Yet many working families have no income protection in the event that they need to temporarily leave work to attend to an ill spouse, parent, or child, a newborn, or themselves. Employers’ response to the need for family leave has been inadequate, with fewer than 2/3rds of employers offering any paid sick leave, and a mere 2 percent of all employees receiving employer-provided family leave benefits. Due to the failure of the private sector to adequately address the increase in demands on working caregivers, state and federal social policies have attempted to address the problem through the federal Family and Medical Leave Act (FMLA) and the California Family Rights Act (CFRA). These policies fall short of meeting the needs of workers in two ways: 1) they fail to cover the entire workforce, and 2) they do not provide wage replacement during the leave period.
The majority of our workforce is involved in family caregiving to a child or an older adult, with many more workers anticipating these demands in the near future.

-> 412,000 workers in California need family or medical leave but are unable to take it under current policy conditions.
-> 2/3rds of children under the age of 6 have both parents in the labor force.
-> Three-fourths of employed mothers with newborns and one-third of those with a one-month old child are at work.
-> Approximately 64 percent of elder caregivers are working, while another 17 percent must leave the workforce altogether to provide caregiving.
-> The dependency ratio will more than double over the next 30 years, when there will be nearly one dependent for every working age adult.

 In a survey of California state employees, fifty percent expect to be responsible for an adult dependent within the next five years.

In light of the high rate of family caregiving among workers, support for paid family leave is strong. Four out of every five Americans support paid parental leave, and just as many report needing more time off or schedule flexibility to meet their caregiving needs. To address the inadequacies of the current system, California could create a social insurance program that complements and improves existing family leave policies.

California has many options in how to provide California workers
with a paid family leave program. The most likely choices include an expansion of California’s State Disability Insurance System, expansion of the Unemployment Insurance system, or the creation of an employer mandate. We analyzed each of these options according to their effect on projected take up rates, coverage, and costs of paid family leave. We amended the methodology applied by the Employment Development Department in its June 2000 cost analysis report of paid family leave through SDI to project the usage and costs of expanded SDI and UI benefits. According to our proposal, nearly twice as many workers would receive paid family leave benefits than they would through the EDD’s proposal because we did not disqualify workers from benefit eligibility who fail to meet the work history requirements defined by unpaid state and federal policies. Expanding SDI would result in 325,389 new claims, while expanding UI would result in 319,496 new claims for paid family leave reasons. Additionally, our costs are substantially different from those calculated by the EDD due to our use of actual leave durations reported in the 2000 Department of Labor FMLA national survey, rather than the EDD’s mean leave duration of 6 weeks. Estimated costs under SDI expansion are $198 - $230 million, while estimated costs under UI expansion are $97.4 – $116.5 million. Costs and claims for an employer mandate are difficult to estimate given the large range of program designs. We conclude that paid family leave can be made more affordable and available if provided for through an insurance program that already covers a large percentage of the workers. However, the effectiveness and efficiency of such a program depends on how it is delivered. We compared our policy options along six major criteria to determine which program would have the most positive impact for workers, employers, and government relative to associated costs. We conclude that SDI exceeds the other alternatives on all criterion, and we recommend that a paid family leave benefit be provided for through SDI, as it would be in the best interests of California workers and employers. This report hopes to spark a policy debate to craft meaningful paid family leave legislation. To that end, California advocates need to collect better state-specific workforce data to determine both the need and support for paid family leave to help persuade legislators to take up this cause.