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Meet the Most Progressive Paid Leave Bill in America

Fiona Goodall

A new paid leave bill in the District is once again driving the national conversation and stirring debate. If passed, it will be the most progressive in America—and, according to The Washington Post, the bill will probably have popular support. “People should be able to take medical leave, particularly during and after pregnancy, without worrying about getting fired or going broke,” the Post’s editors wrote in a second editorial last week about a national paid leave proposal called the FAMILY Act. I couldn’t agree more. While this and their earlier editorial on the DC proposal speak to the need for paid leave in general, the Post editors unfortunately present some misleading information about how leave would be paid for and maintained, both in DC and nationwide.

Here is what California, New Jersey and Rhode Island and most of the world have figured out: The most cost-effective way to ensure paid family and medical leave is a social insurance fund that pools small contributions so income is available to those needing leave, which is a fraction of those in the pool at any given time. In Rhode Island, for instance, the most recent state to pass such a program, less than one percent of the workforce used Temporary Care Insurance in 2014.

The program is similar to the way disability insurance works. Contrary to the Post editorial on the national bill, employers are not mandated to pay their employees’ salaries while they are out on leave. They make a small contribution per employee to the fund, so that if their employees need to take an extended leave to care for themselves or a loved one, the employee can draw wages from this pooled insurance fund.. That’s a big help to small business owners who likely can’t afford the full cost of extended leave themselves. It’s also a lifesaver to the millions of self-employed and contract workers (who can opt in), and workers who are underemployed or have multiple part-time jobs where they are ineligible to receive even unpaid family and medical leave. 

More than two hundred business school professors recently sent a letter to Congress making the business case for paid family and medical leave for all families. They describe how it increases productivity, job retention, and attachment to the workforce; the professors refer to estimates that the median costs of turnover for companies across all occupations is equivalent to 21 percent of workers’ annual wages. Aside from its business implications, paid leave is a major issue for voters: In a recent poll from CBS/New York Times, four out of five respondents expressed support for paid parental leave. 

In DC, the proposed bill would create a fund so that people employed in the District could draw wages while they are caring for a new child or a serious personal or family illness. Employers would not be mandated to pay full salaries for their employees who need to take leave. Instead, the fund would pool small contributions from employers whose employees live and work in DC, from employees who work in but do not live in DC, and from federal government employees. It would positively impact employment and financial stability for our nation’s capital. 

One of the Post editorials claimed the bill would go “way too far” by covering everyone rather than focusing only on low-income workers, who are most likely to lack access to affordable leave. In fact, only 13 percent of U.S. workers have access to paid family leave through their employers, and fewer than 40 percent have medical leave through an employer-provided temporary disability program. For far too many, birth or serious illness means financial chaos. 

Workers and their families aren’t the only ones paying a price for a lack of leave policies. Employers lose talented employees and foot higher bills related to increased turnover. Our economy suffers when so many people—mostly women—leave the workforce to care for family members. There’s a cost to the public, too, that comes from worse health outcomes, higher infant and maternal mortality, greater need for public assistance, and loss of independence and higher nursing home costs for seniors. 

The Washington Post editorial board expressed concern that paid family leave would be unfair to employers who offer more generous benefits. As the business school professors explained, these firms would actually see cost savings. The program would especially benefit employers who can’t afford to pay the full cost of leave. Labor Secretary Tom Perez reminds us that the payoff is not just “the well-documented positive economic impacts, [but also] the basic human dignity we can and should afford Americans who need to care for an ill spouse, attend to a parent in hospice, recover from an accident, or bond with a new child.” 

But paid leave for workers in the District doesn’t go far enough—paid leave is a national issue, and therefore should be a national concern. At that level, the FAMILY Act (proposed by New York Senator Kristen Gillbrand and Connecticut Representative Rosa DeLauro) would set up a national insurance pool to cover different types of workers and protect against retaliation. It would be funded by small contributions from employees and employers. Since this Congress is not likely to act soon, DC’s plan makes financial sense for those who work there.  These local wins also pave the way for a national plan that will enable all Americans to provide for and care for their loved ones.