WASHINGTON, DC (March 19, 2015) – With 4.1 million New Yorkers serving as family caregivers, U.S. Senator Kirsten Gillibrand recently reintroduced legislation that would create paid family leave, including maternity and paternity leave, personal medical leave, and spousal support. Gillibrand’s Family and Medical Insurance Leave (FAMILY) Act would establish a national, gender-neutral paid family and medical leave insurance program, ensuring that American workers would no longer have to choose between a paycheck and caring for themselves or a family member. The United States is currently the only industrialized nation in the world without any form of paid family leave.
Under current law, companies with more than 50 employees must provide 12 weeks of unpaid leave for new parents, however, it requires no paid leave. The policy covers about 60 percent of the private sector workforce, however many simply cannot afford to take leave because it is unpaid. In fact, only 13 percent of workers in the U.S. have access to paid family leave through their employers, and 37 percent of workers have access to personal medical leave through employer-provided temporary disability insurance.
“When a young parent needs time to care for a newborn child – it should never come down to an outdated policy that lets her boss decide how long it will take – and decide the fate of her career and her future along with it,” said Senator Gillibrand. “When any one of us – man or woman – needs time to care for a dying parent – we should not have to sacrifice our job and risk our future to do the right thing for our family. Choosing between your loved ones and your career and your future is a choice no New Yorker should have to make.”
“In 1986, when I was Chief of Staff to Senator Chris Dodd, I was diagnosed with ovarian cancer. It was an experience I would not wish on anybody,” said Rep. DeLauro. “But in one sense I was lucky; my employer offered paid medical leave. Paid leave helped me get through that difficult time in my life, but many families are not as fortunate. Access to paid family and medical leave should be a fundamental right for all Americans, not a lottery based on where you happen to find work. Helping families who work hard keep their jobs and hang on to their paychecks during a tough period in their lives will boost our economy. There is no reason not to pass the FAMILY Act.”
The lack of paid leave in the United States hits low-income workers and women workers the hardest. Replacing women caregivers who leave their job, is estimated to have cost $3.3 billion to our economy, or one fifth an employee’s annual salary (Family Caregiving Association). New mothers who take paid leave are 54 percent more likely to report wage increases and 39 percent less likely to need public assistance. The steepest declines in work-force participation have come among younger and less-skilled women who most need the work. In terms of caregiving, there are over 43 million caregivers over the age of 50, with many needing to choose between caring for their families and going to work. The need for caregivers will continue to increase as Baby Boomers age, there is an expected 20 percent growth coming over the next 15 years.
Three states have already implemented paid leave legislation – California, New Jersey and Rhode Island. According to a survey conducted by the Center for Economic and Policy Research, 91 percent of employers surveyed in California said the program had a “positive effect” or “no noticeable effect” on profitability. A study by Professor Christopher Ruhm at University of Virginia showed that in California it was 6 percent more likely for a mother to be working one year after giving birth if she took leave. And, according to a Rutgers study commissioned by the National Partnership for Women and Families, in New Jersey it’s 40 percent less likely for a woman to receive food stamps within a year of having her baby when she has paid leave.
Companies like Google/YouTube, Morgan Stanley, VICE and Kinkos among many others see the correlation between the success of their businesses and the satisfaction of employees. But, because paid leave is not a guarantee, many businesses are realizing the costs of inaction. In states that have implemented paid leave, business’ bottom lines have benefited by improved worker retention, reduced benefits costs, and increased worker productivity and morale. Companies with paid leave have reported improved employee loyalty and less turnover; in California, 60 percent of businesses actually cut costs by coordinating their benefits with the state’s program. As Ruth Milkman, a sociologist at the Graduate Center, CUNY was recently quoted in a news report, “For workers who use these programs, they are extremely beneficial. And the business lobby’s predictions about how these programs are really a big burden on employers are not accurate.”
Gillibrand’s FAMILY Act would create an independent trust fund within the Social Security Administration to collect contributions and provide benefits. This trust would be funded by employee and employer contributions of two-tenths of one percent of wages each, creating a self-sufficient program that would not add to the federal budget. The expected cost to the average worker would be similar to the expense of a cup of coffee a week. Benefit levels, modeled on existing successful state programs in New Jersey and California, would equal 66 percent of an individual’s typical monthly wages up to a capped monthly amount that would be indexed for inflation.
Gillibrand’s proposal makes leave available to every individual for up to 60 workdays or 12 weeks regardless of the size of their current employer and regardless of whether such individual is currently employed by an employer, self-employed or currently unemployed, as long as the person has sufficient earnings and work history. Under this plan, workers would be able to address their own serious health condition, including pregnancy or childbirth, and those of their loved ones – whether it’s caring for a new child or a seriously ill parent, spouse, or partner.
Across New York, small businesses favor paid family leave. According to a 2013 poll conducted by the Small Business Majority, 6 in 10 New York entrepreneurs support setting up publicly administered family and medical leave insurance pools that would provide employees with a portion of their wages for a limited number of weeks, allowing them to care for a new a baby or seriously ill family member. Nearly 8 in 10 New York small business owners have some type of policy – formal or informal – in place when it comes to family medical leave and parental leave.
The FAMILY Act was introduced with Senators Brown (D-OH), Booker (D-NJ), Hirono (D-HI), Markey (D-MA), Merkley (D-OR), Mikulsi (D-MD), Reed (D-RI), Schatz (D-HI), Whitehouse (D-RI) and Baldwin (D-WI). U.S. Representative Rosa DeLauro is the original co-sponsor on the companion legislation in the House.