(Source)
The Rise of Paid Family Leave
Paid family leave (PFL) refers to policies that give eligible workers partially or fully compensated time away from work for qualifying reasons, such as bonding with a new child or caring for a close family member with a serious health condition. Importantly, the United States currently has no federal law requiring employers to give workers paid leave of any kind. In fact, the U.S. is one of six countries and the only rich country without a national PFL policy. Although the U.S. remains a global outlier in the PFL realm, U.S. workers may still access PFL through various mechanisms.
First, workers can receive PFL if their employer offers it. However, an employer’s decision to offer PFL in the private sector is voluntary, and the implementation of PFL policies at the employer level has been low. Second, some states have enacted mandatory laws to create state-paid family leave insurance programs, giving cash benefits to eligible workers who undertake certain caregiving activities. Thirteen states—California, Colorado, Connecticut, Delaware, Maine, Massachusetts, Maryland, Minnesota, New Jersey, New York, Oregon, Rhode Island, and Washington—and the District of Columbia have passed PFL laws, and state legislation for PFL is growing.
In 2004, California earned its title as the first state to enact a PFL policy. California’s PFL law provides benefit payments to workers who need to take time off to care for a seriously ill family member, bond with a new child, or support a family member in the U.S. armed forces deployed to a foreign country. Workers eligible for PFL in California can receive benefits for up to eight weeks, with those benefits amounting to seventy to ninety percent of a worker’s weekly wages earned five to eighteen months before their claim start date.
In 2016, New York enacted its own version of a PFL policy. New York’s PFL law provides workers job-protected, paid time off to bond with a newborn, adopt or foster a child, care for a family member with a serious health condition, or assist loved ones when an immediate family member is deployed on active military service. Further, workers eligible for PFL in New York can receive benefits for up to twelve weeks, with those benefits amounting to sixty-seven percent of a worker’s average weekly wage.
PFL policies differ “in duration, benefit amount, financing structure, definition of family, and job protection.” For example, California and New York’s PFL policies align and deviate in various ways. First, while both states make PFL participation mandatory, California offers only eight weeks of paid leave, while New York offers twelve weeks of paid leave. Second, workers in California are eligible for PFL if they have earned at least $300 in their base period, whereas workers in New York are eligible if they have remained employed for twenty-six consecutive weeks and work a regular schedule of twenty or more hours per week. Third, New York’s PFL law provides workers with job protection, but California’s PFL law does not provide such protection. Accordingly, the rise of PFL policies across the U.S. applies to and impacts workers in varying ways.
In the past decade, the rise in PFL policies among states and private employers has led to a relatively drastic increase in the percentage of U.S. workers with access to PFL. Specifically, in 2014, thirteen percent of civilian workers, twelve percent of private industry workers, and sixteen percent of state and local government workers had access to PFL benefits. Markedly, in 2023, twenty-seven percent of civilian workers, twenty-seven percent of private industry workers, and twenty-eight percent of state and local government workers had access to PFL benefits. Although this increase in PFL access is not trivial, workers in occupational groups that arguably need PFL policies the most are being left out disproportionately.
For example, ninety-five percent of the lowest wage workers, “who are predominantly women and workers of color,” have zero access to PFL. Further, workers in industries with large amounts of low-income workers—including service workers, leisure and hospitality workers, and accommodation and food service workers—are approximately half as likely to have PFL access compared to the private sector as a whole. Thus, PFL access is unevenly distributed by race, industry, and income level. When combining this PFL access gap with everyday caregiving demands, the result is lower earnings, wealth building, and retirement security among low-wage workers and minority groups.
Why Paid Family Leave Matters for Employees and Employers
In March 2023, among civilian workers, thirty-nine percent of management, professional, and related occupations had access to paid leave, while only sixteen percent of service occupations had access to paid leave. Notably, a researcher at Mathematica examined the influence of California’s PFL program on mothers’ risk of poverty and household income following a birth and found that PFL “translate[s] into improved economic security when children are very young, and that gains are greatest among groups with higher levels of needs.” Given that the availability of PFL is more prevalent among high-paying occupations, workers in low-paying occupations who likely have higher levels of need are not realizing the same access to PFL and benefits. Therefore, the current accessibility of PFL in the U.S.—provided through benefits offered by certain employers or by working in specific states—falls short of what U.S. workers need.
PFL policies benefit employees in a myriad of ways. For example, the aforementioned Mathematica study found that California’s PFL policy made significant progress toward reducing class disparities, and its benefits were strongest among economically disadvantaged groups. Further, the study concluded that PFL programs similar to California’s can be “effective in improving household economic security when children are very young, including for economically disadvantaged parents who have been historically underserved in this policy area.” A resident scholar from the American Enterprise Institute also found that California’s PFL law was followed by a twofold increase in women’s use of leave following the birth of a child” and a six to nine percent increase in “the average weekly work hours of employed mothers with children between one and three years old.” These findings are significant because increased female labor force participation and educational attainment arguably resulted in nearly all the growth of middle-class income since 1970. PFL policies have been shown to improve the prospects of economically disadvantaged groups, which ultimately benefits U.S. workers as a whole by increasing workforce participation and national economic output.
Employees are not the only ones who benefit from PFL policies. PFL is linked to “increased business productivity, higher employee morale, recruitment and retention of skilled workers, and reductions in costs associated with turnover.” In other words, PFL benefits employers as well, and employers are taking notice. The implementation of PFL policies among high-wage, high-skill occupations is increasing because PFL policies can be used to attract top talent. Further, a study on the impact of New York’s PFL policy on employers found “no evidence that PFL had any adverse impacts on employer ratings of employee performance or their ease of handling long absences.” Instead, this study found that employers’ ratings of employee commitment and cooperation improved in the first year the law was enacted. Additionally, researchers studying the effects of PFL on firm performance found that “employee benefits help recruit and retain highly qualified employees” and resulted in a net positive effect on firm outcomes. In fact, PFL benefits allow firms to “reduce costly employee turnover, increase productivity, and facilitate the nomination of women to executive positions.”
Although PFL policies promise many benefits, they also introduce potential costs. PFL policies may impose financial costs and other burdens on employers, which could ultimately lead to less hiring, lower wages, and higher prices overall. PFL opponents contend that these potential costs include detrimental wage replacement benefits during parental leave, indirect expenses associated with training and recruiting replacement workers, and discriminatory hiring and promotion decisions against women. However, researchers studying the costs of PFL for firms and coworkers found “no measurable effects on firm output, labor costs, profitability[,] or survival” and “no evidence of adverse impacts on coworkers overall.” PFL opponents argue that small firms may bear the biggest costs as a result of these policies, but this study also found “little evidence that the costs of [PFL] varies with firm size.” Nevertheless, balancing the benefits with the costs to employers can be achieved through thoughtful policy design.
The National Need for Paid Family Leave
The most relevant federal policy in the PFL area is the Family and Medical Leave Act of 1993 (FMLA), which gives eligible workers with a federal entitlement up to twelve weeks of unpaid, job-protected leave per year for a limited set of family caregiving needs. Thus, the FMLA fundamentally differs from PFL policies in a core way: it fails to provide paid leave. Further, the FMLA’s coverage is limited, as it only applies to public agencies, public and private elementary schools, and companies with fifty or more employees. This limited coverage is problematic because there is a “distinct drop in eligibility among low-wage workers.”
Given the vast benefits PFL policies promise for low-wage workers and the lack of access those workers receive when leaving implementation up to the states and private employers, it is clear that the U.S. must enact a federal PFL policy to assist those who need it the most. In other words, a federal PFL policy would reduce the access disparity and “ensure that low-wage workers, precisely the group that stands to benefit the most, can take time off from work” to address personal and familial concerns without the fear of losing income or their job completely.
At first thought, some may suggest that an amendment to the FMLA implementing paid leave provides the most straightforward course towards achieving the goals of PFL. However, a federal PFL policy should be distinct from the FMLA because the FMLA is not designed to accommodate a paid leave system. Notably, the FMLA does not include a funding mechanism, which all existing PFL programs require. State PFL programs are funded by payroll contributions or deductions—or premiums—that cover the entire cost of benefits and program administration. These premiums are collected from workers, employers, or both; payroll taxes, an employer mandate, or general revenue can fund a federal-level PFL policy.
Simply writing a funding mechanism into the FMLA would not be a minor change; it would require a fundamental restructuring of the law, transforming it from a labor regulation focused on employer obligations into a benefits program that administers financial support to workers. This change would require the creation of a new administrative infrastructure to collect contributions, distribute benefits, and oversee compliance—none of which the FMLA was designed to handle. Thus, establishing a distinct federal PFL policy would be more practical than amending the FMLA to include the features necessary for an effective PFL program.
Further, because the FMLA does not apply to employers with less than fifty employees, it excludes many low-income workers who would benefit the most from a PFL policy. Accordingly, an effective federal PFL policy should take an approach similar to California’s, where there is no requirement for minimum hours worked or employer size. Similar to the FMLA and unlike California’s PFL policy, a federal PFL policy should also provide job protection. A federal PFL policy should also adopt a federal floor approach similar to the FMLA—establishing minimum standards while allowing states to offer more generous benefits. By enacting a federal PFL policy with a funding mechanism, broad worker eligibility, and job protection, the U.S. can significantly improve the economic outcomes of its workers and strengthen its global competitiveness by joining the vast majority of the world in the PFL policy arena.
Suggested Citation: Kadin Mesriani, Paid Family Leave: The U.S.’s Isolation on the Global Stage, Cornell J.L. & Pub. Pol’y, The Issue Spotter, (Mar. 11, 2025), https://jlpp.org/paid-family-leave-the-u-s-isolation-on-the-global-stage/.
