During the last year, millions of working adults have been forced into a dilemma: earn a paycheck or leave their jobs to care for a child or sick relative. The challenges they face point to a threat to Americans’ financial security and the nation’s economic recovery from the pandemic.
Leaders in Congress and the administration have taken notice and made expanding access to paid family and medical leave benefits for working Americans a leading priority.
The good news is that meeting this essential policy goal does not require the formation of a new government entitlement program. The foundation for a national paid family and medical leave program is already in place.
Since 1993, the Family Medical Leave Act (FMLA) has required employers to provide workers with 12 weeks of leave for medical care or taking care of a newborn among other things. Workers who take leave will not lose their job but are not paid for the time they are not working.
Alongside FMLA, disability insurers have been providing income protection to more than half of the U.S. civilian workforce. Today, those employer-provided benefits reach 62 million workers with approximately $20 billion annually in disability claims. This includes an increasing percentage of paid family leave as demand for those benefits grows. Insurers also work closely with employers to manage paid and sick leave programs. And they help consumers who were disabled return to work and manage employee assistance programs.
These two proven models of success provide the building blocks for paid family leave for all Americans, no matter how and where they work. They can take form in three ways:
- Lawmakers could add a paid-leave component to FMLA that employers fund on their own or through private insurance.
- For small businesses with less than 50 workers who are not required to offer leave under the FMLA, a paid-leave initiative can amend federal law to allow groups of smaller employers to pool resources and offer paid leave benefits to their employees. It also could provide tax incentives to create paid leave plans. And it could ease administrative burdens that dissuade employers from offering paid leave and enable automatic enrollment of workers into paid leave plans.
- A federal effort could launch public-private partnerships to help independent and “gig” workers access paid leave benefits, a challenge that most state-based programs haven’t been able to meet.
The need for innovative and effective paid leave policy has been put in sharp relief by COVID that turned working adults into homecare providers for newborn children or ailing family members.
Disproportionately, this burden has fallen on women, and the outcome is reflected in data from the U.S. Bureau of Labor Statistics. An estimated 2.3 million women have left the workforce since February 2020 compared to 1.8 million men.
The pain of a lost paycheck for families is profound and immediate. The ramifications of not addressing this problem are even greater. An October 2020 report from the Center for American Progress concluded that “if conditions for families do not improve — and if the levels of maternal labor force participation and work hours experienced during the April 2020 first-wave peak of infections and COVID-19 lockdowns persist long term — lost wages would amount to $64.5 billion per year.”
The need for action is clear. And broad-based support for FMLA and private-market insurance and administrative services that have proven their value to employers and workers with paid leave benefits are an ideal way to meet this moment.
Susan K. Neely is president and CEO of American Council of Life Insurers.