Twenty-five years after then-President Bill Clinton signed the Family and Medical Leave Act of 1993, Washington is finally in serious talks to taking the next step: passing a federal, partially-paid leave policy.
The GOP, led by U.S. Senator Marco Rubio (R-Fla.) and First Daughter Ivanka Trump, are working on a paid family leave policy that pulls from Social Security. Meanwhile, the Democrats touted their bill, the Family and Medical Insurance Leave Act (FAMILY), last year as framework for filling in FMLA’s gaps, particularly with providing partial wages during leave that would be paid for through small employer and employee contributions.
The bill is also broader than FMLA and offers portable, partial wage replacement for up to 12 weeks of paid leave for a pregnancy, the birth or adoption of a child, to recover from a serious illness or to care for a seriously ill family member.
fmlA new analysis from the Institute for Women’s Policy Research, a Washington, D.C.-based think tank for domestic women’s issues, found that the FAMILY Act would cost half of 1% of payroll, rendering employers responsible for 0.25% of payroll to fund employees’ paid leave.
And with the tax reform, which slashed the corporate rate to 21%, from 35%, employers have additional savings to reinvest into their workforce.
The implementation, however, would cost employers $13.4 billion in administrative costs to set up, according to the analysis.
“It would be a good place to think about putting their extra money,” says Jeffrey Hayes, program director of job quality and income security at the Institute for Women’s Policy Research. “The FAMILY Act is a good place to think about expanding on the benefits package.”
Should the FAMILY Act make its way to President Donald Trump’s desk, which Hayes admits is unlikely, he notes that there is still room for employers to offer comprehensive paid family leave policies, particularly in the elder care space.
“There is room for employers to do more when they see it as a good tool for HR management, but it does raise the floor for all workers,” he says.
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