How close is the US to mandating paid parental leave?
WASHINGTON — Forty-one nations guarantee their citizens paid parental leave to care for and bond with a new child — the United States isn’t one of them. But that may change.
President Trump renewed his call for federal paid parental leave last month during the State of the Union address, but what’s been happening since then? During a session at the Society for Human Resource Management’s legislative conference this week, Adrienne Schweer, a fellow at the Bipartisan Policy Center, discussed current paid leave policies and those currently being debated by Congress.
“Everybody is in full agreement we need a federal policy on parental leave,” Schweer said. “It’s hurting American families. Women are having less children than they want because of the cost of childcare, which is sometimes equal to more than a mortgage payment.”
Lisa Horn, vice president of policy engagement at SHRM, says mandated paid leave should be optional for employers because it’s “a one-size-fits all policy that stifles employer creativity.”
Still, many employers have been adding parental paid leave policies on their own. According to SHRM research, 27% of American employers offered paid leave in 2018, a slight increase from the year prior, Schweer said. Reynolds American, Eataly, XPO Logistics and VF Corp. are among a handful of employers that recently rolled out a parental leave program to their employees.
In an effort to encourage more employers to provide the benefit, Congress provided a 25% tax credit to companies providing paid parental leave to employees making under $76,000 a year, Schweer said. The changes were enacted in the 2017 Tax Reform law.
“It’s effective for 2018, but the IRS didn’t put out the information for 18 months, and there’s no extension to complete it this year,” Schweer said.
Other proposals aim to go much further.
Schweer said three bills involving paid leave are currently in the House, and they all take very different approaches to funding the time off. The Working Parents Flexibility Act proposes creating tax-exempt savings accounts which can be used to pay for childcare.
“That one took inspiration from the HSA and its tax benefits,” Schweer said. “It has bipartisan support in the House and is moving to the Senate. The only thing about these accounts is it won’t benefit everyone; not everyone will be able to afford to set that money aside.”
The second bill is the Economic Security for New Parents Act, which would allow new parents to draw from Social Security to supplement their income during parental leave. The caveat? In exchange for using the program, parents are required to delay their retirement.
“With this bill, paid leave would be funded through payroll taxes,” Schweer said. “It’ll have no effect on employers; they won’t have to pay more for employees to have paid leave.”
A third bill, called the FAMILY Act, proposes offering 12 weeks of partially paid parental leave to all employees who fall under the protection of the Family Leave Medical Act. Funding would be provided through employer and employee payroll taxes. Five states already have the same mandate in place: California, New Jersey, Rhode Island, New York and Washington. In 2020, Washington D.C. will join their ranks, Schweer said.
“This one has a robust following,” Schweer said. “It has 225 cosigners, so it’s likely to pass in the House.”
Ivanka Trump made an appearance during the first day of SHRM’s conference, where she hinted new paid parental leave proposals will emerge in the coming weeks, Schweer said. Members of the press were not permitted to attend the session of the conference where Trump spoke.
“Paid family leave enables parents to balance the competing demands of work and family, pursue their careers and build strong and thriving families,” Trump said in a quote attributed to her during Schweer’s presentation.
Schweer said she’s seen interest in expanding paid leave coverage to include caring for elderly loved ones. She estimates there are about 40 million unpaid caregivers in the U.S., but only 40% of employers provide medical leave to meet their needs. Schweer’s committee is planning to make recommendations to lawmakers concerning this issue in May.
“One quarter of all caregivers are millennials — that means people of childbearing age are also caring for their parents,” Schweer said. “Like the baby boomers, they’re now the sandwiched caregiver, and it’s part of the reason they’re struggling.”