Testimony on Providing Paid Family and Medical Leave in New York State through the Temporary Disability Insurance Program
Submitted by The Institute for Women and Work Cornell University New York State School of Industrial and Labor Relations Francine Moccio, Ph.D., Director And Kathleen Geier, M.P.A., Research Specialist
March 8, 2001
Introduction Over the past several decades, a number of powerful forces and trends – including the women’s movement, the declining value of real wages, and welfare re form - have caused increasing numbers of women to enter the paid labor force. Yet workplace policies in the United States have been slow in adapting to these profound societal changes. Because women are no longer available full-time at home to care for family members, many working families have experienced difficulty balancing work and family responsibilities. To remedy the situation, in 1993 the U.S. Congress passed the Family and Medical Leave Act, which gives eligible employees the right to an unpaid leave of up to 12 weeks for the birth or adoption of a child; taking care of an ill child, spouse or parent; or tending to one’s own serious health condition. This was a dramatic step in the right direction, but unfortunately many of those who need family and medical leave the most are unable to take advantage of it. In the Survey of Employees on the Impact of the Family and Medical Leave Act, published by the U.S. Commission on Family and Medical Leave in 1996, 64% of respondents who needed the leave but did not take it said they could not afford it. The need for a paid family and medical leave policy is great, and paid leave would have many benefits for workers in general and women workers in particular. It would enable workers to return to their jobs sooner, to continue to accrue seniority, to participate more continuously in the labor force, and therefore, to take less time searching for jobs and receiving unemployment compensation benefits. Paid leave would provide economic security that would be particularly significant to women who are single parents. It would also provide much-needed support for the many women entering the labor force as a result of welfare reform. As an added bonus, one study shows that
earnings of new mothers using paid leave under temporary disability insurance are greater than mothers without access to such insurance. Beyond helping workers, an expansion of family and medical leave would help employers and society as a whole. By allowing workers to retain their jobs that they might otherwise have to give up, it could reduce the amount of taxpayer money that goes to welfare, unemployment compensation, food stamps, and other public programs. The additional cost to employers and employees would be very low, and administrative costs would be practically nonexistent, since a well-established program – the Temporary Disability Insurance Program would be used to provide benefits.1 According to the Survey of Employees on the Impact of the Family and Medical Leave Act, the FMLA has not hurt business performance; in fact, it has had no noticeable effect on business or employee performance. Similarly, it seems highly unlikely expanded FMLA would have a negative impact on businesses. The cost would be shared be employer and employee, and since the risk will be pooled through the Temporary Disability Insurance Program, costs will be minimized. In short, we believe that expanding the FMLA is a win-win proposition. It will create an incentive for more workers, both women and men, to enter the labor market, and to keep the jobs they already have. This is turn will help increase productivity and spur economic growth, making New York State more competitive in the national and global economy. New York can
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In 1999, a Fiscal Policy Institute (FPI) study by Carolyn Boldiston estimated the cost of providing paid family and medical leave through the NYS Temporary Disability Insurance Program. Using existing data about the average weekly disability benefits in NYS and national rates of leave for pregnancy, birth or adoption, and the care family members, the FPI estimated that the total cost of paid leave would range between $16.55 million and $38.44 million. This may result in an increase in disability insurance premiums for employers which, in turn, could result in an increase in employee payroll contributions."
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lead the way for the rest of the nation in bringing American employment and family policy into the 21st century and beyond. The Global Context In the U.S., the concept of even unpaid family leave is relatively new. But In much of the rest of the world, paid family leave has long been established as an essential component of family and social welfare policy. Unfortunately, the United States has been out of step, as was made clear to us at the Institute for Women and Work’s recent international conference on work and family policy, funded by the Rockefeller and Ford Foundations, in Bellagio, Italy2. For example, although more than 100 countries provide some form of compensation for women on maternity leave, the United States does not. It fact, the U.S. is one of only three countries in the industrialized world which does not have paid maternity leave (New Zealand and Australia are the others). Sixteen European countries and Canada require 33 weeks, on average, of paid parental leave. The European Union Charter mandates a Europe-wide standard of at least 14 weeks of paid maternity leave with compensation equal to no less the amount paid for sick leave. While unpaid maternity leave in America covers a minority of the labor force, in most other countries a majority of the labor force is covered. H owever, one advantage that the U.S. has in terms of family leave policy is that U.S. law covers more types of leave, including leave to care for a sick relative, than do the laws in many other industrialized nations. Canadian law does not mandate paid family leave, but it does mandates wage replacement for sick leave, maternity leave, and parental leave. Those who are eligible get up to 15 weeks paid leave for birth of a child or personal illness and 10 weeks paid leave for adoption.
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Leave is paid by the Canadian Unemployment Insurance Fund, which in most provinces is funded by employers only (there are two provinces, however, which also require an employee contribution). Germany offers more maternity leave options but a less broad range of types of family and medical leave. Parents can receive up to 19 months of job-guaranteed leave after childbirth, with the first 14 weeks accessible only to mother. Leave is paid for by the Sickness Insurance Fund, which is part of Social Security. For the first 14 weeks of maternity leave, female workers receive their normal salary; unpaid, job-protected leave is available for up to 10 months. In addition, eligible employees receive 5 to 10 days per year of paid leave to look after a sick child age 8 or under. Sweden has the most extensive paid leave policies. The Swedish government provides up to one year of paid, job-guaranteed leave after childbirth for one parent per birth, and an additional leave for fathers only of up to 30 days surrounding birth (this is to encourage more men to take parental leave). Leave is paid for by the Parent Insurance Benefit, which is part of Social Security, and covers wages up to 90% for 9 months. After the 9 months, parents have option of taking an extra 3 months of paid leave at a lower rate. In addition, unpaid leave is guaranteed up until the child is 18 months old. Paid leave is also available to care for a sick child or elder. Employees receive up to 60 days of paid leave for their children and up to 30 days for an elderly family member. New York State Data Closer to home, a recent report by the Institute for Women’s Policy Research and the Institute for Women and Work provide troubling evidence that the progress of women in New
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Institute for Women and Work. Gross Domestic Product vs. Quality of Life: A Transatlantic
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York is slowing in several key areas - a situation which could be reversed if the FMLA is expanded. In the IWPR report, released in December and entitled Status of Women in the States 20003, New York received surprisingly low ratings in several important areas. New York was given a mediocre grade of B- in the area of women’s employment, earnings, and economic autonomy. This is especially striking given the fact that the data was gathered at the height of the recent economic boom, when unemployment was at a near-record low. Among the most startling statistics documented by the report is New York’s very low rate of female work force participation – 47 states have a higher rate of female participation in the work force. In addition, New York has a high percentage of women living below the poverty line – only 5 states in the country have a higher female poverty rate. In women’s health and overall well-being, New York received the shockingly low grade of F, and rated dead last among the states – 51 out of 51, including the District of Columbia. The health and well-being index is based on indicators such as mortality and incidence of disease, mental health, preventive care, and state health policies and resources. Overall, the data show that while highly educated women in New York are doing relatively well economically, low-income women are falling further behind. While welfare reform has provided new opportunities for many women, it has also taken away some vitally important benefits. AFDC was, in effect, a paid family leave. Low-income women, with few options and little resources, were at least provided with the option to stay home and care for their children.
Dialogue on Balancing Work and Family. Bellagio, Italy. January 29 – February 2, 2001. 3 Institute for Women’s Policy Research. 2000. The Status of Women in the States: Politics, Economics, Health, Demographics. Washington, DC: Institute for Women’s Policy Research. 6
Expanding the FMLA would do much to improve women’s economic situation and overall well-being. It would encourage female labor force partici ation, provide much-needed p support for low-income women, and reduce the high levels of stress many women experience as they struggle to balance work and family. Moreover, there is strong support among New York workers for expanding FMLA, as is demonstrated by another recent study we conducted. Work and Family Research Study Last year, the Institute for Women and Work conducted a random survey by mail of residents of New York State. We asked them a variety of questions about work and family benefits and the Family and Medical Leave Act. Out of 2000 surveys mailed, 415 people responded (20% return rate which is well within the norms). Among the most important findings: 73% had heard of the Family and Medical Leave Act but only 21% had used it. Among those who used it, 61% took it to care for a child, 35% for their own personal illness, 9% took it to care for a parent, and 7% to care for a spouse. Respondents were asked to rank various work/family benefits in terms of their importance. 81% said paid leave to care for a child or elder was extremely or very important. 81% also rated paid sick leave as extremely or very important. 75% percent said that paid leave for the birth or adoption of a child was very or extremely important, and 75% also rated paid personal days as very or extremely important. By contrast, other work/family benefits were deemed of less importance. Only 27% of respondents said that the ability to work at home or telecommute was very or extremely important, and only 24% said employer-sponsored afterschool programs for employees’ children were very or extremely important. Respondents were asked policy-type questions about work/family balance in general and the Family and Medical Leave Act in particular. An overwhelming majority – 72% - said that
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employers should do more to support families. A strong majority - 55% - said that the FMLA should be expanded to provide paid leave while 32% said it should not. 54% of respondents said that if family and medical leave was paid, they would be more likely to use it. Respondents were also asked which benefits their own employer provides, and the results show that current policies are not always meeting employees’ needs. For example, only 51% of respondents said their employer provides leave to care for a child or elder, and this is a paid benefit for only 11% of workers. Yet 81% said this type of leave is very or extremely important. And though leave for the birth or adoption of a child – rated as very or extremely important by 75% of respondents – is offered by 73% of employers, it is offered as a paid benefit by only 47% of employers. Respondents were asked if they had ever refused or been passed over for a promotion because of family reasons. The results show a very revealing gender dichotomy. 1 of women 1% surveyed report that they were passed over for a promotion because of family reasons, as opposed to only 2% of men. And while 7% of women report that they refused a promotion because of family reasons, not a single man in our survey reported refusing a promotion because of family reasons. These results clearly show both strong support for, and a strong need for, expanded unpaid FMLA coverage to paid in New York State. Workers value paid family and medical leave highly – at the same levels as long-established benefits like paid sick leave and personal days. They strongly, explicitly support the expansion of the FMLA to cover paid leave. And there is evidence that women’s status on the job would be significantly improved with the passage of the FMLA.
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Forthcoming IWW Cost Feasibility Study Because a detailed look at the implications of expanding the FMLA is needed, the Institute for Women and Work is now in the process of analyzing results of a primary follow-up study which will examine the cost feasibility of paid leave in New York State. We are in the process of processing results from a random sample of New Yorkers that determines in greater detail questions regarding the potential use of paid FMLA were it available to them, the reasons they would take it (for child care, elder care, self-care, etc.) and for what length of time. From this ongoing research information, we will be able to calculate, on an annual basis, the average annual cost of expanded FMLA coverage. Conclusion Our research and experience at the Institute for Women and Work at Cornell University strongly indicate a growing need for paid family and medical leave among dual wage earning and single parent families in New York State. Paid leave is a concept that is long overdue. Most other industrialized countries have such leave without dire consequences to businesses or the economy. In fact, the evidence suggests that paid leave can improve economic growth and productivity. We know that New York State has an unacceptably low rate of women in the paid labor force. We also are all too aware that the economic boom of the past decade has done little to improve the situation of depressed communities upstate and the working poor everywhere. Let’s take the lead in adopting a policy that will draw more people into the work force, allow hard-working New Yorkers to keep the jobs they already have, and increase productivity and growth. By expanding FMLA coverage, New York State has the opportunity to vastly
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improve our local economy and the lives of all working families. Thank you for the opportunity to testify.
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