Correction: An earlier version of this story misstated the amount of paid time off that Morgan Stanley provides for parental leave. The firm provides four months, not four weeks, of paid parental leave. This version has been corrected.
On Wednesday, workers in Rhode Island will be among the few in the nation able to, by law, take several weeks of paid leave to care for a newborn, adopted or foster child, or to care for a seriously ill relative.
Rhode Island, where paid family leave was approved by wide margins in the state House and Senate in just one session in July, joins California and New Jersey as the only states to offer workers family leave that is paid not by taxpayers or employers but, like Social Security, out of a pool of employee paycheck contributions.
Washington state has yet to implement a similar law that lawmakers passed in 2008. New York and Massachusetts have paid-leave bills pending. Connecticut, Vermont and New Hampshire have formed task forces to study the issue. Several states, including North Carolina, Colorado and Oregon, have considered it and may move bills again.
The moves on the state level, advocates say, are a sign that people are tired of waiting for Congress to act to bring workplace laws dating to the 1930s, when a majority of mothers were at home, in line with a modern workforce, in which a majority of mothers work.
“It’s about time we did this. We need laws that recognize the way we work and live has changed,” said Gayle Goldin, the Rhode Island Democratic senator who successfully championed the paid-leave law there. “Internationally, we stick out like a sore thumb.”
Now, lawmakers in Congress are attempting to pass paid family leave as a federal law.
“We’re seeing that some of the best Fortune 500 companies already offer paid leave — Ernst & Young, Google, Deloitte,” said Sen. Kirsten Gillibrand (D-N.Y.), who recently introduced the Family Medical Insurance Leave Act, or Family Act.
Under the 20-year-old Family Medical Leave Act, or FMLA, eligible workers are entitled to 12 weeks of job-protected unpaid family leave every year to care for an infant or sick relative. The United States, alone among all advanced economies and many developed nations, has no national policy allowing paid family leave. Other countries give families as much as one year of paid leave, which is divided between mothers and fathers.
The FMLA covers employees who have worked full time for at least one year at a company with more than 50 employees. A Labor Department survey released in February found that 40 percent of the U.S. workforce is not eligible. And many of those who are, the survey noted, cannot afford to take it.
Some business groups and lawmakers, worried about the sluggish economy and weak job growth, say that paid-leave laws could hurt businesses.
“At a time when there are soaring deficits and many business are still struggling, paid leave becomes yet another entitlement program,” said Lisa Horn, a senior government relations adviser for the Society for Human Resource Management, a business group that, along with local chambers of commerce and the National Federation of Independent Business, has fought paid family leave. “That’s a difficult pill for the business community to swallow.”
Doreen Costa, a Rhode Island Republican lawmaker who voted against paid family leave this summer, said she thinks that it will hurt small businesses in her district.
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“It’s bad here. Businesses in my district aren’t just hurting, they’re closing,” she said. “I’m very concerned about what will happen in January.”
In Rhode Island, workers pay 1.2 percent of the first $61,400 in earnings into the state’s Temporary Disability Insurance to cover off-the-job injury and illness. The new law opens that fund to workers who need to care for a new child or sick family member, and gives them up to four weeks of job-protected leave paid at about 60 percent of their salary, up to a cap of about $750 a week.
The California and New Jersey paid family leave programs work much the same way, although the leaves, which are up to six weeks long in both states, are not job-protected.
A majority of nearly 300 California businesses surveyed by a D.C. nonpartisan research centerreported in 2011 a positive or neutral effect of paid leave on profits, turnover and productivity. Ninety-nine percent said it boosted employee morale. And 91 percent found no abuse of the system, which has been a major sticking point for many opponents in the business community. Those that did said it was “rare.”
The California paid-leave law passed in one session in 2002, despite fierce lobbying against it by nearly 1,000 businesses. The push for it included not just working mothers but a vocal group of fathers and “sandwich generation” workers, responsible for caring for aging parents.
In New Jersey, a coalition of business owners including Herb Greenberg, chief executive of a recruiting company, joined the fight for paid family leave, saying that retaining “top talent” by providing flexibility to handle work and family demands was a “no-brainer.”
It is support from businesses that has given the growing grass-roots movement steam, advocates say. A recent poll for the Small Business Majority found that two-thirds have formal or informal leave programs and a plurality support employee-funded paid family leave.
“There’s a real convergence around these issues now,” said Ellen Bravo, head of Family Values @ Work, a coalition pushing for family-friendly workplace policies.
Gillibrand said family-friendly policies “not only make for a healthier work environment and more productive employees, but more loyal employees, because they have the flexibility they need to take care of their families.”
But the federal Family Act faces steep hurdles in Congress. The FMLA took nearly a decade of often bitter debate before it passed Congress and was signed into law in 1993. Smaller attempts to pass paid leave for federal workers have failed repeatedly in recent years. And opponents in the business community warn against saddling strapped businesses with another government mandate.
“We’re all about the voluntary approach,” the SHRM’s Horn said.
A March survey by the Labor Department found that voluntary paid leave policies cover about 12 percent of the U.S. workforce.
The survey also found that about half of all new mothers take no leave and return immediately to work. And the main reason people don’t use the leave when they need it is because they can’t afford to.
Tom Nides, a former deputy secretary of state under Hillary Rodham Clinton and current vice chairman of Morgan Stanley, is one of several business leaders, along with the Main Street Alliance, the American Sustainable Business Council and others, who have thrown their support behind the federal proposal for paid family leave.
Although Nides’s wife works and his firm offers four months of paid parental leave, he said it was during his tenure at the State Department that he first became aware of how much new parents struggle to take time off and to pay for it.
“I was flabbergasted,” he said. “Shame on me, but I had no idea how they were borrowing vacation days from friends and co-workers, four days here, five days there, to be able to afford time with their new babies. I thought, ‘This is insane. How can we operate as a country like this?’ [Paid leave] is just the right thing to do.”