Select Page
20
March, 2018

Is Paid Family Leave on the Horizon?

Great Information

Awesome content, even better software. Just think what our technology could do for you.

Is Paid Family Leave on the Horizon?

This February marked the 25th anniversary of the signing of the Family and Medical Leave Act (FMLA) - the nation’s first and only national leave law. The FMLA provides up to 12 weeks of unpaid leave to care for a newborn, adopted or foster child, or care for personal or familial health conditions.

That’s all well and good, but the cherry on top is paid family leave. For example, the U.S. is currently the only industrialized country that doesn’t guarantee paid maternity leave. So what’s the deal with this controversial topic, and should American organizations make the move to offer compensated family leave? Ultimately it’s up to employers for now, but here are some things to consider about paid family leave.

The Current Landscape

All controversy and politics aside, paid family leave is a topic cropping up across the United States more and more since employee benefits and wellness are top of mind for organizations. Employers are beginning to realize the importance of a work-life balance for the average American working family and are making efforts to create a more supportive work environment. But unfortunately, only four states and the District of Columbia currently have mandated paid family leave policies including California, Minnesota, New Jersey, and New York. In fact, according to a research report from the Society for Human Resource Management (SHRM), only 17% of employers offer paid family leave. These paid family leave policies typically offer 55 to 67 percent of wages for 10 to 12 weeks.

Changing Times

Clearly, paid family leave is not a common method of paid time off (PTO), but there are many discussions within the government circulating this topic. As ethical, moral, and economic battles ensue, we want to offer the facts to keep you updated.

That’s all well and good, but the cherry on top is paid family leave. For example, the U.S. is currently the only industrialized country that doesn’t guarantee paid maternity leave. So what’s the deal with this controversial topic, and should American organizations make the move to offer compensated family leave? Ultimately it’s up to employers for now, but here are some things to consider about paid family leave.

The Current Landscape

All controversy and politics aside, paid family leave is a topic cropping up across the United States more and more since employee benefits and wellness are top of mind for organizations. Employers are beginning to realize the importance of a work-life balance for the average American working family and are making efforts to create a more supportive work environment. But unfortunately, only four states and the District of Columbia currently have mandated paid family leave policies including California, Minnesota, New Jersey, and New York. In fact, according to a research report from the Society for Human Resource Management (SHRM), only 17% of employers offer paid family leave. These paid family leave policies typically offer 55 to 67 percent of wages for 10 to 12 weeks.

Changing Times

Clearly, paid family leave is not a common method of paid time off (PTO), but there are many discussions within the government circulating this topic. As ethical, moral, and economic battles ensue, we want to offer the facts to keep you updated.

The Burden of Paid Family Leave

The most glaring issue of paid family leave is determining where the money should come from to pay employees in qualifying circumstances. Employers, as well as state and federal government entities, carry the potential burden of paying new mothers and fathers (or those caring for family members with serious health conditions) a percentage of their typical wages for unworked time.

paid family leave
This can be tricky because not only must they pay those qualified for paid family leave, but likely a temporary replacement as well. According to the same SHRM study, 82% of those surveyed say mothers should receive paid family leave following the birth or adoption of their child and 69% say fathers, too, should receive paid family leave. From this sample, an overwhelming percent of respondents believe the employer should pay the family leave.

Of course, if the burden of paying these wages falls on the shoulders of businesses, it’s important to structure any government-mandated benefit in a way that will not be detrimental to their financial well-being. One possible funding mechanism could be through a small increase on employee payroll taxes, but the verdict is still out on what the solution should be.

The Benefits of Paid Family Leave

So if paid family leave is such a potential burden on employers, why should this be enacted? The benefits employees will reap from it can vastly impact their professional careers and personal well-being.

Alleviating Employees’ Financial Distress

Unfortunately for some employees who are forced to take unpaid leave, the financial burden is extremely difficult to bear. Research shows that job loss and unpaid leave impose a financial hardship on many families during a time when they are incurring more expenses than usual due to a newborn. One study found U.S. households experienced a 10% decline in income after childbirth, and single mothers who live without other adults face a 42% drop.

Additionally, those who took unpaid leave after childbirth reported resorting to alternative methods to financially support themselves including taking on substantial debt, going on public assistance, and even cutting leave early and returning to work. Offering paid leave will result in lower stress for workers, making them more productive in the long run.

Increase Employee Satisfaction and Retention

Not only is insufficient paid family leave financially crippling for those employees relying on it, but it also can have negative effects on organizations. Having a paid leave policy in place promotes a positive, family-friendly work culture, providing workers with the confidence and peace of mind knowing there is stability in their position.

Furthermore, mothers with access to paid family leave are more likely to return to their employer post-leave than those who feel discouraged by a lack of support. Knowing they’re supported in their mission to maintain careers and families, women will be more likely to join the workforce in the first place. Financially, employers will benefit from higher retention by offering paid family leave as the cost to replace an employee far exceeds the temporary compensation they will provide.

Parting Thoughts

While there is still much to debate regarding paid family leave, employers should be mindful of those who must take a step back from work for personal reasons. Whether there is compensation associated with leave or not, respecting and valuing the balance of working families can go a long way.

If full long-term paid family leave is not a viable option for an organization, short-term disability is another form of paid leave. This benefit also offers a percentage of the worker’s wages, but for a truncated length of time. Some employers even guarantee an employee’s job will be held for them while on leave even though they are not subject to FMLA. No matter what is offered by employers, the benefits and efforts to lessen family burdens is welcomed and appreciated by employees.

The evidence proves workers of the nation believe paid family leave is a necessary monetary benefit that employers should provide. Organizations will reap overwhelming benefits in the form of higher employee retention from those men and women who feel valued, secure, and provided for during any necessary absences.

How aps can help

APS has a mission: to make payroll and HR easier. We provide our clients and partners with intuitive technology delivered with personalized service and support. Our unified solution is designed to simplify workforce management tasks. Process payroll in hours, not days. Automate HR workflows to be more strategic. Elevate the employee lifecycle with a single-system platform. We are APS, your workforce partner.

Businesses choose APS as their workforce partner because of our focus on the customer experience. As a result, we continually maintain 98% customer retention and satisfaction rates.

For more information on how we can help make payroll and HR easier for your business, please visit www.apspayroll.com or call 855-495-7921

icon-1-1

Training

Receive lifetime training from our team of experts to help you master the APS system at no additional cost to you.
icon-2-1

Support

Your dedicated support team is just a phone call, email, or support request away to answer any questions you may have.
Employee Communication

Success

Work with APS experts who understand your business, your challenges, and your goals for a quicker return on your investment.

Recent Posts

Check out more great articles from the APS Blog covering HR, payroll, and everything in between.

November 2019 Compliance Updates

November 2019 Compliance Updates

We’re looking at November 2019 compliance updates, including potential new overtime calculation factors, withholding methods and tables, and inflation-adjusted payroll amounts.

November 2019 C-Suite Chats with Christian Valiulis

November 2019 C-Suite Chats with Christian Valiulis

In November, our CRO & Forbes Business Development Council member, Christian Valiulis, answered questions about business topics like rebranding, long-term growth strategies, and incorporating philanthropy into brands. Here are his thoughts.

Pin It on Pinterest

Share This