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Here’s What You Need to Know About the FAMILY Act

A proposal to un-complicate care for millions of working families. 

Here’s What You Need to Know About the FAMILY Act

Ivanka Trump isn’t the only one  pushing for paid leave in Washington.

U.S. Sen. Kirsten Gillibrand (D-NY) and Rep. Rosa DeLauro (D-Conn.) are reintroducing the Family and Medical Insurance Leave Act, more commonly known as the FAMILY Act.

In this post, we’ll cover a few things Americans, and the companies they work for, need to know about the bill that would provide paid family leave for all of our nation’s workers.

Paid Leave for All

The FAMILY Act would put a system in place to allow working moms to take maternity leave, dads to take paternity leave and all workers to take time off to care for themselves or ailing loved ones. The proposal calls for a gender-neutral program providing 60 days – the equivalent of standard 12 work weeks – of paid family leave to every American worker, regardless of the size of their company. Currently, the United States has no federal policy providing paid family leave.

Three states – California, New Jersey and Rhode Island – have policies. New York passed a law in 2016 that will take effect in 2018. Washington state passed parental leave legislation in 2007, but the watered down bill was never funded. The state is once again considering paid leave, after lawmakers introduced a proposal for what would be the nation’s most generous paid family leave policy.

But Really Though, Most American Workers Have No Paid Leave

Today, about 14 percent of private sector workers have access to an employer-provided paid leave program.  That means 86 percent don’t. The United States is the only OECD nation without a federal policy providing paid leave for new mothers after the birth of a child. The Family and Medical Leave Act (FMLA) provides 12 weeks of unpaid job protection for workers at companies with 50 or more employees who have been with their employer for a year. About 40 percent of the workforce is ineligible for FMLA due to the restrictions of the law. The absence of a federal policy hits women especially hard. Through FMLA, short-term disability, vacation and the like, many moms are able to cobble together some kind of makeshift maternity leave. Yet nearly one in four women returns to work within two weeks of giving birth, according to an analysis of Department of Labor Data commissioned by In These Times.

To put another number on it, we estimated number of adults who care for adults or children in a given year (43.5 million), factored in AARP’s estimate that 60 percent of those caregivers are employed and subtracted 14 percent to account for public sector workers who already have access to paid family leave through an employer.  An additional 22.4 million working mothers, fathers, sons and daughters could gain access to paid family leave under a plan like the FAMILY Act.

Third Time’s a Charm?

This is will be the third time Gillibrand and DeLauro have introduced the FAMILY Act. It went first before Congress in 2013 and again in 2015, when it was read twice in the Senate and referred to Committee on Finance, while in the House it reached the Subcommittee on Social Security, according to FORTUNE. Could the FAMILY Act fare better in 2017?

Its reintroduction—before a Republican-controlled Congress—comes after an election in which family-friendly policies, including paid leave and child care, were a focus. On the campaign trail, Trump proposed a policy to provide six weeks of maternity leave for women after the birth of a child, to be paid at the same amount she would collect in unemployment benefits. Paid leave was also a topic at meetings dinners Ivanka Trump, an influential advisor to her father, has held to discuss issues of women’s economic empowerment with business leaders. A recent Washington Post piece reported the possible expansion of Trump’s paid leave plan include paternity leave, but noted the White House has not confirmed that speculation even though paid leave remains a “top priority.”

What this means for the FAMILY Act is unclear. By including all family caregivers, Gillibrand and Delauro’s proposal is more comprehensive, both in length and scope, than even an expansion of Trump’s plans would appear to be. There are also apparent differences in the funding and administration of FAMILY Act and Trump’s campaign proposal.  

Modeled After Existing Programs

The FAMILY Act would create a self-sufficient, independent trust within the Social Security Administration to collect and administer funds. This trust would be funded through employer and employee contributions, equaling two-tenths of one percent of wages. That amounts to two cents for every $10 earned, or an average contribution about $2 from per week per worker. To put it another way, that’s about a cup of coffee a week.  

Benefit levels received by workers would max out at 66 percent of the employee’s typical monthly wage. This model is based on existing programs in California, New Jersey and Rhode Island. New York’s state policy calls for a similar program.

Supporters of the FAMILY Act point to California as evidence that government-supported paid family leave would not place too high a burden on businesses. A survey of California employers found 90 percent said state’s program had a “positive effect” or “no noticeable effect” on their profitability over its first 10 years, according to a report from the Center for Economic and Policy Research.

Backed by Business Leaders

Evidence of paid leave having a positive business impact is mounting in the private sector, as well. Early adopters, like Google and Ryan, have reported reduced turnover and improved productivity after implementing policies. Online retailer Etsy recently shared that nearly half of the employees who used its gender-neutral parental leave policy were promoted within the year. For a larger-scale look, a new report from the Boston Consulting Group found “paid family leave offers a healthy return” on investment based on a study of 250 companies that offer the benefit. 

A number business leaders have lent their support for the FAMILY Act over the past several years. Execs from Morgan Stanley, VICE Media and YouTube stood behind the proposal in 2015. CEO Sheila Lirio Marcelo has written about Care’s support for the bill, and music streaming service Spotify endorsed the FAMILY Act in fall 2016. 

More than a million Millennials are becoming moms every year. Paid leave is exactly the type of work-life support today’s top young talent expects to receive — whether from their employers or the government. An EY survey even found 38 percent of Millennials would be willing to move to another country for better paid leave. In this sense, paid leave plays an important role in our ability to compete in a global economy. 

Benefits for All

Supporters have of the FAMILY Act spoken to the business case for family leave, as well as the impact on children, families and the economy. It’s easy to connect the dots.

The United States is a nation of working caregivers. About 70% of moms and more than 90% of dads work outside of the home, and 60% of families don’t have a stay-at-home parent. At the same time, 43.5 million adults provide unpaid care to a child or adult, according to AARP estimates.  But our lack of working family-friendly policies is hurting us.

In 2016, analysis from the Center for American Progress found working families in the U.S. lose out on nearly $30 billion in wages due to lack of access to affordable child care and paid family and medical leave. The lost wages occur when employees are forced to choose between work and family, because family always wins out. Businesses, in turn, feel the impact, as care-related absenteeism and other distractions cost tens of billions annually in lost productivity.

For families, the benefits of paid leave are evident in the short term and the long term.

Research suggests parental leave policies provide health benefits that extend to children, such as higher birth rate and lower infant mortality. Moms with access to paid leave are far more likely to remain in the workforce – and with their pre-birth employer – than those without. When fathers take paternity leave, they’re more likely to remain involved in sharing parenting responsibilities throughout their child’s life.  Senior care responsibilities are forcing millions of employees in their 40s and 50s to make career adjustments – many of which wouldn’t be necessary if they had access to paid family leave.

In Sum

At some point in our lives, all of us are touched by care. Whether we’re parents, taking care of our parents or receiving care ourselves, everyone will someday, someway be in one of these positions.

For many Americans, those situations are complicated by the lack of paid family leave. The FAMILY Act, a gender-neutral proposal covering all manners of care, seeks to un-complicate care for our working families.

Wish you had benefits like paid family leave at your job? Click this link to check out our ebook, then send it to HR at your job.