Paid Family Leave and Sick Days in the U.S.: Findings from the 2016 Kaiser/HRET Employer Health Benefits Survey
Workplace benefits are an important part of balancing work, family, and medical needs. So called “fringe benefits” such as paid family leave and sick days can help employees meet their personal and family health care needs, while also fulfilling work responsibilities. Yet there is no federal requirement for paid leave or sick days, which leaves many individuals, particularly low-income workers, to face tradeoffs such as taking time off while forgoing wages, going to work while sick, or paying for caretakers for their children and family members.
The federal Family and Medical Leave Act (FMLA) passed under the Clinton administration requires eligible employers to provide unpaid family leave. However, unlike most other developed nations, the U.S. does not have national standards on paid family or sick leave.1 In recent years, there have been a number of local and state initiatives to expand access to paid family leave and sick days in the U.S. Employees not covered by these local laws must rely on voluntary employer policies, which can vary considerably. This is particularly salient for women, who are often the primary caretakers for children and also comprise nearly half of the nation’s workers.2 Approximately seven in ten women with children under age 18 were in the labor market in 2015.3 The issue of paid leave received some attention during the 2016 election, but the incoming administration has not yet signaled any plans.
This data note summarizes state and local policies on paid family leave and sick days and presents new data from the 2016 Kaiser/HRET Employer Health Benefits Survey on the share of firms that offer paid parental leave and paid sick days benefits.
Federal, State, and Local Policies on Family Leave and Sick Days
FMLA and Unpaid Family Leave
Policies that address the balance of work and economic security with health and family needs have stalled at the federal level. The most recent national policy reform occurred in 1993, when the federal government passed the FMLA giving eligible employees up to 12 weeks of unpaid leave to care for seriously ill family members, the arrival of a child, and job protection when an employee returns from family or medical leave. The law applies to private employers with 50 or more employees, and public agencies. The law has provided job security to millions of workers who find themselves needing to take time off to care for a critically ill family member or a new child in the family. However, only 60% of the workforce is eligible for FMLA protections4 because small employers are exempt and even in covered worksites, not all employees are eligible.5 Since 1993, 11 states and the District of Columbia have expanded unpaid leave benefits past FMLA standards by either increasing the amount of leave time offered or expanding the definition of an eligible family member.6
Paid Family Leave
On the paid leave front, there have been a number of attempts to build upon the FMLA and enact national paid leave policy; however, they have largely stalled in a politically polarized Congress. Proponents urge that paid leave would provide employees with greater financial security when they must take an extended leave for medical reasons or to care for an ailing family member or new child.7 Opponents cite concerns about the impact of new federal requirements on local government and employers as well as the financial implications a new benefit would have on wages and employment.8 President Barack Obama’s administration issued an executive order that provides six weeks of paid family and medical leave for federal employees.
Currently, three states9 – California, New Jersey, and Rhode Island – have enacted and implemented laws offering paid family leave, and New York will join these ranks when its recently-passed law is fully implemented in 2018 (Figure 1). These states administer and fund paid leave through their own disability programs to allow certain workers to care for an ill family member or bond with a child. The programs are typically supported through employee and/or employer payroll taxes, and provide partial wage replacement up to a designated cap for employees in certain firms. Recently, D.C. passed a bill effective in 2020, providing paid family leave to certain private sector employees, funded through an employer tax.
Paid Sick Days
There is no federal requirement that employers allow employees to take sick days when they or a family member has a short-term illness that does not permit them to work. The Obama Administration issued an executive order that requires federal contractors to offer at least seven days of paid sick leave per year to their employees, on an accrual basis.10 At the time of enactment, this applied to approximately 300,000 people working on federal contracts. Furthermore, government employees have generally had access to paid sick days through employee benefits packages.11
There has been more state and local traction on paid sick days policies (Figure 2). Since the first law was passed by voter initiative in 2006 in San Francisco, seven states plus Washington DC,12 28 cities, and 2 counties passed laws requiring that eligible employees get paid time off to care for themselves or sick children. Several of these laws also specifically allow workers to use paid sick days for reasons related to caring for other sick family members, or in cases of sexual assault, harassment, or domestic violence. Current paid sick days laws generally work on an accrual basis, dependent on previous hours worked. The pay rate as well as amount of paid sick time that can be accrued varies by policy. Many recent laws are set for implementation in 2017 or later.13
Employer Health Benefits
Paid Parental Leave
The Kaiser/HRET survey 14 asked a nationally representative sample of non-federal public and private employers if they offered paid parental leave for the birth or adoption of a child and found that that one in three (33%) firms reported providing the benefit. The percentage of large (200 or more workers, 31%) and small firms (3-199 workers, 33%) is similar. Roughly one in three workers (34%) are employed in firms that offer paid parental leave.
Among large firms, the share that offers paid parental benefits varies based on the ownership structure of the firm (Figure 3). Firm ownership is thought to be an influencing factor in the provision of benefits, with research showing that nonprofits tend to provide more costly benefits.15 Private not for profits (40%) are the most likely to provide paid parental leave for the birth or adoption of a child, and private for profits (24%) least likely to do so.
Paid Sick Days
The Kaiser/HRET survey found that more firms provide paid sick days benefits than parental leave. About two in three firms (68%) provide their full time workers with paid sick days (Figure 4). Large firms are more likely to provide their full time workers with paid sick days (84%) compared to small firms (68%). While only a small fraction of (1.6%) of firms in the U.S. are classified as large, they employ approximately 62% of the nation’s workforce.16
Employee benefits are far less prevalent for part time workers17, but are more commonly found at large firms. Over half of large firms (55%) provide paid sick days for their part time workers, compared to 24% of small firms. Within these breakdowns, there is variance between different sizes of small and large firms in the provision of paid sick days, for both full and part time workers (Figure 5).
As a result, among non-federal employees, 80% work in firms that offer paid sick days to their full time workers and 50% work in firms that offer the benefit to part-time workers. The lower likelihood of paid sick days for part-time workers has a disproportionate impact on women, who are more likely than men to hold part time jobs.18 Women are also more likely than men to care for children when they are sick and have to stay home from school.
Much like paid parental leave, firm ownership type is also associated with the availability of paid sick days. Large firms classified as private for-profit (Figure 6) are less likely to offer paid days for their full time employees (72%) than public firms (96%) or private not-for-profit firms (97%). This is also the case for part time workers.
The presence of unions in firms may also influence a firm’s decision to provide paid sick leave. Large firms with at least some union workers are more likely to provide the benefit to both their full time and part time staff (90% and 64% respectively), versus firms with no union workers (82% for full time workers, 51% for part time workers).
Most people will need time off during their working lives to care for a personal or family illness, or for a new child, and paid family leave and paid sick days can be crucial financial supports during these periods. The newest Kaiser/HRET survey finds that a third of firms (33%) offer paid parental leave benefits. Two-thirds of firms (68%) offer paid sick days to full time workers and one-fourth (25%) offer paid sick days to part-time workers.
The movement for paid leave and paid sick days has largely centered on state and local policies or those voluntarily adopted by employers or negotiated through union contracts. Paid leave has emerged once again as a salient national policy issue in recent years. President Trump’s FY 2018 budget proposal includes funding for a new state program that would provide six weeks of paid leave for mothers and fathers upon the birth or adoption of a child. According to the budget proposal, states would have the latitude to design and finance the program through their unemployment insurance program, adjusting taxes as necessary to sustain a minimum balance of funds.19 As the budget process advances, it remains to be seen whether the 115th Congress will include this policy in the final budget bill and begin to shape a national policy that addresses paid leave for working parents.