March 9 2009
Get the Facts: Government-Mandated Leave Benefits
There are numerous pending proposals to either expand the Family and Medical Leave Act (FMLA) or to create new federal mandates and programs to provide workers with more generous leave benefits. These proposals, however, would limit the ability of adults to freely enter into a contract with one another, discourage job creation, and encourage outsourcing.
The proposals would raise the cost of employment, encouraging employers to hire fewer workers and eliminate jobs, and mean that employees would receive more of their compensation in the form of benefits instead of take-home pay. In short, they would infringe on personal freedom and hurt the economy. Instead, policymakers ought to reduce cumbersome workplace regulations so that employers and employees have the freedom to negotiate mutually beneficial work arrangements.
Examples of Proposed Expansions of Leave Benefits
- Mandate Paid Leave: Although many companies already provide workers with paid leave, new proposals would create new federal requirements for leave.
- Broadening Acceptable Reasons for Paid Leave: Currently the FMLA allows individuals to take leave for the caring of a new child or a family member's serious health conditions. Some propose expanding paid leave to include other situations, such as participation in children's academic activities and routine medical exams.
- Broadening Eligibility of Paid Leave: Under current law, workers must work a minimum of a year or 1,250 hours to be eligible for FMLA leave. Some proposals expand that coverage to part-time workers. Other proposals would require smaller businesses to comply with FMLA standards.
- Taxation of Employees: Certain proposals call for new, dedicated payroll taxes to fund government-provided benefits. Legislation to create "The Federal Paid Leave Program," for example, would make employees pay .2 percent of their annual earnings into the Family and Medical Leave Insurance Trust Fund.
- Standardized Leave Benefits: Government mandates may unintentionally encourage some companies to scale back, instead of augment leave programs. For example, companies that currently provide more generous "personal leave" may not be considered in compliance with "paid sick leave" requirements so may reduce employee flexibility and limit leave options.
- Rising Labor Costs: Providing employees with leave benefits entails real costs. As labor costs rise, companies will opt to hire fewer, more highly skilled workers to perform functions that might previously have been distributed among two or more employees.
- Abuse of Leave Policies: Unlike the money portion of compensation, leave benefits are only accessible to employees in certain circumstances. Unfortunately, abuse is common. For example, the Society for Human Resource Management (SHRM) recently found that half of the human-resource professionals surveyed reported having to approve leave that they thought was unjustified.
To help employees, instead of creating more employment mandates, government should find ways to encourage a flourishing economy and private sector so that workers have many options for job arrangements and can negotiate a contract that fits their personal needs.
All information taken from Expanding the Family and Medical Leave Act and Other Government Mandated Leave Benefits: A Preview of the 111th Congress, a publication by the Independent Women's Forum, available at iwf.org.