Increasingly, companies are offering workers paid leave and other benefits voluntarily. Policymakers should take care not to disrupt this positive trend, but should embrace reforms to make it easier for workers to prepare for absences from work.
POLICYMAKERS SHOULD MAKEIT EASIER TO PREPARE FOR ABSENCES FROM WORK
- While the vast majority of full-time workers have access to some form of paid leave, many workers, particularly low-wage and part-time workers, lack suﬃcient paid time oﬀ.
- Policymakers can help address this problem by updating the Fair Labor Standards Act to give workers the option to be compensated for overtime work with time-and-a-half of paid leave rather than extra pay. This would give workers the opportunity to accrue paid time oﬀ for future use, such as following the birth of a baby or caring for a sick family member.
- Policymakers should also expand health savings accounts to allow workers to use those funds to replace income lost during unpaid leaves from work.
THESE BUDGET-NEUTRAL REFORMS WOULD HELP WORKERS HELP THEMSELVES
- These reforms would make it easier to for people to take leave when they need it.
- Hourly and low-income workers have a harder time taking leave. This would give them the option to bank unpaid time and save up for when they need the leave.
- Leave reforms would increase ﬁnancial security for Americans who live paycheck-to-paycheck.
AMERICANS NEED TO HEAR THE BENEFITS AND DRAWBACKS OF ALL PAID LEAVE PROPOSALS
- While expanding HSAs and reforming the FairLabor Standards Act would not solve the entire problem, these reforms would be a step in the right direction and avoid some of the pitfalls associated with other proposals such as:
- Paid leave entitlement programs supported by leading progressives would backﬁre on female workers and limit their employment opportunities.
- Payroll taxes for government leave entitlement programs would mean all workers would have less in their paychecks.
- Research shows that low-income workers are less likely to use beneﬁts from paid-leave government programs, meaning they pay fora program that disproportionately beneﬁts those with higher incomes.
Click here to read the full policy focus and learn more about how policymakers can help workers prepare for leave time.