Kristin Shapiro joins to discuss this month’s IWF’s policy focus: paid leave and the pandemic. As more lawmakers argue that a paid leave entitlement will help “workplaces and communities respond more effectively and equitably” to a pandemic, we discuss whether or not that’s true and also what some of the unintended consequences may be.
Kristin is a Senior Fellow with Independent Women’s Forum. Kristin clerked for Chief Judge Alex Kozinski on the United States Court of Appeals for the Ninth Circuit. Following her clerkship, Kristin practiced law as an associate at Williams & Connolly where she litigated numerous cases in the United States Supreme Court. Kristin then served as Assistant General Counsel in the Office of General Counsel of the U.S. House of Representatives for three years, and is now an attorney for the federal government.
Transcript
Beverly:
And welcome to She Thinks, a podcast where you’re allowed to think for yourself. I’m your host, Beverly Hallberg. And on today’s episode, we discuss this month’s IWS policy focus, paid leave and the pandemic. As more lawmakers argue that a paid leave entitlement will help, “workplaces and communities respond more effectively and equitably to a pandemic” we’ll discuss whether or not that is true. And, also, what some of the unintended consequences may be. Kristin Shapiro joins us to break it all down.
Kristin is a senior fellow with Independent Women’s Forum. She clerked for Chief Judge Alex Kozinski on the US Court of Appeals for the Ninth Circuit. Following her clerkship, Kristin practiced law as an associate at Williams & Connolly, where she litigated numerous cases in the US Supreme Court. She then served as assistant general counsel in the Office of the General Counsel of the US House of Representatives for three years. And is now an attorney for the federal government.
Kristin, a pleasure to have you on today.
Kristin:
Thank you so much, Beverly.
Beverly:
And I want to let everyone listening know that if they are interested in reading more about this, we are going to delve into paid leave today, they can go to iwf.org. So check it out. You can download the policy focus there.
But Kristin, the first question I have for you is, can you define for us what paid leave is? I know it comprises not just one area, but at least a couple.
Kristin:
Yes. So I would divide paid leave into two subsets. The first subset is paid sick leave, and paid sick leave is a benefit that would provide workers with a limited number of sick days each year, for example, seven days per year, if you are sick. And, though, proponents of paid sick leave mandates, typically, call for imposing a mandate on businesses that they provide their workers with a certain number of days of sick leave per year.
Then, the second subset is paid family and medical leave. And this program would be designed to provide workers with income or support for an extended absence from work due to their own illness, or the need to care for a family member, or a new child. And this sort of program, proponents of this program generally propose to fund it by increasing payroll taxes on employers and employees.
Beverly:
So, Kristin, I want to, for reference sake, back up a little bit and talk about the fact that many of us work for employers that already provide sick time, vacation time, if there’s a family emergency we can use some flex days for that. So, it seems that this is something that employers have done all along. So, how new is it that there is a government mandated version of this?
Kristin:
Absolutely. Well, there is no current federal mandate for a paid leave, or a paid sick leave with the exception of the recent Families First Coronavirus Response Act did provide a limited federal sick leave and entitlement. However, on the state level, paid sick leave and paid medical leave is gaining traction. Currently, 13 states mandate paid sick leave, and about five states have paid family and medical leave programs in effect, with three other states and the District of Columbia having recently passed such laws, although they have not yet taken effect. But as you mentioned, Beverly, more and more employers, even absent being in a state that mandates them to provide paid family medical or paid sick leave, are providing that on their own because it’s a very popular benefit for employees.
Beverly:
And so, we’re going to get to the pandemic, and how that relates, and how different lawmakers want to expand it. But let’s, first, talk about the impacts of whether it’s statewide, or if there ever was a federal mandate to paid sick leave, or paid family leave. What are you finding are some of those unintended consequences?
Kristin:
Yeah, well, they tend to be pretty costly for both employers and employees. So, taking it, first, with paid sick leave, a mandate on employers, an unfunded government mandate that they provide sick leave. And so, that is money that, initially, comes out of the employer’s pocket that they have to provide this benefit without any money from the government. And that could be very costly, particularly, for small businesses, and businesses whose margins are razor thin. But, as we know, the employers will find every way they can, understandably, to pass these costs onto their employees. So, ultimately, the likely effect of a paid sick leave mandate would be reduced compensation for employees. And that is what we have seen in areas that have passed paid sick leave mandates. For example, after the passage of San Francisco’s paid sick leave mandate, nearly 40% of employers, who were forced to add a sick leave benefit, reduces employee compensation as a result. So, that is an unintended negative consequence of passing a paid sick leave mandate.
On the paid family and medical leave side it’s a little different because that’s funded by increasing payroll taxes rather than an unfunded mandate on business. And economists widely agree that even if you impose a payroll tax on the employers, employers will pass that cost along onto the employees in the form of reduced compensation. So, really what you’re looking at is taking money out of every employee’s paycheck to fund this program. And so, this is particularly harmful for low income families, particularly because research has shown that programs, paid family and medical leave programs tend to disproportionately benefit middle and upper class families. So, what you would be doing is you are forcing low income families to fund a program that they receive disproportionately little benefit from.
Beverly:
And so, from my own personal experience in having a business that is incorporated in Washington DC, I recently started getting those requests by the city here to say that you have to pay into paid family leave. So, we are required to, so I do it. Obviously, it’s burdensome to have to pay the amount that they’re asking. And, just for information, I would have allowed my staff, which is very small, we only have three full-time staff, if they had a family emergency, or maternity leave we would figure that out. So, this isn’t a mandate we needed. But the question I have is, so this money goes to the District of Columbia, if we don’t use it what happens to the pot of money? Like this is money we may never see. Is this just kind of like a big insurance program for anybody who needs to tap into it? And is there any type of oversight of what happens to the money if it’s not used for these purposes?
Kristin:
That’s exactly right, Beverly. It’s a giant social insurance program, it’s not specific to the business. And so, that means that as to your business, unfortunately for you guys, you have to pay these taxes, no matter what, even if your employees don’t use the benefit. And so, you would effectively be funding a benefit for employees of other businesses at that point, rather than your own employees because it’s a giant communal pot. And as for the level of oversight, I’m not entirely sure. I mean, the governments, typically, have systems in place to ensure that they’re not paying benefits when individuals don’t qualify. But I do believe that, particularly in the context of personal illness and family caregiving, it can be difficult to verify that employees are entitled to qualify for the benefit. And so, there is a fear of abuse of the program among employees that employees will be more likely to say, “Well, gosh, my back really hurts me, so I’m going to take 12 weeks off from work because I’m entitled to under this program,” even though it’s really not necessary, and they really don’t have a serious illness.
Beverly:
So, let’s talk about what this means, if lawmakers wanted to extend this during a pandemic, during COVID-19. What are some lawmakers suggesting? Are these lawmakers on the state level or on the federal level?
Kristin:
You see the push at all levels of government, but at the federal level, especially, a lot of more progressive lawmakers have been using the coronavirus as a reason to push paid sick leave and paid family and medical leave at the federal level. The argument that they make is that these programs are necessary to ensure an effective response to a pandemic. And particularly the argument that they’re making is that the pandemic is showing that nobody wants sick workers to go to work. And if workers, they say, don’t have paid leave, then they are likely to show up at work while they are infectious, and pass that along to other employees.
And I can jump right ahead to, what’s probably the next question is, whether or not they’re right on that? Well, first I would say with respect to paid family and medical leave, I have seen no evidence that paid family and medical leave would combat the spread of infectious disease. That’s simply not what paid family medical leave program is set up to do. The programs, typically, have waiting periods before workers are eligible for benefits, such as they have to be gone from work for a certain number of days, or weeks before they even qualify for benefits. And it can take weeks to actually receive a check under the program.
Washington recently began their program, Washington state, and they had problems with a huge weeks long back load for workers to actually receive a check. And these programs, paid family medical leave is simply not designed to support workers to stay home the first few days of an illness, that’s not what they’re set up to do.
Paid sick leave is a little different. There are mixed studies of paid sick leave in the states that have adopted them, and in other countries. There’s some evidence, some studies that suggest they might decrease the incidents of contagious illness by a small percentage, while other studies have found that they’re not effective at all at combating the spread of contagious illness. So, the best that can be said is that the research is conflicting, and the policy’s clearly not a panacea for combating a pandemic.
I’ll note that the 13 states I mentioned earlier that already have mandated paid sick leave, those states are among that the states that have been most impacted early, and hard by the pandemics, such as New York and New Jersey. So, while, comparisons among states are difficult to draw, the practical evidence on the ground also suggests that this is simply not a policy that we want to be focusing on when we’re considering what is going to prevent the next pandemic.
Beverly:
And when it comes to somebody who wanted to receive this type of benefit, if this was enacted, doesn’t this overlap with unemployment? Isn’t unemployment supposed to be there for people who, in plenty, it’s very valid they have a health issue, and they are definitely in that category of people who could have major issues, if they do contract COVID, isn’t unemployment supposed to cover this?
Kristin:
Well, I know that they’ve modified unemployment to some extent temporarily for the coronavirus, such as employees who cannot return to work because of their health might be eligible for unemployment benefits. The greater overlap you see with these programs would be a disability. So, to the extent that there’s federal disability insurance, as well as any state disability benefits. I think the reason you see a push for these benefits, the paid sick leave and paid family and medical leave is that there are gaps in that coverage, particularly, short-term disability is typically, right now, if you don’t get it from your employer you might be able to buy into a policy. But, otherwise, it’s a benefit that you need more of a long-term disability to qualify for federal disability insurance. So, that is why you see the push.
It is important when policymakers are considering these bills to consider the overlap of benefits, so that benefits aren’t duplicated because that would, basically, be a waste of money.
Beverly:
And this is the question of the day. So, I mean, you’re quoting the research, you were saying this is not necessarily going to help people during this pandemic. But let’s say government did enact this, would it be rolled back when the pandemic is over? Now, of course, we don’t know when the pandemic’s over, if there will ever be a vaccine, but is it like all other government programs that once this is created, we just created a whole nother entitlement that we’re never going to be able to put back in the bag?
Kristin:
Yeah so, I think that if we just leave it at what was enacted in the Families First Coronavirus Response Act, it is unlikely to be extended. [inaudible 00:13:14] you haven’t seen too much press coverage. I don’t think there’d be an outcry from workers that suddenly are … this is such a truly generous situation that we’re living in now. But, if policymakers extend it further and broaden the benefits, and extend the deadline, then you are increasing the risk that it will be more difficult to roll back a benefit.
I mean, there are many alternatives that I lay out in my piece to paid family and medical leave, and paid sick leave, permanent entitlement. One of them is, if policymakers are really gung ho, and they believe that a paid sick leave mandate, or a paid family and medical leave mandate will, for some reason notwithstanding the evidence, help address a pandemic then, at a bare minimum, what they should do is make it a temporary benefit, time limited that is available upon the declaration of a public health emergency.
The pandemic rationale that we need paid leave because of a pandemic only applies in once in 100 years situation that is not a reason to enact a permanent entitlement. And so, it will be very easy to craft legislation that allows the benefit to kick in only upon the declaration of a public health emergency.
Beverly:
And final question for you is, what is the likelihood that we are going to see lawmakers push forward with this? So, where are we on them enacting more legislation?
Kristin:
So, I think it’s possible that a benefit, a temporary benefit might be extended, but time limited to the pandemic. I would be shocked if a permanent federal program along the lines of the ones we’ve discussed is enacted as a result of any upcoming legislation. It is possible one of the alternatives, and the policy focus outlines multiple fiscally conservative, budget neutral alternatives, ways that we can support families in these times of need without increasing taxes, or imposing expensive mandates on business. But one of them that I think potentially could be enacted, at least as a trial program, a five-year pilot would be allowing parents to advance a portion of the child tax credit. This is a bipartisan proposal for a paid parental leave program. And that possible benefit, which I fully support and I think is a great idea to give an added flexibility to an already existing government benefit without increasing the size of government, it might get snuck in as one of the million provisions that are snuck into the next coronavirus relief bill. But it’s a little too soon to tell.
Beverly:
And that’s what’s great about the IWF policy focus is that there’s always solutions in there. So, it’s not just talking about the problems, and what we shouldn’t do, but it also talks about good solutions that we can have. So, Kristin, thank you for laying some of those out, and thank you for joining us today. We appreciate it.
Kristin:
My pleasure. Have a wonderful day.
Beverly:
And thank you for joining us. If you like what you’re hearing on She Thinks, then you won’t want to miss out on the latest news from Independent Women’s Forum, sign up for mobile inside alerts and email updates by going to iwf.org. Last, if you enjoyed this episode of She Thinks, do leave us a review on iTunes, or wherever you get your podcasts, it does help. And we’d love it, if you shared this episode, and let your friends know where they can find more She Thinks conversations. From all of us here at Independent Women’s Forum, thanks for listening.