Paid leave has always been an anathema to the corporate world, but the President’s State of the Union speech for 2015 wants that to change. As the economy shows definite signs of recovery, the President stressed the need to pass legislation which could guarantee workers the ability to accrue paid sick days. The President stated that early 39% of private sector workers (or 43 million individuals) are found to have no guarantee of paid sick days or paid maternity leave. Most of these workers earn low wages which make it hard for them to take the time off for recovery from an illness, as it would mean serious financial hardship. NOTE: These numbers have not been substantiated by the Department of Labor Bureau of Labor Statistics.
Many countries around the world require employers to offer paid time off for illness or the birth of a child. Only 12% of America’s workers enjoy paid family leave, while only 61% enjoy paid sick leave. Now, the Obama administration wants to bring a big change to America’s sick pay and family leave laws.
According to a survey by the International Labor Organization, only five nations did not offer some form of paid maternity leave: the United States, Papua New Guinea, Swaziland, Liberia and Lesotho.
The Family and Medical Leave Act (FMLA) requires that employers give employees unpaid leave when the employee needs to care for a family member with a “serious illness”, provided their company employs more than 50 employees. Unless the employer offers additional benefits, American parents are entitled to a total of 12 weeks of unpaid leave. Approximately 15% of Americans employed by smaller companies do not qualify for unpaid leave to care for their families.
The President’s proposal:
Is Paid Leave a Right or Privilege?
As expected, reaction to the President’s proposal has been mixed. Those who support paid leave legislation argue that companies offering paid leave have stronger brand images, avoid productivity drops resulting from spread of the flu or other infectious diseases, and have higher employee engagement rates. Those who oppose it speak to the financial burden placed on companies still struggling to recover from the recession. They suggest that it would be an impediment to companies seeking to expand the size of their workforce. They also argue that many employers already offer paid time off that can be used for illness or vacation, leaving the choice to the worker.
To sort through the rhetoric, let’s look at states and municipalities that have already implemented paid leave legislation. New Jersey, California, Rhode Island and Washington have paid family leave laws in place. In each case, funds come from a state insurance fund, not from the employer, and the worker receives a percentage of his/her normal salary. The District of Columbia also offers an employer-funded program.
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