Why Paid Family Leave Is Good for Everyone (Even People Who Don’t Use It)

The Rhode Island legislature voted last week to pass a law to give workers paid time off to care for a new child or seriously ill or injured family member. If Governor Lincoln Chafee signs the bill into law as expected Rhode Island will become the third state with some type of paid family leave policy, after California and New Jersey. Connecticut appointed a task force in May to consider the feasibility of such a policy, and Washington passed a law in 2007 but for now it remains unfunded. The federal Family and Medical Leave Act, passed in 1993, provides 12 weeks of job-guaranteed unpaid leave to workers in businesses with more than 50 employees, but nearly half of eligible workers say they cannot afford to take it. Paid leave proponents regularly point out that the U.S. joins only two other countries–Swaziland and Papua New Guinea–in notguaranteeing some paid maternity leave.

The Rhode Island law, reports Bryce Covert,

expands the state’s current Temporary Disability Insurance (TDI) program, which currently only covers those who need time off for a work-related illness or injury, to cover those who need family leave. Temporary Caregiver Insurance (TCI) will allow workers to pay into the program through a payroll deduction and then, starting January 2014, take up to four weeks of paid leave, which would rise to six weeks the year after and eight weeks by 2016. Paying into the program would cost someone making $43,000 a year 83 cents a week. The minimum weekly payment for the TDI program is currently $72 and the maximum is $752. It would cover nearly 80 percent of the state’s workforce.

Opponents of this type of law worry about the replacement cost of labor to cover workers on leave, particularly for small firms, though Rhode Island small business owners joined the coalition favoring passage. California and New Jerseyboth report PFL produced a positive or neutral impact on business. Savings usually come from worker retention and therefore reduced costs to recruit and train new employees. Even “card-carrying capitalists” should support family leave programs, writes Cali Yost in Forbes. She observes that state paid leave programs are wage replacement programs and therefore should be named more accurately “Family Leave Insurance.”

The impact of family leave legislation, whether state or federal, is felt well beyond the direct benefit an individual worker receives. Parental leave and similar policies hold potential to reduce workplacebias and stigma faced by all women and men with caregiving responsibilities. Shelley Correll of Stanford University explained recently at Harvard Business School’s “Gender and Work Research Symposium” how a family-friendly law can signal a broad social consensus about citizens’ rights to do both parenting and paid work. She explained that when such laws exist, bosses and co-workers reduce their negative judgments about people taking maternity, paternity, or other caregiving leaves-of-absence. Those judgments, in turn, influence positively managers’ assessments of and decisions about leave-taking employees–for example, whether they later deserve raises or promotions.

Correll described how the process works, citing her empirical research on workplace bias and the motherhood pay penalty:

In this experiment, participants learned that a firm was covered either by the Family and Medical Leave Act (FMLA) or by the Occupational Safety and Health Act (the control condition). They then rated several highly skilled employees who purportedly worked at a firm described as being covered by one of these two laws (FMLA or control). In the control condition, with no family-friendly law in place, mothers who had taken family leave were judged as less competent, less committed to their jobs, less promotable, and were offered smaller raises than childless women. Fathers who took leave were offered smaller raises than their childless counterparts, but they did not experience the other disadvantages that leave-taking mothers experienced.

Even a limited family-friendly law cuts parenthood wage penalties, Correll showed. A law signals to businesses a society’s recognition that female and male employees alike have the right to be evaluated based on the results of their work performance only–not their status as a mother or father. Hence, paid family leave laws nudge managers toward fair and impartial treatment of employees, especially caregivers. This type of organizational culture usually boosts employee morale and loyalty, creating a beneficial cycle of productivity gains and improved profitability for organizations and greater job security for employees.

Laws like paid family leave can reduce subtle and perhaps even unconscious discrimination in the workplace by signaling an expected, unbiased code of behavior for all organizational participants. Family-friendly policies such as Rhode Island’s new law prompt a broader positive result than their specific legal requirement targets. Caregivers receive a direct benefit from family leave programs: time off. But all employees reap the indirect benefit of a fairer workplace.