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Employee benefits snapshot: Why paid family and medical leave matters now

Maybe you know a dad who took paid paternity leave, or you have clients who benefited from paid family and medical leave when they adopted a child or took care of a sick family member.

More likely, though, you don’t. Paid family and medical leave (PFML) policies are more popular than ever, especially at the nation’s top companies. But that hasn’t yet translated into most American employees having access to paid leave benefits, or leave of any sort beyond what’s protected by the Family and Medical Leave Act (FMLA). For the 69% of workers who have needed to take a leave of absence because of a serious health event, that’s a problem.

  • Only 17% of workers in the United States have access to PFML through their employers.
  • Only 40% have access through employer-provided short-term disability coverage.
  • FMLA policies are available to less than 60% of workers; 89% of workers have access to unpaid family leave.
  • 59% of workers in 2020 missed a paycheck because of a serious health event, up 9 percentage points from 2019.

Paid leave is growing, however. According to a trend report from PL+US, a national campaign to win paid family and medical leave by 2022, caregiving leave is on the rise. Of 62 employers surveyed, 13 added or expanded PFML policies in 2019, benefiting 2.4 million workers. But without a more widespread embrace of family medical leave and comprehensive absence management plans, workers and employers can be left out.

Who gets paid family and medical leave – and who’s left behind

Sectors that are leading the way in expanding access to PFML include business and financial services, while those lagging include health services, education, transportation, manufacturing and hospitality.

On its face, paid leave looks like an industry-by-industry issue. But it translates to women, people of color and low-wage workers being left behind. These are the workers populating sectors with limited access to leave: Women dominate in education and health services; people of color account for more than a quarter of the workforce in transportation; and minimum-wage workers make up over half the workforce in hospitality.

The nation’s growing core of gig workers also don’t qualify for PFML and have zero access to any type of paid leave. Gig workers had access to sick pay in the form of tax credits under the Families First Coronavirus Response Act, but the bill is limited and doesn’t provide a long-term solution.

PFML desire trending upward, but policies lag

Top tech giants such as Intel, Microsoft and Google are paving the way with generous paid family and medical leave policies. But what about everyone else?

According to the Bureau of Labor Statistics, only 17% of private sector workers had access to paid family leave policies in 2018. Yet a Pew Research Center study reported in 2017 that Americans largely favor paid leave, and more than half (59%) think that employers, rather than federal or state governments, should cover the cost. Other findings:

  • 85% think workers should have paid leave to take care of their own health issues.
  • 82% say mothers should have paid leave after childbirth or adoption.
  • 69% agreed fathers should also have paid leave after the birth or adoption of a child.
  • 67% said workers should receive paid leave to care for a sick family member.
  • 45% favor government tax credits for employers that provide paid leave.

But it’s not just workers who benefit. Employees are likelier to be more satisfied with their benefits when paid leave is included – 70% of workers whose employers offer PFML are highly satisfied with their benefits, compared with just 49% of workers whose employers don’t. Given that 60% of employers say that supplemental coverage – which includes absence management programs that cover paid leave – helps retain talent, PFML can pay off for employers in the long run.

States are stepping up – and employers can too

Some states are taking action. New York increased its PFML policy to 10 weeks, Washington state launched a program in 2020 with up to 16 weeks of leave, and Massachusetts passed legislation taking effect in January 2021 offering up to 12 weeks for family caregiving and up to 20 weeks for personal medical issues. Other states may follow.

Laws are already implemented in California, New Jersey, Rhode Island, Washington, D.C., and Nevada and will go into effect in 2023 in Oregon, according to the Society for Human Resource Management, which declares that the nation must have a 21st-century policy that helps employers and employees alike with this issue.

Employers don’t have to wait for their states to step up, though. Benefits decision-makers may want to help employees, but staying within cost restraints is the No. 1 challenge faced by businesses, according to the Aflac WorkForces Report. Supplemental coverage gives these employers a way to protect their workers without bearing cost burden.

As a broker, positioning your offerings as a way to help your clients give their workers what they want doesn’t just allow you to show that you’re paying attention to families. It shows that you’re paying attention to your clients’ needs: the need to keep pace with a growing trend in employee benefits, the need to retain talent and the need to create a working environment centered in empathy for one of the greatest challenges Americans face today.