Paid Family Leave Expands to the Federal Government
December 15, 2020 in Keeping Up with Human Capital
By Justin Fuhrmann
One of the most substantial expansion of benefits for federal employees in 25 years went into effect on October 1, 2020. The Federal Employee Paid Leave Act enables federal workers to take up to 12 weeks of paid time off for the birth, adoption, or placement of a new child. Eligibility for this benefit and how it compares to the private sector in the U.S., and to family leave policies throughout the developed world, are discussed below.
Not all federal employees are eligible to receive this new benefit. The 12 weeks of paid family leave is a substitute for the Family and Medical Leave Act (FMLA) and therefore, in order to be eligible for paid leave, an employee must also be eligible for FMLA. FMLA eligibility requires that an employee have at least 12 months of federal service and work a full or part-time schedule. Employees who are eligible must use the benefit during the 12 months following the birth or placement of the child, otherwise the benefit expires with no option to carry over. Employees who are not eligible initially when a child is born, or placed, but become eligible during the 12 months following the birth or placement, can still use this new benefit.
Comparing to the Private Sector
A Congressional Research Service report from 2019 found that only 16% of private industry workers had access to employer-provided paid family leave. Access varied widely by industry, with 41% of Information workers having employer-paid leave, while only 6% of Construction workers were offered the same benefit. Access also tended to be more heavily distributed to workers with higher average wages, with 27% of worker’s in the top 25% of wage earners having access to paid parental leave and only 7% of workers in the bottom 25% of wage earners having access. The generosity of these leave policies varies widely, with Netflix offering 52 weeks of paid time, while other companies offered as few as two weeks of paid time. Even these companies offering a comparatively modest benefit of only two weeks are still offering something that the vast majority of U.S. employees are without.
States Filling In the Gaps
A small number of states have enacted family leave insurance programs, providing a cash benefit to eligible workers taking on caregiving activities. Five states: California, New Jersey, New York, Rhode Island, Washington, and the District of Columbia have enacted such policies and Massachusetts is implementing their own program in 2021. The duration of these benefits ranges from 4 weeks to 12 weeks. These state programs have enabled more Americans than ever before to have access to paid parental leave.
34 of the 35 countries in the Organization for Economic Co-operation and Development (OECD) provide some form of national paid maternity leave. The United States is the lone exception. Similar to the U.S. private sector, the generosity in duration, and wage replacement, varies widely across each country with Australia offering 7 weeks and Estonia offering 85 weeks. 27 of the 35 OECD countries also provide some form of national paid paternity leave. Canada, Czech Republic, Ireland, Israel, New Zealand, Slovak Republic, Switzerland, and the United States lack this benefit, while Japan offers over 30 weeks of paid time off.
How Much Is the Right Amount of Family Leave?
The Pew Research Center has found that Americans widely support paid family leave, but disagree on who should pay (e.g., employers, federal government, state government) and how long the leave policy should allow for. A high profile example of one organization reducing the length of it’s offered family leave policy is the Bill and Melinda Gates Foundation, which started offering 52 weeks of paid leave in 2015, but reduced that benefit to 26 weeks in 2019 because the longer leave duration was negatively impacting the work of the foundation. It is worth noting, however, that with the reduction of the leave benefit, the organization offered a $20,000 stipend for new parents to spend on child care costs and family needs once they return to work and 26 weeks of paid leave is still significantly more generous than most U.S. employers.
There is a growing consensus that approximately six months of paid leave is optimal for enabling parents to achieve the benefits of caring for and bonding with a new child, while not overly burdening employers or substantially impacting the likelihood that those taking paid leave are less likely to end up in senior employment positions. In nations with paid maternity leave policies of one year or longer, more women return to the workforce after having a child, but these women returning from longer leaves are also more likely to remain in lower-level positions throughout their careers.
The Federal Employee Paid Leave Act, while falling short of what studies have found to be the optimal amount of paid leave time, represents a significant expansion of gender-neutral paid family leave in the United States. How this policy may impact recruitment and retention in the federal workforce will need to be monitored over the coming years to gauge the policy’s impact. Paid family leave is likely to continue to expand throughout the U.S. private sector as more employers attempt to seek and retain top talent. Do you have any personal experience with paid family leave? How much paid family leave time are you permitted to take at your employer, in your state, or in your country?
If you were eligible to take paid family leave, did you take all the time permitted? Share your thoughts about family leave with us on LinkedIn!
Justin Fuhrmann joined FMP in April 2015 and works with the National Geospatial-Intelligence Agency on policy analysis and formulation, employee benefits, benchmarking and interviewing. Justin is from Bergen County, NJ and now lives in Arlington, VA with his wife and three daughters. Outside of work you can find him skiing, hiking, or exploring the DC monuments.