Budget Proposal Invests in Paid Leave

Mar 04, 2014

By Liz Ben-Ishai

President Obama’s budget proposal, released today, sends a strong endorsement of policies that support working families – and that includes family leave. The proposal includes a total of $105 million to support a State Paid Leave Fund. These funds would provide technical assistance and support to states considering following in the footsteps of California, New Jersey, and Rhode Island -- the only states in the country to offer paid family leave insurance. The proposal has both a base budget, which offers his priorities for spending within the agreed-upon spending limits in his base budget, and an Opportunity, Growth, and Security  Initiative, which would fund additional priorities by closing tax loopholes and making other reforms.  The latter initiative includes $100 million for the paid leave fund, while the base budget includes $5 million for the State Paid Leave Fund, as it has in previous years. The base budget also strengthens enforcement of existing laws, including the unpaid Family and Medical Leave Act (FMLA), by calling for an increase of more than $41 million for the U.S. Department of Labor’s Wage and Hour Division.

As Americans express growing concern about increasing inequalities in our society, the President’s support for paid leave appropriately targets a policy that is crucial for low-wage workers. Only 5 percent of low-wage workers have access to paid family leave. Furthermore, workers from communities of color – regardless of their income -- are far less likely to have paid leave, with only 25 percent of Latino workers having access. As a result of widespread lack of paid leave, low-wage workers often forgo leave or take far too little time to care for loved ones. Of those workers earning below the median family income, more than half report losing all their income when they take family or medical leave. However, in states where paid leave is available, workers and businesses are thriving. For example, in California, 91 percent of workers surveyed report a positive effect on their ability to care for a new child, and nine out of ten employers report positive or no effects on business operations.

The budget highlights the Administration’s strong support for an increased minimum wage, while also directing resources towards enforcement of the current minimum wage. The increased Wage and Hour Division funding, which would allow for the hiring of 300 new investigators across the country, will help to ensure that workers earn the minimum wage, get paid for overtime, and are protected from workplace injuries. Moreover, the funding would help with enforcement of the Family and Medical Leave Act (FMLA), which celebrated its 21st anniversary last month. The FMLA provides job-protected, unpaid leave to about half of all workers. For these workers, the guarantee that their job will be held for them while they recover from serious illness, bond with a new child, or care for a sick loved one, is crucial to economic and family stability. However, without strong enforcement of the FMLA and other labor standards, many workers are denied their rights. The President’s allocation of considerable new funding for the Wage and Hour Division is designed to protect the most vulnerable workers from unscrupulous employers.  

Today’s budget proposal is in keeping with Americans’ concerns with equality and opportunity for all workers. In particular, the significant investment in both paid leave and unpaid leave enforcement, as well as enforcement of other labor standards, stands to make a real difference in the lives of low-income families across the country.

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