Paid Family Leave Funding Included in Budget

Feb 02, 2010

By Lexer Quamie

President Obama's budget for Fiscal Year 2011 makes a critical investment in the needs of working families.  The budget establishes $50 million for the State Paid Leave Fund, which is intended to provide competitive grants to assist in the start up of new paid family leave insurance programs in the states.  The Department of Labor will develop the grant program based on the models provided by existing family leave insurance programs, such as those in California and New Jersey.  State planning activities will include designing a paid leave program, establishing a protocol for legislation to withhold taxable wages, defining family eligibility and benefits requirements, and articulating start-up activities.

Paid family leave is a form of partial or complete income replacement for working adults who take time off from employment to care for a family member during a major life event.  These events include a serious illness, the birth of a baby or adoption, or foster placement of a child.  Without paid family leave, many workers must choose between their families or their paycheck.  Nearly 48 percent of private-sector workers do not have paid leave to care for themselves, and even fewer have leave available to care for another family member when they are ill.  State paid family leave insurance programs provide eligible workers with income replacement, typically paid for by a dedicated payroll tax.

Pending paid leave legislation - Last spring, Congresswoman Lynn Woolsey (D-CA) introduced the Family Income to Respond to Significant Transitions (FIRST) Act (H.R. 2339).  The FIRST Act would enable states to offer eligible workers a minimum of six weeks of paid leave to care for a newborn or newly adopted child, to recover from a serious health condition, or to care for a seriously ill family member.  With no paid family leave policy in place, in the event of a family medical crisis or child birth, many workers are forced to take unpaid leave or quit their jobs, often resulting in considerable economic distress. The distress is exacerbated for low-wage workers, who often lack savings and access to any paid leave, including vacation or paid sick days.  Paid family and medical leave would also help the millions of workers who cannot afford to take advantage of the unpaid leave provided by the Family and Medical Leave Act (FMLA).  Without some form of wage replacement, the FMLA's promise of job-protected leave is a chimera for too many women and men.  In fact, 78 percent of employees who qualified for FMLA leave and needed to take the leave did not because they could not afford to go without a paycheck. 

States have begun developing programs -  A growing number of states are proposing or passing paid family leave programs.  Both California and New Jersey have passed paid leave programs.  Washington's paid family leave program is currently awaiting a funding source for its planned October 2012 launch date.  Typically, the programs offer up to six weeks of benefits to workers who must take time off to care for a seriously ill child, spouse, parent, or recently adopted child.  In doing so, the programs may enhance job protection for many workers or help workers stay on their career paths. 

There is support among the advocacy community for incentive money to be paid to the states to create new programs.  A network of state and national coalitions and advocacy groups that work on policies such as paid sick days and affordable family leave also has called on Congress to encourage the states to adopt family and medical leave insurance programs by providing federal incentive money to the states.

Alternate sources of funding - In considering paid leave financing approaches, there may be alternative ways to structure and finance paid family leave programs, including adding family and medical leave to Social Security.  Or, expanding a temporary disability insurance program to provide paid family leave.

The proposed funding in the President's budget could help states provide much needed paid family leave to workers that currently must choose between their families and a paycheck. 

 

 

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