In Focus: Business Leadership and Job Quality

Aug 1, 2014  |  PERMALINK »

Paid Leave: A No-Brainer for Businesses and a Lifesaver for Workers

By Liz Ben-Ishai

Could it be that workers whose employers offer leave benefits actually end up getting sick less often because they are happier? Senator Al Franken (D-MN), tongue firmly in cheek, proposed this “radical” idea at a hearing on paid leave held by the Senate Health Economic Labor and Pensions (HELP) Committee’s Subcommittee on Children and Families. Franken’s comments echo all the evidence: paid leave is a no-brainer that benefits both workers and employers. Unfortunately, far too many workers still lack paid leave, including paid sick days and paid family and medical leave.

The hearing, convened by Senator Kay Hagan (D-NC), drew attention to the dire circumstances facing U.S. workers who need time away from work to welcome a new child, care for a sick loved one, or recover from serious illness. Witnesses testified to the importance of paid leave for families’ economic security, the value to employers of offering such programs, and the growing body of evidence that shows the effectiveness of existing paid leave programs. The critical importance of this issue was evidenced by the attendance of seven senators: Casey (D-PA), Franken (D-MN), Hagan (D-NC), Harkin (D-IA), Murphy (D-CT), Murray (D-WA), and Warren (D-MA).

Those who oppose paid leave policies often express concern about their effect on businesses. However, testimony from Kevin Trapani, CEO and president of The Redwoods Group, and Maryella Gockel, flexibility leader at Ernst & Young LLP, demonstrates that such worries are misguided. Indeed, for these employers, as well as for businesses in the states that have passed paid family leave insurance laws (California, Rhode Island, and New Jersey), there has been no evidence of what witness Vicki Shabo of the National Partnership for Women & Families called the “parade of horribles”—a litany of negative business implications predicted by critics.

Trapani, whose business offers generous leave benefits, described the importance of meeting his employees’ needs so that they can best  perform important work for clients and the community. Paid leave has been crucial to the well-being of many Redwoods employees, said Trapani. For example, one employee took paid leave to care for his sick father, who lives out of town. He told Trapani, “My dad may not have survived if I hadn’t been here.” And at Redwoods, paid leave doesn’t just benefit  employees grappling with grave personal matters; it pays dividends for  the company’s bottom line. Redwood’s turnover rate for the past 10 years is only 5 percent, generating major  cost savings and increased productivity from a loyal workforce.

Ernst & Young’s Gockel explained how paid leave and other benefits have nearly closed the gap in retention rates between male and female employees at her company; in the mid-90s, she said, women were leaving the company at a much faster rate than men. Beyond the impact of such disparities on women’s ability to advance in their careers, Gockel noted that high rates of turnover are costly. For a mid-level worker, said Gockel, it costs between 1.5 and two times the worker’s annual salary to hire and train a replacement.

Jeannine Sato’s experience, recounted at the hearing, brings the retention and turnover numbers to life. In a previous job, when Sato had her first child, she found that her employer was not covered by the Family and Medical Leave Act (FMLA) because it had multiple offices that were more than 75 miles apart, meaning the number of employees at each location could not be combined for FMLA eligibility purposes. This obscure provision meant that Sato was not eligible for 12 weeks of unpaid leave under the law—and her employer was unwilling to accommodate her needs. As the family breadwinner, she had no choice but to go back to work just six weeks after giving birth. Soon, she was looking for a new job. “Even a big raise couldn’t keep me there,” she said. Sure enough, Sato had found  new employment less than a year later. Workers like Sato offer a lesson to employers about the consequences of not providing paid leave: while it may prevent a valued employee’s temporary absence, it could cause you to lose them permanently.

While some employers haven’t caught on yet, there are many who are aware of the importance of providing paid leave. Unfortunately, despite many high-road employers taking action, others are not in a position to do so because of the financial burden of extended paid leaves. However, legislation introduced in Congress last December would help such well-intentioned employers to do right by their workers. Using small contributions from employers and employees, the Family and Medical Leave Insurance (FAMILY) Act would create a trust fund for workers to draw on when they need to take leave. Such a social insurance program is appealing to workers and employers alike, as evidenced by support from many small businesses and a growing group of diverse business leaders from across the country.

Jun 24, 2014  |  PERMALINK »

HuffPo Live Asks: What’s Fair for Working Families?

By Fatima Cervantes

Government officials, policy advocates, and everyday Americans talked fairness for working families during a HuffPost Live Q & A session that set the table for yesterday’s White House Summit on Working Families.

The inclusive conversation brought out rarely discussed features of the workplace. When asked about fair pay, Uncommon Goods Warehouse Supervisor Sha’Ron Burden explained that it helps “you feel more dedication to your teammates.” In Burden’s experience, an employee’s loyalty to a company is closely tied to the respect with which their employer treats them.

U.S. Secretary of Labor Thomas Perez discussed efforts to raise the minimum wage, protect home health care workers, and regulate overtime pay. Perez highlighted changes in the workforce, noting that while the number of working women and households with two working parents has increased, the U.S. has not responded with family-supporting policies. To address this concern,  he called for the passage of paid sick leave  and family medical leave laws, citing the success of state laws in Connecticut (sick leave) and California (family leave).

HuffPo Live host Alyona Minkovsk raised a common, if misguided, concern of paid leave opponents; they suggest paid-leave will cut into businesses’ bottom line and lead to higher prices for consumers. But despite the opposition from some businesses, campaigns for earned sick days and family leave are going strong. Secretary Perez highlighted numerous studies showing the benefits of paid leave.  “There are businesses that have voluntarily instituted paid-leave programs [and] have seen their stock prices actually go up,” he explained. “ And businesses who are the first in their area to do it see their stock prices rise even higher…” 

David Bolotsky, founder and CEO of UncommonGoods, provided insight on fair practices.  He said he has always paid employees higher rates than the minimum wage because it’s both the right thing to do and good for business. In fact, Bolotsky attributes his company’s consistent growth to his philosophy on fair pay. UncommonGoods is an on-record supporter of paid family leave law. And he’s not alone; many businesses are actively demonstrating their support.

Bolotsky added that when businesses fail to provide their employees living wages, it forces the government to intervene to protect workers. Analilia Mejia, executive director of New Jersey Working Families, echoed the point: the government should not be subsidizing poverty-level jobs.

 Perez recognized these changes would require persistence, but he seemed ready for the challenge. “Americans need a raise and we’re going to keep fighting.”

The Q & A session served as a good foundation for The White House Summit on Working Families which continued to explore these efforts to support working families’ relief from poverty and the strengthening of the middle class.

May 8, 2014  |  PERMALINK »

The FAMILY Act is Best for Babies

 By Lauren French

The first few months of children’s lives are crucial for their cognitive, social and emotional development. Social interactions with primary caregivers during these early stages are essential to shaping the architecture of babies’ brains. However, this critical bonding time is often limited by two important factors in parents’ lives: time and money. To ensure that mothers and fathers are able to provide the best possible care for their young children, members of Congress have introduced the Family and Medical Insurance Leave (FAMILY) Act. This law would allow workers to receive a portion of their pay for up to 12 weeks after the birth or adoption of a child, as well as during their own serious illness or that of a close family member.   

MomsRising, ZERO TO THREE, and the National Partnership for Women & Families hosted a congressional briefing on Wednesday, which focused on the child development case for paid family and medical leave. The briefing was co-hosted by Senator Kirsten Gillibrand and Representative Rosa DeLauro, who introduced the FAMILY Act. This legislation would fill a big void – only 12 percent of workers in the United States have access to paid family leave and few employers offer paid maternity or paternity leave. This means that parents are often forced by economic necessity to sacrifice critical bonding time with a new baby in order to return to work.

The relationship that forms between a parent and child in the first weeks of life is critical to healthy development. Babies who develop close relationships with their caregivers at a young age are better able to deal with adversity, which “can mean the difference between positive and negative outcomes for children throughout their lives.” This early bonding time also allows parents to develop into better mothers and fathers, as it takes time to establish the routines that will influence a child’s cognitive, social, and emotional development.

Paid family leave is also crucial to the health of young children. Time at home allows parents to take babies to well-child visits and immunization appointments. Furthermore, paid family leave allows mothers to breastfeed for longer, which reduces rates of childhood infection. Dr. David Bromberg of the American Academy of Pediatrics, which has endorsed the FAMILY Act, pronounced that paid leave is “a right and a need that every child in this country should have.”

Many employers are also realizing that what’s good for families is good for business. At the congressional briefing, Marcia St. Hilaire-Finn, owner of Bright Start Child Care and Preschool spoke in support of the legislation, stating, “As a business owner, I firmly believe that the FAMILY Act would be a tremendous help to small businesses like mine, and the dedicated staff that we employ.” Hilaire-Finn noted that by enabling her to provide paid family and medical leave without having to bear the full cost, the Act would allow her to compete with larger employers and retain high-quality staff. The FAMILY Act creates a social insurance system that is supported by small contributions from workers and employers.

Paid family and medical leave is long overdue in this country, and this legislation is a common-sense policy that would be good for babies, parents, and for the economy.


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