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To Build Back Better, Paid Family Leave Must Support Work

A primary objective of a paid family leave (PFL) program is to keep leave-takers attached to the workforce. PFL helps working caregivers—particularly women—stay in the labor force, support their households, and grow the economy. To maximize these workforce benefits, a PFL program should be designed as an earned benefit that is targeted at workers. As lawmakers mull modifications to the proposal currently under consideration, Congress should strengthen workforce attachment by making two important changes:

  • Requiring employment at the time an application for the benefit is filed.
  • Removing unemployment compensation from the definition of wages that determine eligibility and benefit amounts.

These modifications would not only enhance the PFL program’s capacity to support working families and help the economy—it would also help ensure the program’s long-term durability.

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Providing Leave Supports Work

In the Build Back Better Act, the reconciliation package currently under consideration on Capitol Hill, House Democrats have taken a major step toward a comprehensive PFL program. PFL—especially paid parental leave—has broad bipartisan support and can bring significant benefits to workers, parents, and children.

These benefits stem, in large part, from PFL’s unique ability to support workforce attachment by preventing the substantial career disruptions that can result from caregiving and parenting responsibilities, particularly for women and people of color. A robust body of economic research demonstrates that by enabling employees to take time away from work for caregiving, PFL increases the chances that workers return to their jobs. Key findings include:

  • California’s paid leave program increased weekly work hours of employed mothers by 10% to 17% and increased the likelihood of female employment one year after childbirth by 23%.
  • Women who take paid family leave after giving birth are 40% more likely to return to work than those without the benefit.
  • A decade after childbirth, the labor force participation rate among women who received paid family leave is 82%, compared to 64% of women who quit during pregnancy.

The economic and workforce benefits of PFL have been particularly important during the COVID-19 pandemic, which resulted in substantial caregiving responsibilities that impacted women, families, and workers. Recent BPC-Morning Consult polling revealed that 71% of adults with paid family leave say the benefit helped them continue to work during the pandemic and that 37% of unemployed adults say they would be more likely to return to work sooner if their employer offered PFL.

The centrality of labor force participation to PFL is recognized by every state with a PFL program (and the majority of OECD nations), which administer PFL as an “earned benefit,” requiring a combination of recent work and earnings to be eligible. Under these programs, individuals must make a minimum amount of payroll contributions and/or work for a minimum period to access the PFL benefit.

Leave benefits currently offered by the federal government have similar requirements. Under the Family and Medical Leave Act of 1993 (FMLA), which provides unpaid leave, employees are eligible for the leave benefit after 12 months with a single employer (as well as at least 1,250 hours of work in the 12 months immediately preceding leave). The Federal Employee Paid Leave Act (FEPLA), enacted in 2019, provides paid parental leave to federal employees. FEPLA’s eligibility requirements are the same as FMLA’s, but leave-takers must also commit to working for their current federal employer for at least 12 weeks after returning from leave.

Paid Family Leave in the Build Back Better Act

The House Democrats’ reconciliation PFL proposal allows virtually all workers to take paid leave for up to 12 weeks to bond with a child, to care for a loved one or oneself if experiencing a serious health condition, or to handle circumstances arising from a loved one’s military deployment. However, benefits are not as tightly tied to work as in existing state and federal programs.

First, the program will not require claimants to be employed when they apply for leave, making the benefit, for some, a cash transfer rather than a paid leave benefit. Moreover, eligibility for the program will follow from any wages or self-employment income at all in a recent seven- to nine-month period. To some extent, the proposed method of calculating benefits as a percentage of previous earnings alleviates concerns over such minimal work or earnings requirements: to receive a benefit, one must earn a substantial amount during the base period. Still, to receive the benefit, claimants should be taking leave from a current job.

Second, the proposal includes unemployment insurance benefits in its definition of qualifying wages, meaning that UI benefits can be used to qualify for and calculate PFL benefits. This further erodes the core concept of paid leave as an earned benefit that supports both caregivers and work.

Requiring claimants to be employed at the time of their leave application and removing UI benefits from the definition of qualifying wages will help the Build Back Better proposal accomplish these aims.

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