Paid Family Leave

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Paid family leave lets workers get part of their pay while they take time off to care for a new baby or a seriously ill family member.

What it is

California's Paid Family Leave (PFL) pays workers who take time off from their job -- to bond with a new child, to care for a seriously ill family member, or to help when a relative is deployed by the military. Workers can get benefits for up to 8 weeks in a 12-month period, and the benefit replaces about 70% to 90% of past pay, with lower earners getting the biggest share. It is funded through State Disability Insurance (SDI), a state fund: the money is taken from workers' own paychecks, and employers collect it and send it to the state, but employers do not fund the benefit itself. PFL pays money, but it does not protect your job on its own -- other laws do that, like the federal FMLA and California's CFRA. California was the first state to offer PFL; benefits started on July 1, 2004. Research gives a mixed but real picture. Short leaves, under a year, tend to help women stay tied to their jobs and raise their employment years later, while very long leaves can do the opposite -- lowering women's pay and slowing their careers. Studies of U.S. state programs find small effects on employers, with little change to productivity, profits, turnover, or wages. Supporters and critics still disagree about the benefits and costs; the cases below give each side its strongest form.

How it works

California's Paid Family Leave started on July 1, 2004, the first state program of its kind. One key point drives much of the debate: PFL pays money, but it does not guarantee your job. Other laws do that. The federal Family and Medical Leave Act (FMLA) and California's Family Rights Act (CFRA) make some employers hold a worker's job open. In California, this job-protection rule now reaches firms with as few as 5 workers. So the real questions are simple: should government guarantee paid leave for everyone? Who should pay for it? And how much should small businesses have to carry?

The debate — equal weight, both sides

The case for guaranteeing paid family leave

Most often made by progressives, labor unions, and family, health, and women's advocates.

No worker should have to choose between a paycheck and caring for a new baby or a dying parent -- a public guarantee removes that hard choice. Paid leave is also tied to healthier families: research links it to longer breastfeeding, higher vaccination rates, fewer infant deaths, and better mental health for new mothers. And it helps keep women working. Mothers who use paid leave are less likely to quit their jobs and more likely to return to the same employer, and leave laws raise women's employment overall. Business fears are often overblown. Studies of California's program found lower turnover and little change in costs for employers -- in fact, most employers reported a positive effect or no noticeable effect. The benefit comes from a shared fund that workers pay into, so even the staff of a tiny company can get it. That is the fairest way to reach the workers who need it most.

The case against a government paid-leave guarantee

Most often made by conservatives, libertarians, and small-business groups.

Families matter, but a one-size government mandate can backfire and take choices away. Paid leave is never free: as one free-market analysis puts it, firms "offset this cost by reducing the value of workers' take-home pay," so workers often foot the bill through smaller paychecks -- this holds true even when the state runs the fund. The same analysis warns that paid-leave rules can "disproportionately harm low-income workers," many of whom may prefer bigger paychecks now. There is also a hiring risk. When leave raises the cost of employing someone, "demand for that worker falls," which can make some bosses wary of hiring or promoting workers they expect to take leave. Job-protection rules add real strain too -- firms with as few as 5 workers must now hold a job open for up to 12 weeks. Critics prefer options that do not raise hiring costs: a tax cut, they note, does not raise costs to employers, so it does not lower demand for workers.

Sources

Behind the summary

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