Urban Institute Issues Public Comment on Labor Department Notice

WASHINGTON, Sept. 17 -- The Urban Institute has issued a public comment on the Department of Labor notice entitled "Request for Information: Paid Leave". The comment was written and posted on Sept. 14, 2020:

The comment was co-signed by Fernando Hernandez, research analyst, Chantel Boyens, principal policy associate, Heidi Hartmann, visiting fellow, Elisabeth Jacobs, senior fellow for research, Elizabeth Peters, institute fellow, and Jack Smalligan, senior fellow of policy.

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As paid leave policy researchers, we have dedicated our professional efforts to understanding the benefits and costs of paid leave in the United States, along with its effects on the health and economic well-being of workers, employers, the people being cared for, and society. We submit this public comment to the Department of Labor's Women's Bureau to provide evidence surrounding the costs and benefits of paid medical and family care leave. We are employed by the Urban Institute--a nonprofit research and policy organization based in Washington, DC--but the views we present are our own.

Introduction

Workers need to manage life and work responsibilities, including caring for their own medical needs and caring for family members, including an ill child or spouse or an aging parent. These care responsibilities may leave workers unable to perform paid work; and, without a reliable safety net, they may lose their income or their job. Lack of access to paid leave can be hardest on low-wage workers, women, communities of color, and--as the COVID-19 crisis has shown--essential service industry workers.

Paid leave with job protection, be it medical or family care leave, provides income and employment insurance to people balancing care responsibilities and work. Yet, the United States is the only high-income country that does not provide a federal, universal paid leave program for workers. The federal Family Medical Leave Act (FMLA) only provides access to 12 weeks of unpaid leave and job protection for about 60 percent of workers. The FMLA also limits the people considered family to a parent, spouse, or child (National Partnership 2020).

Only eight states and the District of Columbia have enacted paid leave for medical and family care with varying degrees of job protection for public and private employees. California's paid family leave program is the oldest (it was implemented in 2004) and, along with New Jersey's, one of the most studied programs in the country. The states that have enacted paid leave programs, many of which are modeled on California's plan, vary in duration of leave, wage replacement rates, and the degree of job protection offered. Many state programs rely on additional coverage from the FMLA to provide job protection, and the patchwork of programs providing coverage may be overwhelming to workers (National Partnership 2019).

Much of the research on the needs of workers and the effects of paid leave on employment and income, worker and family health, and the employer has focused on paid leave for new parents. More recently, Urban Institute researchers have focused on paid medical and family care leave. We address these two topics in this response./1

Medical Leave

When workers suffer a health-related emergency that requires an extended recovery period, paid medical leave can support this recovery and help protect people from major economic losses while they are unable to work. Yet, despite its important role as a safety net, paid medical leave is not universally available, and access may be related to a worker's race and ethnicity, income, and occupation (Smalligan and Boyens 2020). One study found that in 2011, 53 percent of working parents had access to paid sick/own medical leave,/2 but that share dropped to only 29 percent of Latinx workers, 18 percent of part-time workers, and 31 percent of noncitizen workers. In addition, only 25 percent of workers in households with income below the poverty level had access to paid sick/own medical leave compared with 62 percent of workers in households with income above 200 percent of the poverty level (Adelstein and Peters 2019). Although this evidence addresses paid sick leave, not medical leave, it suggests that low-wage Latinx workers may also have less access to paid medical leave.

But having access to paid medical leave coverage may not guarantee uptake. Workers may fear retaliation for taking leave and may be reluctant to take leave if they fear losing their job. Paid leave with job protection can mitigate job disruption or loss for employees and reduce rehiring costs for employers (Jacobs 2020). Workers also may not understand how to mesh their paid medical leave benefits, which may come from either the state (if provided publicly) or employers (if provided privately), with complementary benefits, such as the job protection provided by FMLA (Smalligan and Boyens 2020). Navigating this patchwork of systems may be complex, and people returning to work after a short-term disability may require additional supports to reintegrate successfully. These supports are especially important when the onset of a medical disability is linked to long-term loss of income and unemployment (Mudrazija and Smalligan 2019).

Benefits and Costs of Paid Medical Leave for Workers and Employers

EMPLOYMENT, INCOME, PRODUCTIVITY, AND PAID MEDICAL LEAVE

Some medical procedures are scheduled beforehand, while medical emergencies are sudden and unexpected. The income and employment effects of a medical emergency are also unplanned and unanticipated, threatening economic stability as people face greater risk of eviction and falling into poverty. Low- and middle-wage workers with limited or no savings are the most vulnerable to income disruptions and the ensuing economic hardship (Smalligan and Boyens 2020). Without savings, facing a health condition without wage replacement or job protection can have catastrophic economic effects. Data from the 2008 Survey of Income and Program Participation show that 5.1 percent of families experience an income disruption resulting from a health-related limitation (McKernan et al.2016).

Paid medical leave may reduce the risk of work separations resulting from medical emergencies. It may also reduce costs related to job search for workers or costs related to hiring and training for employers. Little evidence exists of the effects of paid medical leave, but one study finds that paid sick leave decreases the likelihood of suffering a job separation due to illness by at least 2.5 percentage points (Smalligan and Boyens 2020). Unfortunately, workers in states without a temporary disability insurance or paid family and medical leave program only have access to paid medical leave if their employer provided it.

HEALTH AND PAID MEDICAL LEAVE

There is little research on whether paid medical leave affects how a person manages their health. Yet, evidence from research on paid sick leave suggests that people with this benefit are more likely to seek preventive and early-treatment care and are less likely to seek medical attention through the emergency room (Smalligan and Boyens 2020).

Taking unpaid leave to address a medical condition is a common source of stress to individuals and families, in addition to the stresses of the medical condition itself. The medical field has widely documented the effects of stress on a person's physical and mental health (Thoits 2010).

What Does and Does Not Work Well, and Where Are the Gaps?

Workers taking paid medical leave generally return to work after an illness or injury without issue. Yet, some workers with serious illnesses and injuries have difficulty reintegrating into the workplace because of their medical condition. A well-designed program can both help a newly ill or injured worker stay financially stable and help the worker reintegrate when their medical condition has improved. Some important aspects of paid medical leave that help worker reintegration include job protection and providing return-to-work services.

JOB PROTECTION

Access to paid leave alone does not guarantee that employees will take leave to address their medical needs. The FMLA provides up to 12 weeks of unpaid, job-protected leave, but only about 60 percent of workers work for covered employers; workers who are not covered do not meet the annual hours of work or length of employment eligibility/3 requirements (National Partnership, 2020). Because eligibility is less than universal, the FMLA is an ineffective complement to paid medical leave mandates; relying on it means that too many workers go without job protection. The Pregnancy Discrimination Act and Americans with Disabilities Act provide additional job protections, but these laws also do not cover everyone with medical leave needs.

RETURN-TO-WORK SERVICES

Return-to-work services are good mechanisms to retain workers who take medical leave. Evidence suggests that these services have greatly increased worker retention for people who developed work-based impairments, while injured workers returned to work faster than those without access to return-to-work services. Return-to-work services can take many forms, but the most effective approaches improve coordination, communication, and services among the employee, the employer, the health care provider, and the worker's personal environment. The overriding focus is the workers' functional capacity and ability to stay at or return to work.

Effective early interventions can range in complexity. In some cases, they involve an employer providing a workplace accommodation in accordance with the Americans with Disabilities Act. This law obligates an employer to provide reasonable accommodations unless it would cause the company undue hardship. Frequently, breakdowns or gaps in the delivery of health care services need to be addressed. For example, a worker may be treated for one medical condition when another undetected condition is also affecting their ability to work.

The timeliness of the intervention is important for several reasons. First, intervening early, while a person is still connected to an employer (e.g., while on paid medical leave), preserves his or her best chance at staying employed and securing a workplace accommodation. The worker's current employer has the greatest incentive to provide necessary accommodations, because the employer can retain an experienced employee and avoid the cost of recruiting and training a new one.

Other Key Aspects of Paid Medical Leave

Lack of knowledge of existing policies may prevent employees from using benefits. Evidence from California suggests that lack of awareness is particularly important for more vulnerable workers. This is likely the product of ineffective outreach and education efforts (Jacobs 2020). Workers who are unaware of the policy may not take paid leave, even if they have access to the benefit, or they may confuse which benefits complement and substitute for each other, inadvertently facing the employment and poverty effects mentioned above.

Family Care Leave

Paid family care leave provides support for workers who are managing paid work with caring for a family member such as an aging parent, a seriously ill spouse/partner, or an adult or young child with a disability or serious medical condition./4

Care needs may vary in intensity and length, depending on whether the caregiver is helping someone with chronic or episodic conditions that may worsen over time or someone with one-time short-term medical emergencies or a planned medical event. In addition, eldercare recipients generally prefer to age in place and receive informal care from family members (Spillman et al. 2014). Women are more likely than men to provide care, and to provide more intense or complex care (DOL 2016). Paid family care leave can help support some of these caregiving experiences more easily than others. Research is still exploring the effects of paid family leave on wages, employment, caregiving, and caregiver health.

Care responsibilities have emotional and physical consequences. Eldercare in particular can be much more intense and may progressively increase over time, as cognitive and physical limitations require more hands-on care. In addition, caring for an aging family member usually ends with the death of the person cared for; this result may have emotional and physical effects usually not experienced during parental care for newborns or new adoptions. Unlike childcare for healthy children, there may be fewer market substitutes for family care, especially for eldercare. Flexible paid family care leave can help address many of these issues.

Caregivers may also decide to retire from work early, because of the difficulty in managing the dual roles of working and caring. This decision can affect wealth, and the consequences of early retirement are particularly severe for low-income women caring for an ill parent or spouse (Butrica and Karamcheva 2018; Fahle and McGarry 2018).

Employers may provide paid family care leave as part of their employee benefits. Larger employers and high-wage full-time workers are more likely to have paid family care leave (Jacobs 2020). However, like paid medical leave, no federal mandate allows for paid leave for family care. Evidence also points to coverage gaps for low-wage workers and communities of color; data from the 2011 Leave Module shows that Latinx workers and workers with incomes under the poverty level are less likely to have access to paid family leave (Adelstein and Peters 2019).

Paid family care leave uptake may also depend on the degree of wage replacement and job protection. Workers may not take paid family leave because of the economic impacts of receiving less than their full wages. In addition, a lack of job protection may keep workers from taking leave if they fear they will not be able to return to their job once their care responsibilities are satisfied (Peters et al. 2020). Finally, take-up may be affected by the information provided to employers and workers regarding their benefits. If workers are unaware of their benefits, then they may not use paid leave even if they have access to it.

Benefits and Costs of Paid Family Care Leave for Workers and Employers

EMPLOYMENT, INCOME, PRODUCTIVITY, AND PAID FAMILY LEAVE

Paid family care leave offers workers economic stability and security while they manage their care responsibilities. Wage replacement mitigates the effects of income disruptions and allows caregivers to have a steady, reliable income. It also smooths out income shocks, but the degree of wage replacement may trigger whether a worker may take paid family care leave.

Keeping your job and not losing any tenure at work because of care responsibilities are also important. Caregivers with job protection do not to have to worry about whether their job and position will be available once they return from their care responsibilities. Workers who are not given assurances that leave taking will not cost them their employment or tenure may not take leave. In some cases, workers drop out of the labor market altogether when paid leave is not available.

Workers may also face care needs that require flexibility. For instance, workers may need to run errands for a spouse or aging parent, go to doctor's appointments, or attend to an unexpected medical emergency. Many of these instances may be planned, yet they still require some degree of scheduling flexibility on behalf of the employer. Evidence from the 2011 American Time Use Survey found that 56 percent of all parent workers could change their schedule, and 58 percent could change their schedule and their work location (Adelstein and Peters 2019).

Employers also face hiring costs and increased training costs when workers leave. New employees need time to learn their job position and immerse themselves in the company culture. Allowing workers to return to work once they have taken time to address care needs can mitigate many of these costs. Overall, state paid family leave policies have had little additional costs to employers (Jacobs 2020). Both the California and New Jersey programs are funded by employees through payroll taxes; in other states with paid family leave programs, employers and employees share the cost (Jacobs, 2020, Smalligan and Boyens, 2020). In Washington DC, the new plan is fully funded by employers (National Partnership 2020), but these costs may be passed on to workers in lower wage increases over time.

Employers may also reap benefits from flexible paid family leave programs. Employers may see boosts to productivity if they can coordinate work schedules with a worker's caregiving. In addition, employers will be able to plan for replacements and work requirements in advance. Meanwhile, employees will be able to plan out their caregiving needs while balancing work and not have the stresses of juggling care and work (Jacobs 2020).

Very little evidence documents the costs of paid family care leave to workers and employers. One possibility is that paid family care leave allows workers to cover intermittent care needs without having to quit their job, retire early, or forgo wages by taking unpaid leave. Yet, paid family care leave may not cover more intense, extended care needs. This may be especially true for high-intensity care, such as caring for an aging parent or spouse with severe cognitive decline and multiple activities of daily living limitations (Isaacs, Healy, and Peters 2017).

BENEFITS TO CARE RECIPIENT

The person being cared for also receives important benefits. It is well-documented that care recipients prefer aging in place and receiving informal care from a family member over care in a more formal setting such as a nursing home (Spillman et al. 2014). A recent study found that paid family care leave may reduce nursing home use (Arora and Wolf 2017); specifically, nursing home use in California fell by about 11 percent between 1999 and 2008.

What Does and Does Not Work Well, and Where Are the Gaps?

LACK OF JOB PROTECTION AND FEARS OF RETALIATION

Studies have found evidence that workers may not be taking leave because they fear job loss and retaliation from employers (Jacobs 2020; Peters et al. 2020; Smalligan and Boyens 2020). Of the eight states that have enacted paid family care leave, Massachusetts, Oregon, and Connecticut offer job protection benefits; the remaining five states and the District of Columbia offer job protection, and workers taking leave would need to rely on FMLA job protection benefits.

Job loss is an important concern. Even if an employer does not fire a worker for taking paid family leave, it may still retaliate by demoting the worker or withholding promotions; such actions are also not allowed under job-protection policies, but these rules are more difficult to enforce. In a recent study of caregivers and Caregiver Resource Center staff, many that were interviewed reported either a perception that they would be penalized for taking paid family leave, or an impression created by their employer that it wasn't feasible, or employers providing incorrect information regarding eligibility and the process for accessing paid family leave (Peters et al. 2020).

KNOWLEDGE OF PAID FAMILY LEAVE BENEFITS

Another reason for not taking leave is that these working caregivers are unaware that they are eligible for paid family leave benefits. In interviews with caregivers from California and New Jersey, one study found that few respondents were aware of what paid family leave was, and many conflated it with the FMLA. Even some staff in caregiver resource agencies were largely unaware and consistently reported that clients rarely ask about caregiving leave (Peters et al. 2020). This reflects an important gap in knowledge of who is covered by the policy and what benefits are available to them. Employers could play an important role in communicating information to workers about who is covered and what benefits are available. A critical time to convey this information is during onboarding, as well as when a worker requests to take family care leave.

Conclusions

More research needs to be done to assess the cost and benefits to workers and employers of providing paid medical and family care leave. The care needs are distinct, but common to both is the need for wage replacement, job protection, and flexibility to take leave. Questions related to the degree of wage replacement, family definition, the ideal length of time, and what employers would be covered by the policy, have not yet been explored in depth.

The COVID-19 health crisis has also exposed a greater need for paid medical and family care leave. It has shown that some essential workers and communities of color are hardest hit by the crisis, and these same communities may have less access to paid leave. Evidence points to disparate paid leave coverage across the nation. A comprehensive federal paid leave policy would eliminate differences in coverage and would provide sustainability and scale to address the needs of administering a program like this. Universal coverage to all workers is essential to address disparities across income, race, and ethnicity.

Fernando Hernandez, Research Analyst, Urban Institute

Chantel Boyens, Principal Policy Associate, Urban Institute

Heidi Hartmann, Visiting Fellow, Urban Institute

Elisabeth Jacobs, Senior Fellow, Research, Urban Institute

Elizabeth Peters, Institute Fellow, Urban Institute

Jack Smalligan, Senior Fellow, Policy, Urban Institute

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References:

Adelstein, Shirley, and H. Elizabeth Peters. 2019. Parents' Access to Work-Family Supports. Washington, DC: Urban Institute.

Arora, Kanika, and Douglas A. Wolf. 2017. "Does Paid Family Leave Reduce Nursing Home Use? The California Experience." Journal of Policy Analysis and Management 37 (1): 38-62.

Butrica, B. A., & Karamcheva, N. S. (2018, May). In Debt and Approaching Retirement: Claim Social Security or Work Longer? In AEA Papers and Proceedings (Vol. 108, pp. 401-06).

DOL (US Department of Labor). 2016. Navigating the Demands of Work and Eldercare. Washington, DC: DOL.

Fahle, S., & McGarry, K. (2018). Caregiving and work: the relationship between labor market attachment and parental caregiving. Innovation in Aging, 2(Suppl 1), 580.

Isaacs, Julia, Olivia Healy, and H. Elizabeth Peters. 2017. "Paid Family Leave in the United States: Time for a New National Policy." Washington, DC: Urban Institute.

Jacobs, Elisabeth. 2020. "Evidence on the Benefits of Expanded Access to Family and Medical Leave." Statement before the US House of Representatives, Committee on Education and Labor, Subcommittee on Workforce Protections, Washington, DC, February 11.

McKernan, S. M., Ratcliffe, C., Braga, B., & Kalish, E. (2016). Thriving Residents, Thriving Cities. Urban Institute. April.

Mudrazija, Stipica, and Jack Smalligan. 2019. How Work-Limiting Health Shocks Affect Employment and Income. Washington, DC: Urban Institute.

National Partnership for Women & Families. 2020. Key Facts: The Family Medical Leave Act.

Washington, DC: National Partnership for Women & Families.

National Partnership (National Partnership for Women and Families). 2019. "Key Facts: The Family and Medical Leave Act." Washington, DC: National Partnership for Women and Families.

Peters, H. Elizabeth. Breno Braga, Barbara Butrica, Alexander Carther, Amelia Coffey, John Marotta, and Stipica Mudrazija. 2020. "Impacts of State Paid Family Leave Policies for Family Caregivers of Older Adults." Presented at the virtual fifth biennial conference of the Work and Family Researchers Network, September 11.

Smalligan, Jack, and Chantel Boyens. 2020. Paid Medical Leave Research: What We Know and What We Need to Know to Improve Health and Economic Well-Being in the United States. Washington, DC: Washington Center for Equitable Growth.

Spillman, Brenda C., Jennifer Wolff, Vicki A. Freedman, and Judith D. Kasper. 2014. Informal Caregiving for Older Americans: An Analysis of the 2011 National Study of Caregiving.

Washington, DC: US Department of Health and Human Services, Office of the Assistant Secretary for Planning and Evaluation.

Thoits, Peggy A. 2010. "Stress and Health: Major Findings and Policy Implications." Journal of Health and Social Behavior 51 (1_suppl): S41-S53.

Footnotes:

1/ We do not focus on paid sick leave either, because it addresses short-term medical emergencies. Rather, we focus on shortterm disabilities that limit the ability to work for an extended time. See Smalligan and Boyens (2020).

2/ Although our response focuses on medical leave, we recognize that the literature does not consistently separate paid sick leave from paid medical leave. Where possible, we indicate whether the evidence provided refers specifically to paid medical leave or may also refer to paid sick leave.

3/ Eligibility requirements include working 1,000 hours a year and 12 months for the same employer.

4/ Who is considered family may depend on the scope of the benefits provided by either or both state and employer paid family leave programs.

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The notice can be viewed at: https://beta.regulations.gov/document/DOL-2020-0004-0001

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