Tuesday, August 8, 2017

Paid Family Leave Figures are Misleading

By Vanessa Brown Calder of Cato.
"AEI scholar Abby McCloskey’s recent column on paid family leave argues that just “12 percent of private-sector employees have access to paid family leave from their employer.” For McCloskey, this is one of many reasons that the federal government should create a paid family leave entitlement program.

The 12 percent figure surely sounds appallingly low. In fact, it is so low that it seems suspect: it doesn’t match well with real-life experience or casual observation. The figure also doesn’t match with data from nationally representative surveys. For example, 63 percent of employed mothers said their employer provided paid maternity leave benefits in one national study, a 50 percentage point difference from the most recent BLS figure.[1]

So what gives? It seems many U.S. women take paid parental leave, but the Bureau of Labor Statistics (BLS) doesn’t count it. The BLS requires paid family leave be provided “in addition to any sick leave, vacation, personal leave, or short-term disability leave that is available to the employee.” This means that when employees take paid leave for family purposes, it doesn’t count if it could have been used for another purpose.

In the real world, parents with conventional benefit programs often save and pool paid personal leave, vacation, sick leave, and short-term disability in the event of a birth or adoption. On average, employees with five years of service are provided 22 days of sick and vacation leave. A majority of private-sector employees can carry over unused sick days from previous years, which adds to the tally. Meanwhile, the median short-term disability benefit is 26 weeks for private-sector workers; six to eight weeks can be used toward paid maternity leave.

These benefits do exactly the same thing as paid family leave. As Human Resources Inc. puts it, “family-leave is usually created from a variety of benefits that include sick leave, vacation, holiday time, personal days, short-term disability…” And although not all employers, especially small businesses, have official paid family leave policies, “Many employers are flexible and can work out an agreement with you.” Benefits that aren’t spelled out in the company manual are surely undercounted by BLS figures, too.

Paid leave doesn’t always fit neatly under the BLS’s survey categories for other reasons.

Unconventional benefit packages, like consolidated paid leave (or PTO banks) allow employees to use paid leave for any reason, family or otherwise. Consolidated paid leave is on the rise; the BLS reports that 35 percent of private-sector employees receive it. In some industries, more than half of employees receive this flexible benefit.

Unlimited paid leave plans are also growing in certain industries. These plans allow employees to take as much leave as they want, whenever they want, assuming they meet performance expectations. But unlimited and consolidated paid leave don’t provide paid family leave separately, so neither count.
As a result, BLS figures seem to grossly underestimate paid family leave availability. BLS methods penalize employers that provide flexible benefits, by pretending their benefits don’t exist.

This helps to explain why BLS figures differ dramatically from other surveys. In spite of that, don’t expect government-sponsored paid leave advocates to update their figures any time soon."

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