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July 11 2018

What you need to know about the GOP’s proposed family leave bill

Fast Company
featuring Carrie L. Lukas

The debate about whether or not the U.S. will join nearly every other developed country in the world in offering a federally mandated paid family leave is up for a major discussion in the Senate.

The U.S. Senate Finance Subcommittee on Social Security, Pensions, and Family Policy is holding a hearing today on paid family leave to examine the GOP’s legislative proposal originally spearheaded by the Independent Women’s Forum (IWF) and backed by Senators Marco Rubio (R-FL), Joni Ernst (R-IA), and Mike Lee (R-UT). Senior White House adviser and first daughter Ivanka Trump who has advocated for paid parental leave isn’t formally endorsing it but has called the bill a “good option.”

Here are the basics:

This is an add-on to an existing law that gives businesses tax cuts.This proposed bill is meant to build on the Tax Cuts and Jobs Act that offers businesses a tax credit if they offer workers up to 12 weeks of partially paid family leave for birth and adoption as well as for family care and medical leave. Ivanka Trump had previously been pushing a six-week paid parental leave program that would be paid for by unemployment insurance, which President Trump backed with $25 billion in his 2018 budget proposal and $19 billion in his 2019 budget proposal.

Workers would get less than half their salaries, and it’s only available to parents. This new proposal calls for 12 weeks of partially paid parental leave (meaning it can’t be used for caring for a sick family member or for your own illness). An average full-time worker (both moms and dads) would have to have worked for their company for a year, and would get about 45% of their salary during their leave.

It would be paid for by borrowing from worker’s retirement. The leave would be financed by an early draw from the worker’s Social Security benefits. Taking the money early would mean that they would need to then defer retirement benefits in order to offset the cost. Critics say that this method of funding will hurt women, particularly those of color and women with disabilities the most because on average, women have lower monthly Social Security retirement benefits ($1,182) compared to men ($1,500). This is due in part to the gender wage gap, a gap that is even wider for non-white women and women with disabilities.

Several states have already passed move comprehensive paid leave laws. The GOP bill stands in contrast to what is already in place at the state level. California offers 55% of an employee’s weekly wage benefit funded through mandatory employee payroll deductions. By 2022, New York will offer 67% of an employee’s weekly wage benefit, also funded through payroll deductions.

The recent bipartisan Massachusetts law will provide workers “partial wage replacement equal to a percentage of their average weekly wages, with a maximum weekly benefit of either $650 or $1,000.” Massachusetts paid leave would last up to either 12 or 16 weeks to care for a seriously ill or injured family member or to bond with a new child (family leave), and up to 26 weeks for an employee’s own serious illness or injury (medical leave). Benefits would be funded through employer premium contributions to the new Family and Employment Security Trust Fund or to private insurance plans.

There is also a Democratic paid leave bill proposal. The GOP isn’t standing alone in the effort to push paid family leave. Senator Kirsten Gillibrand (D-NY) will be speaking about her own proposed bill to cover up to two-thirds of wages for 12 weeks for new mothers and fathers as well as family members caring for a loved one. This plan will be financed through higher payroll taxes, particularly because Gillibrand sees the Social Security financing as being unfair to women and low-income workers who haven’t been able to make as high a contribution as men or salaried workers.

 

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IIndependent Women's Forum is an educational 501(c)(3) dedicated to developing and advancing policies that aren’t just well intended, but actually enhance people’s freedom, choices, and opportunities. IWF is the sister organization of the Independent Women’s Voice.​
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