February 20 2013
The Independent Women’s Forum, the small nonprofit at which I’m the executive director, recently hired a woman five months pregnant. Despite her needing time off this spring after her baby arrives, we recognized she was the best candidate for the job and decided to hire her. As a small organization we are not in a position to provide three full months of leave; however we negotiated a reasonable amount of maternity leave, followed by a lighter schedule, working from home, for several additional weeks.
This month women’s groups are hailing the 20th anniversary of President Clinton signing the Family and Medical Leave Act (FMLA) into law, which mandates businesses with more than 50 employees provide 12 weeks of unpaid leave for workers who fall ill, leave to have a baby, or need to take care of an aging parent. While the goal of protecting workers and their families who need to leave the workplace temporarily is a noble one, the law is hardly without its problems.
Contrary to what advocates might think, the FMLA creates inflexibility and actually limits worker’s options. A recent article in the Washington Post, laments that the FMLA currently “does not apply to companies with 50 or fewer employees, part-time workers, those who have worked for a company for less than a year or those who have taken unpaid medical leave within the previous two years.” Nor does it “cover workers who care for grandparents or extended family members.” The “fate of those workers” the Post reports, “is left entirely up to individual managers and companies.”
But this is exactly the point. The FMLA is a one-size-fits all law, and simply can’t and won’t ever be able to cover all workers. Consider the self-employed shop owner, the freelance journalist, or the stay-at-home mom who works part time at her child’s school – should taxpayers be required to provide them with designated leave?
Advocates of the FMLA perpetuate the idea that if government does not help create fair workplace standards, businesses don’t have an incentive to do so on their own. Something progressives ignore, however, is that employers invest time and resources hiring and training workers, and ultimately their bottom line depends on employee productivity.
It’s true, there are always going to be some bad employers who are short sighted, but most businesses are going to view their employees as an investment and will want to accommodate them to some degree. Failing to help workers balance their personal and professional responsibilities is a failed human resource policy that most employers recognize does not make good long-term business sense.
And what might be surprising to those who are sympathetic to the law is the fact that when government begins mandating benefits, it actually discourages private businesses from doing so on their own. One study conducted for the Department of Labor found that “current regulations prohibit employers from applying the normal leave policies … and thus may encourage employers to scale back on their provision of paid lead.”
While most businesses are going to want to provide reasonable leave policy for their workers, it does no good to ignore the very real economic ramifications that result from an employee taking time off. No matter if a woman leaves to have a baby or a man leaves to care for an aging parent, the workload doesn’t disappear and a company has to shift resources to accommodate the absence. Bottom line: leave doesn’t come without a cost to the business and to other employees.
To put that cost in perspective, in 2008 President Bush signed the National Defense Authorization Act, which expanded FMLA to include leave for certain qualified members of the military. In advance of this expansion, the DOL report acknowledged that a pretty hefty price tag accompanies these revisions to the FMLA regulations, including the “cost of reviewing and implementing new provisions:”
Given that the average hourly wage and benefits rate of an HR compensation and benefits specialist is $36.51, the total one-time cost per covered firm is $219.06 (6 hours x $36.51). The total cost to all employers is $62,484,017 ($219.06 x 285,237 firms that have FMLA covered establishment).
The dollar amount may seem negligible at the individual level, but on a macro-scale the total amount invested in simply adapting to new regulations – not abiding by the law at large – is significant, especially when one considers how businesses might otherwise choose to invest these millions of dollars.
While large businesses are certainly more likely to be able to absorb these costs, the conversation surrounding the FMLA is never just about the status quo. Supporters of the FMLA are constantly seeking ways to expand the law to ensure that all workers are covered.
Mandated benefits don’t come without a cost to our economy and to our freedom.
Women are an extremely valuable part of the workforce, and businesses have an interest in treating their employees – their investments – fairly. Government will never be able to legislate away all bad bosses, but trying to do so will ultimately make the workplace less flexible and hurt those the policy is designed to help.