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December 16 2019

We Need Fair Benefit Policies That Create Flexibility, Not New Burdens

via Forbes
by Carrie L. Lukas

It surprises many people to learn that federal workers don’t already have guaranteed paid family leave benefits. That’s something that President Donald Trump and Congress may soon change, and seems a natural next step for an Administration that has focused on encouraging a debate about how to best make sure that workers, particularly working women, have the time off they need, especially following the birth of a child.

However, when it comes to the federal workforce, paid leave policies should be considered in the context of their entire compensation package. After all, the costs of these new benefits will have to be paid by taxpayers, most of whom have far less generous compensation packages than do federal workers.

Certainly, the federal government has been behind the times in not providing employees with paid leave specifically for family reasons, like the birth of a new baby or the illness of a child. However, federal workers have long considerable paid leave benefits, with more than two weeks of paid vacation, two weeks of paid sick leave per year, and 10 paid holidays. Vacation and sick leave can typically be repurposed for paid family leave. AEI’s Andrew Biggs has compared the compensation of federal and private-sector workers and found that federal workers with similar qualifications receive about 14 percent higher compensation than their private sector counterparts.

In addition to the paid leave benefits described above, federal workers also have access to retirement packages, including subsidized 401k style savings, the potential for a defined federal retirement benefit and even paid health care benefits during retirement, that far outstrip that of comparable private sector workers.

This doesn’t mean that it’s a mistake to augment paid leave for federal workers, but it ought to be done in the context of a rethinking of the way federal workers are compensated more broadly, to make sure that their compensation is in line with those who of the taxpayers who have to foot that bill.

To make progress specifically on the paid leave front, there are several other measures that the Administration and Congress ought to be able to agree upon. Policymakers should expand health savings accounts (HSAs), both to allow workers increase their contributions to HSAs so that they can accrue more assets in those accounts and to give them the option to use HSA funds to replace income lost during unpaid leave from work. This idea was proposed by Rep. Andy Biggs (R-Ariz.) in the Freedom for Families Act.

Policymakers should also update the outdated Fair Labor Standards Act to give private sector workers an option that government workers already enjoy: The chance to be compensated for overtime with time-and-a-half of paid leave instead of extra pay. This would particularly benefit working parents, those caring for elderly parents and those with personal illnesses. Those who anticipate an absence from work and lack sufficient paid leave benefits would then have the ability to seek overtime opportunities so that they can accrue paid leave benefits for future use. This reform would also be particularly important for lower-income workers, who are more likely to be subject to the overtime regulations and are less likely to have access to employer-offered paid leave benefits.

These are important ways to help workers help themselves. The Administration should also work to advance other proposals to expand access to paid leave, such as legislation to create Earned Leave. This budget-neutral approach would allow workers to opt to receive a small share of the retirement benefits they have earned through Social Security when welcoming a new child. Those who exercise this option would have a small delay in their eligibility for retirement benefits to pay back those costs. A bipartisan bill introduced by Senators Bill Cassidy and Kyrsten Sinema similarly would allow workers to front-load their child tax credits to compensate for income lost while taking leave, in exchange for reduced tax credits in future years. These measures have the virtue of not further burdening taxpayers; they simply give workers more options for how to use benefits that they have already earned.

It’s nice for federal workers to get a big benefit increase, but we need to do more to help all workers who need time off from work without chipping away at their paychecks.





Independent 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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