By Trisha Douin and Dr. Dakota Thomas
The United States currently has no federally mandated paid family leave policy. To fill this gap, 13 states and the District of Columbia have enacted their own paid family leave laws (see Map 1), while three others — Georgia, New Hampshire and South Carolina — offer paid parental leave exclusively to state employees.
Most of these state programs provide parental leave out of consideration for a new child, foster care or adoption while also providing leave options for family caregiving. Also included in most programs is temporary disability insurance to cover paid personal medical leave.
State policies vary in multiple dimensions, including costs, funding models, permitted duration of leave, eligibility requirements and impacts on parental child welfare. Depending on the specific funding model a state pursues, these policies can have little to no impact on the state budget. Research suggests that paid leave has positive impacts on child health and wellbeing, parental finances and parents’ mental health. Unpaid leave does not confer any of these benefits.
Costs and Funding Models
Although funding structures for paid leave policies vary, most states use a social insurance policy design that funds benefits through pooled payroll taxes on employees and/or employers. Others offer paid family leave through private insurance on a mandatory or voluntary basis.
In these systems, companies and/or workers pay premiums to private insurers that provide benefits for paid parental, family caregiving and/or personal medical leave (see Map 2). For example, Virginia enacted a law establishing paid family leave as a form of private insurance that employers can voluntarily purchase for their employees. While the law does not mandate coverage, it is expected to expand access to the benefit through public demand in a competitive labor market and by providing flexibility. NewHampshire and New York use private insurance models, but participation is mandatory.
States can opt to fully fund programs through mandated contributions. California, for example, fully funds their program through employee contributions, with no additional direct cost to employers. This means that the policy has functionally no impact on the state’s expenditures, though employees’ wages are impacted by paying into the program.
Paid Parental Leave Duration, Eligibility & Protections
Duration, eligibility and job protections are among the areas where state paid parental leave policies differ. As it relates to duration, time ranges from a minimum of six weeks to a maximum of 12 weeks (see Map 3).
States may have a specific set of requirements that employees must meet in order to be eligible for paid family leave. These criteria may include the total number of hours or months worked, total wages earned, and size and type of the company. California, for example, requires employees to work at least 12 months for an employer, contributing 1,250 hours of service, prior to taking their paid leave. The District of Columbia requires employees to spend at least 50% of their time working in the district.
Additionally, several states have also created policies to address job protections for employees who do take a leave of absence. Seven states — Colorado, Delaware, Maryland, Massachusetts, New York, Oregon and Rhode Island — have enacted policies that provide job protections for employees on leave.
Pay Amount During Leave
The amount of pay that eligible employees receive while taking leave under the policies varies by state. In California, for instance, eligible employees can receive up to 60% to 70% of their weekly wages for a period up to six weeks, while New Jersey offers eligible employees up to 85% of their weekly wages for the same duration, while in New York, eligible employees can receive up to 50% of their weekly wages for up to 10 weeks.
Impacts of Paid Parental Leave
Research indicates that paid parental leave policies have positive effects on mothers, fathers and infants, resulting in increased leave-taking by both mothers and fathers. Several studies examining the effects of California’s paid family leave found that leave-taking doubled among mothers who extended leave by an average of three weeks, in addition to having a greater impact among economically disadvantaged mothers.
Studies have also revealed benefits of paid parental leave on the health and development of children, as well as the mental health for mothers. For instance, it has been reported that paid leave reduces infant mortality and hospitalizations, which is not as common with unpaid leave. Paid leave also reduces stress and is beneficial for parents’ mental health. Mothers participating in paid leave have been shown to less commonly experience post-partum depression, and leaves longer than two to three months are expected to be especially protective. In addition to offering mothers improved mental health, longer leaves can lower stress and reduced hospitalization rates. Evidence on mental health benefits for fathers was more mixed and less conclusive.
Summary
The Federal Family and Medical Leave Act provides eligible employees up to 12 weeks of unpaid, job protected leave per year for the arrival of a new child, their own serious health condition or to care for a seriously ill family member. Despite this, no paid family leave policies exist at the federal level. The lack of federal law for paid leave allows states to develop their own policies to address this gap. They have accomplished this through funding structures, eligibility requirements, duration of time and pay during time off. Although states approaches may differ in providing paid family leave, research suggests that providing such opportunities presents benefits that unpaid leave does not. Benefits include positive impacts on child health and wellbeing, parental finances and parents’ mental health.