Paid leave a positive for economy, survey finds

Jessica Perry//January 19, 2012

Paid leave a positive for economy, survey finds

Jessica Perry//January 19, 2012

Paid family leave offers a healthy economic return, according to a study released today by researchers from Rutgers University’s Center for Women and Work and the National Partnership for Women & Families.

The study, using data collected by the Bureau of Labor Statistics between 1997 and 2009, showed women who used paid leave report stronger attachments to the labor force and higher wages within a year of returning to work after giving birth.

Also, women who return to work after a paid leave have a 39 percent lower likelihood of receiving public assistance and a 40 percent lower likelihood of receiving food stamps in the year following the child’s birth, compared to those who return to work and take no leave at all, the study reported.

“We can now link paid family leave to greater labor force attachment and increased wages for women — as well as to reduced spending by businesses in the form of employee replacement costs, and by governments in the form of public assistance,” said Linda Houser, an affiliate fellow at the Center for Women and Work and co-author of the report.

John Sarno, president of the Employers Association of New Jersey, who was involved in the discussion of the Family Leave Insurance Act before it was implemented, said there are two bonds to consider.

“One is obviously the bond between the parent and the child, and the bond between the family members. But there’s another bond, and that’s the bond between the employer and the employee,” Sarno said. “Those bonds have to be nurtured … but it’s not a one-way street.”

While surveying his constituents, Sarno said, most employers worked case-by-case on determining family leave for employees, and policies are usually included in employee handbooks or other business publications.

According to a report by the state’s Department of Labor and Workforce Development, 30,162 eligible claims were processed in 2010. The average time of leave covered was 5.1 weeks, with the average claim amount totaling $2,421. Funding for the program is taken as a payroll deduction from employees, not employers.

New Jersey’s paid family leave law grants six weeks of wage replacement, and is one of five states to have a program for recovering wages lost during family leave. It does not guarantee an employer must grant six weeks of leave, or that the employee is guaranteed to return to their previous job.

The CWW report calls for federal-level paid leave policy, as current federal laws only call for employers with more than 50 employees to provide up to 12 weeks of unpaid leave. But Sarno said the New Jersey model for paid leave isn’t best for national implementation. “The better model would be to do a comprehensive reworking of the unemployment system, and then we can begin to talk about employees to take time away for training, to attend classes, sort of a paid time off bank for multiple purposes,” he said.