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Family and Medical Leave Insurance, Not Tax Credits, Will Help Families

It’s quite remarkable to see Republican presidential candidates Marco Rubio and Carly Fiorina advocating that employers provide and pay for family and medical leave for their workers. This is like asking homeowners to set up their own personal fund to replace their house if it burns down in a fire. It’s an expensive proposition that only the richest among us could afford – even if the government promised to subsidize 25 percent of the cost of rebuilding. Homeowners’ insurance, spread over millions of home owners, is the low-cost alternative that enables all of us to protect our homes in the event of a disaster.

For most private-sector employers, the cost of providing paid family and medical leave to their own employees is prohibitive. A handful of companies with deep pockets – including, most recently, Vodafone, Netflix and Virgin – have stepped up to provide paid maternity or parental leave. But these companies have capped their costs by limiting access to these programs. Unlimited parental leave at Netflix, for example, is not available to the company’s hourly DVD workers. Vodafone’s leave policy is limited to maternity leave and does not provide for the 65 percent of the company’s global labor force that is male. Virgin’s generous parental leave policy applies to just 140 employees that work for Virgin Management, the unit that handles the company’s financial investments and licensing agreements. Sen. Rubio’s (Fla.) paid family leave proposal would require the federal government to subsidize 25 percent of the cost of such leaves through a tax credit – a windfall to companies that already provide such leaves. Taxpayers will be footing the bill for paid leaves that very few of them will get to take.

Like homeowners’ insurance, a family and medical leave insurance program can drastically reduce the cost of providing income to all workers while they recover after childbirth, get over a serious illness, bond with a new child or care for a seriously ill family member. State paid family and medical leave programs in California, New Jersey and Rhode Island already do this by spreading the cost of their programs over millions of workers. The FAMILY Act, sponsored by Rep. Rosa DeLauro (D-Conn.) in the House and Sen. Kirsten Gillibrand (D-N.Y.) in the Senate, would spread the cost of providing some income to workers when they need a family or medical leave over the more than 251 million workers in the United States. And it would guarantee that all workers have access to paid family and medical leave to care for themselves and their families.

In contrast to a family and medical leave insurance program, a tax credit for employers will increase, rather than decrease, unequal access to paid leaves. Employers that can afford to offer paid leaves to workers and want to do the right thing will benefit; but a tax credit will do nothing for workers whose employers either can’t afford or choose not to make such leaves available. Paid leaves provided as a result of tax credits won’t reach lower-paid and part-time workers – disproportionately women and people of color – who need such leaves the most.

Only a small fraction of the nation’s workforce needs a family or medical leave in any given year, but all working families are likely to experience the need for such a leave at some point. A national paid family and medical leave insurance program would cover all workers and would be affordable.

This column originally appeared in The Hill.

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