California’s landmark paid family leave benefit has helped low-wage workers manage time off work to care for a newborn or a seriously ill family member but has not been an unreasonable burden on the state’s employers, according to new research on the six-year-old program.
The research, based largely on surveys of employees and employers, found that the family leave program is popular with people who have used it but is still largely unknown and underused among the people who might need it most.
The program, in effect since 2004, provides up to 55 percent of an employee’s earnings for up to six weeks while they are off work. The maximum benefit is $987 a week, which is taxable like regular income. The program covers nearly all California private sector workers and is financed, like insurance or the state disability benefit, through premiums that spread the financial risk throughout the entire population.
The research, by Professor Ruth Milkman of UCLA and the City University of New York, and Eileen Applebaum of the Center for Economic and Policy Research, surveyed 253 employers and 500 people who qualified for the program, whether they used it or not.
Nearly 9 out of 10 of the employers said the program had “no noticeable effect” or a positive effect on their company’s productivity. The survey results were even more positive when businesses were asked about profitability, turnover and morale. In fact, 99 percent said the program had either no effect or a positive effect on morale.
The program also has not turned out to be the cost burden that many opponents predicted. According to the survey, 87 percent of employers said they experienced no cost increases because of the program, and 9 percent said it saved them money, presumably by allowing them to use their company’s leave benefits to supplement the state program. Thirteen percent said the program cost them money, presumably because they had to hire new workers to fill in for those who were on leave.
The survey of employees found that workers who used family leave were able to take longer leaves, were more satisfied with their leaves and were more likely to return to their employer than those who qualified for the program but did not use it. And in a finding that was not a major part of the debate on the law but is perhaps not surprising, the research showed that women who used the family leave program breast-fed their babies for nearly twice as long as women who did not use the program.
“That’s a big health benefit,” Milkman, one of the researchers, said in a presentation at the California Working Families Summit in Sacramento Wednesday.
She said the worst news about the program is that only 49 percent of employees were aware of the program, and those numbers were lower among immigrants, Latinos and low-wage workers.
“”The people who need this program the most are the least likely to be aware of it,” Milkman said.
And among those who were aware of the program, eligible but did not use it, 31 percent said the benefits were too low, 31 percent said they thought their employer would be unhappy if they took the time off, 29 percent said they feared it would hinder their job advancement, and 24 percent said they feared they would be hired.
The authors suggested expanded outreach, especially through community groups and health providers, to inform more people about the program, and a higher level of wage replacement. They also suggested that job protections that are available to some leave-takers be extended to everyone, and that the program be available to public sector workers, not just those in the private workforce.
“This is a program that Californians should be really proud of,” Milkman said.