By BLR Founder and CEO Bob Brady
Bob Brady thinks someone should pay workers out on FMLA leave. The question is … should it be you?
Back when the Family and Medical Leave Act (FMLA) was first passed, many opposed it on the grounds that “unpaid leave” would quickly lead to “paid time off.”
In fact, some proponents of the original FMLA never hid the fact that that was their ultimate goal. In most industrialized nations, paid time off after childbirth, for example, was a right won decades ago. But they realized that paid time off was not a political possibility. So they waited.
Now, as the Democrats have regained a majority in Congress, the prospect of paid time off is being raised once again. My own Senator, Chris Dodd (D-CT), introduced a bill calling for just that. California already has a law that gives some forms of paid family leave. The benefit is funded through a payroll tax.
While it is unlikely that the federal law being proposed will pass in the near future, there is no doubt that it will be raised again.
It is a popular rallying cry for the politicians because young families face enormous financial and social pressures. Both partners must work in order to meet middle class expectations. Like it or not, this is clearly an idea with a great deal of political force behind it.
My prediction is that at some point in the future, paid leave will be mandated. The big question is, who will pay for it: Employers, employees, or the taxpayers?
The Problem with Employers Paying
Many think employers should pay for it. After all, they’re the ones who benefit from their workers’ labor, and this is a way of giving back. Also, taxes would not need to be raised and yet another government bureaucracy would be forestalled. All true, but here is a problem with having employers bear the cost.
If I am a U.S. employer, paid family leave will raise my costs. As a result, prices will rise. My widgets will now cost more when the consumer buys them at Wal-Mart or Target. But that’s OK because this is a good cause and the consumer should help bear the burden. True?
True to a point. The problem is that foreign manufacturers, in nations with low cost structures, will not have raised the price, and the consumer at Wal-Mart or Target will make the rational choice to buy the lower-priced product. Soon, that many more jobs are outsourced. What about service jobs that can’t be outsourced? Well, those services would simply cost more.
Is this an argument against paid leave? No, it is not. It is an argument in favor of spreading the cost of providing an important societal benefit to all demographic segments, not just employers. Paid family leave would help a great many people. But we kid ourselves if we think we can make employers pay for it without impacting their ability to compete in the global economy.
The California law takes a middle ground by having employees themselves bear the cost through a payroll tax. This approach spreads the cost without completely hiding it. It adds some bureaucracy, but limits the administrative burden on employers.
I will be curious to see how the federal approach develops. (And if it doesn’t, we can probably expect more states to follow California’s approach.)
That’s my e-pinion. Let me know yours. Use the Share Your Comments button or e-mail me at Rbrady@blr.com.
Would you like to be a guest columnist and have your e-pinion appear here? Click for details.
Everyone has some benefit from FMLA as it stands right now. The employer is allowed to let an employee leave for a period of time in order to deal with medical issues while still retaining them as an employee, and the employee has the benefit of knowing that they will have a job when they are ready to return. But, if we kid ourselves into thinking that we can turn a business into a form of “charity” without there being a dramatic negative influence, we are sadly mistaking. An employee may have done a wonderful job for the employer, but, that does not mean that the company should be forced into paying for wages that the employee did not earn.
I am all for the company looking out for the employee, and in turn the employee looking out for the benefit of the company as a whole. If we are going to focus on just the employee, then our economy as a whole will fall. There is no reason that the employer should have to pay for the stress of others. It is not their fault that the employee or their family is in a bad medical way, therefore it is not their obligation to make sure that there is cash flow coming in. I have seen many things occur in the workplace, from babies being born to a worker passing away, and everytime, there has been a generous gift donated to the family. That is great! That is as human nature should be, but we would all doing eachother a disservice by forcing a company to buckle by just frivolously throwing away money that is neither earned nor deserved. I would not expect to pay for a car that I never drove, why then should we expect the employer to pay wages for hours that they never had the benefit of seeing?
I agree with Christina Hass, employers should not have to bear the burden of funding un-worked labor hours. If the issue is to supplement an employees pay while on FMLA, then that should be addresses as a purchased benefit by the employee. Similar to some form of medical or dental coverage. The Employee would make advance payment into the program for a percentage of wages to be made available during time of FMLA. Also, this program should be managed by an external agency not the company. For many the idea of having your wages covered while on FMLA sound great, who wouldn’t like to get paid and not work for it. Sound a lot like our credit system. “Oh don’t worry, you can have it now and pay me later.” So how much debt are American’s in now? The concept seems like a good idea; however, in the long run it will become another personal work inhibitor. Currently what makes FMLA a good program is knowing that your job is secure for the most part while you deal with important family issues.
MSgt A. Bell
Bob
Employer and Government subsidized FMLA is a crime. The proper role of government is not to play Robin Hood. My suggestion is try AFLAC that is the purpose of insurance. The problem is nobody wants to take responsibility for themselves or their family. We have a whole political agenda that is working on convincing Americans that it is their right and they are “entitled” to these benefits. Bull! I am Married with 6 children and a stay at home wife. guess what, we are doing just fine without the handouts, I have AFLAC it is not expensive. The employees are “response able” for their personal finances, Not the Company and sure as heck not my tax dollars. Nobody is willing to say hey Mr. and Mrs employee put on your big boy pants and take care of your family. That would not be politically correct, we might be considered a racist or we might offend. It is you and only you Mr employee that are able to choose between the new car payment and AFLAC. I did! I do not buy into the keep up with the Jones, Not my responsibility to pay for the poor decisions of those that did. Government mandates that I do and it is considered Legalized Plunder.
M Cassel