During the election, paid employee leave was a big hot-button issue. Both Donald Trump and Hillary Clinton supported paid employee leave. That opposing presidential candidates would seem to agree on such an issue was, on the surface, somewhat surprising. Of course, as they say, the devil is in the details, and the two candidates differed on exactly how much pay, for how long, and to whom. Let’s get back to that in a moment. This week the U.S. division of IKEA, the Swedish furniture retailer, announced that it is expanding its paid leave benefits to new parents. Clearly this issue will not be any less so just because the presidential election is over. OK, so what does this all mean to the average employer–or the average American? Join The EmpLAWyerologist after the jump for some discussion…
Now, let me first say I am not advocating any political position on paid family leave.
Congress has introduced and tried to pass legislation requiring paid family leave for years now. In some form another the hope with most proposed legislation is to keep the FMLA provisions, plus provide pay for leave time. We know that there is no federal paid leave law, which means that Congress has not yet managed to pass such a law. We know that time off under the Family Medical Leave Act is unpaid. We know that Hillary Clinton supported, and still supports such legislation. Some states have passed laws that provide additional unpaid time off. Some states and localities have provided some medical leave or safe leave, which allows for some paid time off, generally not anywhere near the 12 weeks under the FMLA (though since we do not have the time and space to examine each such law here, we will not do so).
As I said before, the issue is not going away. Even Donald Trump believes there should be some paid time off. His proposal, admittedly, is less expansive than those introduced in Congress. He has proposed 6 weeks’ paid leave for new mothers, whereas at least some of the laws introduced in Congress would allow employees to receive part of their salary or wages for up to twelve weeks under the same circumstances as those allowed under the FMLA. In other words, employees could get more paid time off than under Mr. Trump’s proposal, and the benefits would cover parental leave, leave for one’s own serious medical condition or leave taken to care for the serious medical condition of a family member within the meaning of the FMLA, instead of only covering women who have just given birth.
Against this backdrop comes the news that IKEA has decided to expand the paid parental leave it already offers. Currently, IKEA employees receive up to 5 days’ paid parental leave, and up to 8 weeks’ paid disability leave to new mothers. Effective January 1, 2016, under IKEA’s new policy, new parents who have worked at IKEA for at least one year can receive up to four months’ paid leave. This new policy applies to both mothers and fathers, whether they are birth, adoptive or foster parents. For the first six weeks they will receive their full base pay, and half their base pay for the next six weeks. Workers with 3 or more years of service will be eligible for 8 weeks of full pay and 8 weeks of half pay. By U.S. standards this is a very generous policy. Compared to IKEA’s home country however, this is quite stingy. In Sweden, workers can receive up to 68 weeks off and the government subsidizes it. Other countries also provide more generous, paid time off. Is that why IKEA made this move? Not really.
IKEA says it expects that this expansion of paid leave will improve productivity and reduce turnover. IKEA is not alone. Other US companies, such as Netflix, Adobe and Etsy have also rolled out comparatively generous paid leave, though their programs tend to apply only to either top-tiered or salaried employees, whereas IKEA’s benefits apply to both hourly and salaried workers.
OK, enough about all these other companies. What does this mean for you? Should you be thinking of providing paid leave? To the extent that more companies are doing so, to the extent that you want to be or remain competitive with those companies (or at least be less vulnerable to losing good talent to those other companies) maybe. What if you simply are too small to pay your employees all or even part of their salary while they are not working for you? what if you can’t pay a salary while you are also paying for a temporary employee, paying someone else overtime or suffering from lower productivity during that employee’s leave? That’s where–dare I say it–a federal law could, help you– at least in theory. Did I really just say that? Yes. The different bills introduced in Congress (at least some of them) seem to be proposing to pay for it by way of a tax or a trust fund paid partly by the employee through withholding and partly by the employer. Yes, your costs/taxes would still increase. Yes, depending on the mechanisms the law uses, the average taxpayer may also be paying more. But, on the upside, you, the employer would not be footing the entire bill, and maybe, just maybe such a law would make smaller employers less vulnerable to employee turnover in favor of those companies that do offer paid leave.
OK, I’m done with this topic for now –until it comes up again. Now, please remember, I’m not telling any of you what to do. I’m just making some observations here, and giving you something to think about–because it’s good to think, at least occasionally. See you next week…
Contents of this post are for educational/informational purposes only, are not legal advice, and do not create an attorney-client relationship. Consult with competent employment counsel in the state(s) in which you employ people with your specific questions.
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