Here’s Why a Federal Paid Leave Program Would Be a Bad Deal for Many Workers

Continued absurd coverage continues of the paid-leave debate. According to what we are told, opposition to a federal paid-leave program amounts of anti-family or pro–suffering. It is rare that we are informed about all the consequences of such a policy.

How many types of employment leaves do workers most use? Is there anyone who doesn’t take paid time off? Do employers have any legitimate reason to deny paid leave? Would a government program only target workers without employer-provided paid time off? These are just a few of the many questions not asked by anyone who wants to see our government create a radical new program.

Let me see. Let me try. Rachel Greszler, Heritage Foundation, noted that almost all workers have the need to take paid leave. Nearly three quarters of those who do take leave get full pay or partial, as indicated by congressional testimony.

Given the extent of media coverage on the topic, you wouldn’t be blamed for not being aware.

Most of the focus has been on parental leave in recent years. But you may not be aware that parental leave is just one type of the four available options for employees. It is easiest to plan ahead for parental leave, but Greszler says that “more than half” of all leaves are taken by workers in response to their own medical conditions. Workers also take 25% to provide care for loved ones. These leaves may be unpredicted and can require various lengths.

However, paid leave is not available to all employees. It’s not surprising. No matter how paid, benefits like paid leave are not free. Employers that offer this benefit to employees will pay less than what they would otherwise. While some people may want paid leave as part of their benefits package, many do not. A federal program would not be completely free, since it would have to be funded with payroll taxes.

Research shows that employees who find out the cost of mandated paid time off in their take-home pay are less supportive of paid parental leave.

Additionally, even though it is costly, federal programs won’t really help workers that don’t have paid leave. Most of them work for themselves, in small businesses, or have part-time, temporary, and/or full-time jobs. State-level data shows that only a very small percentage of low-income workers use the state’s paid leave program. The costs of administering and payroll taxes are prohibitive for benefits. This is especially true if the benefit program pays less than 100 per cent and takes several weeks to deliver a payment.

For self-employed workers, the situation is more complicated. About 25.7 million sole proprietorships have no employees and 9.4 million are independent workers. Most of these are sole proprietorships. Many of these workers don’t have disability insurance and are unable to receive paid leave. This insurance covers an upfront expense for benefits they might never use.

If the state’s paid leave plans show, federal programs won’t be much different. For example, in New York, contractors who are not employees must enroll into the state program within 26 weeks after starting their company. They will have to contribute for 2 years before they can access benefits. While other states may have less requirements, the benefits are generally not worth it.

Bottom line: Most workers have access to paid leave. Their benefits often offer more flexibility and are better than those offered by the government. Unfortunately, most low-skilled workers wouldn’t benefit from a federal paid holiday program. For a small benefit, independent contractors’ costs could rise substantially.