A bill that would provide paid family leave insurance has been gaining momentum in Albany. It’s about time.
The United States is the only developed nation that doesn’t provide any paid time off for workers with a new baby or a seriously ill family member. While the federal Family and Medical Act (FMLA), signed into law 21 years ago, has been successful, it guarantees only unpaid leave and applies only to businesses with over 50 employees. President Obama announced a new executive order on paid sick days in September, but that only applies to federal contractors. Companies like Netflix, Adobe, and Microsoft have made headlines for their paid leave policies, but that’s only a step in the right direction.
My company Strugatz Ventures helps mission-driven entrepreneurs and investors seeking to scale their businesses and achieve maximum impact and revenue potential. With a history of impact investing and social entrepreneurship, we know that attracting and retaining the best employees is easier when they know that their family’s basic needs will be supported by their employer.
That’s why the New York State Assembly passed a paid family leave bill which would provide up to 12 weeks of paid leave at the time of the birth or adoption of a child, or to care for a seriously ill family member. It has the support of businesses big and small, such as Eileen Fisher, UncommonGoods, and many others that are members of the American Sustainable Business Council. And it will be nothing but good news for the economy. Despite its failure in this legislative session, it must be brought up again in the next session.
The family leave benefit would be funded through small employee payroll deductions of 45 cents a week, which can be easily administered through the existing Temporary Disability Insurance (TDI) program that is used for off-the-job disabilities or pregnancy. The insurance benefits would replace two-thirds of a worker’s own average weekly wage up to a cap.
The current cap on TDI benefits has been frozen for 26 years at a woefully inadequate $170 a week, not enough for any family to live on. This legislation would gradually raise the cap over four years to 50 percent of the statewide average weekly wage — about $600 a week. The estimated small added cost for raising existing disability benefits would continue to be shared between employers and employees.
As business leaders and small business owners, we support this legislation. By letting an employee take care of a new child or ill family member without risking their wages or job, it lets employees remain focused and productive instead of constantly worrying about their families. Most times, work can be temporarily reassigned to others when an employee goes on leave. But if needed, hours can be expanded, or temporary employees hired to fill in, because the employer does not have to pay the wages of the person on leave.
By enacting paid family leave, New York would be riding a wave of national momentum for better work-family policies. Over the past decade, paid family leave policies have been implemented in California, New Jersey, and Rhode Island. Like New York’s proposal, those paid leave benefits were merely added to the states’ existing TDI programs, meaning businesses use a mechanism they already know and comply with.
The result has been spectacular, for workers and businesses alike. In California, 87 percent of employers said their state’s paid family leave program had not resulted in any cost increases. In New Jersey, interviews with employers showed that the feared negative impacts on business haven’t materialized. Instead, employees return to their jobs less stressed, more loyal and more productive. Moreover, providing paid family leave through a statewide insurance program gives smaller businesses a level playing field, by helping them to afford the kinds of employee benefits that large corporations already can.
Our state’s families and businesses would benefit from a paid family leave policy that would bring New York’s workplaces into the 21st century. The governor and the Senate must work to pass this win-win legislation in the next legislative session.
Peter Strugatz is president of Strugatz Ventures, based in East Hampton, N.Y.