If passed, it would be transformative for women’s workplace participation and economic growth.
The need for paid leave has only become more clear during the pandemic.
In the last two years, workers have been forced to juggle caregiving, sick leave, and professional responsibilities, often facing impossible choices among all three. Many women, who’ve borne the brunt of these demands, have reduced their involvement in the workforce or left it altogether.
Democrats hope to tackle these issues with a new measure included in their Build Back Better Act. It passed the House of Representatives last week, and would guarantee US workers four weeks of paid family and sick leave, a major protection that millions of people don’t currently have. At the moment, however, the provision’s chances of passing the Senate are uncertain given pushback from Sen. Joe Manchin (D-WV) — and the narrow margins the party has to advance legislation.
The US’s recent loss of women workers has been striking. At the start of the pandemic, 3.5 million moms of school-age children temporarily or permanently left their jobs, according to the Associated Press. As of this fall, one in three women said they’ve considered leaving the workforce or “downshifting” their jobs, according to a McKinsey study. And per data from the Bureau of Labor Statistics, thousands of women still haven’t returned to the labor force after departing during the pandemic.
There’s a host of reasons for these departures, but as Vox’s Rani Molla has reported, women are far more likely than men to have significant caregiving responsibilities. And these responsibilities have surged during the pandemic, when many women have taken on caregiving for their school-age children and sick family members.
The Build Back Better Act tries to help workers balance caregiving responsibilities, and sick leave, with work. The $1.85 trillion legislation boosts funding for child care, and makes a roughly $205 billion (over 10 years) investment in a new federal paid family and sick leave program.
By itself, the program is far from enough to address the needs that workers face, and it won’t go into effect until 2024, but if enacted it could eventually help keep more women in the workforce.
The US is the only industrialized country without a comprehensive federal paid leave program, meaning workers only have access to such protections if their company or state happens to offer them. According to 2020 data from the Bureau of Labor Statistics, just 20 percent of workers have access to paid family leave, and just 75 percent have access to paid sick leave, numbers that are even lower for low-wage workers. Among lower-wage workers, 8 percent have access to paid family leave, and 49 percent have access to paid sick leave.
The effects of this federal program could be substantial: In addition to boosting women’s participation in the workforce, existing paid leave programs have been found to reduce families’ food insecurity, improve children’s health outcomes, and reduce worker turnover.
For it to become a reality, however, the legislation still needs to make it through the Senate.
How people would be able to access paid leave under BBB
The program, which would officially launch in 2024, would guarantee four weeks (or 20 workdays) of paid family and sick leave for most workers each year.
To qualify for the program, workers will need to have made at least $2,000 over the two years prior to their application for the leave. It’s a threshold that could exclude low-wage workers unable to work consistently because of caregiving responsibilities or other reasons, but New America paid leave expert Vicki Shabo notes that it would include the overwhelming majority of workers.
The program also aims to cover workers left out of the existing Family and Medical Leave Act program, which guarantees the ability to take unpaid leave. Because of the way it’s written, FMLA doesn’t currently apply to a swath of smaller employers and certain part-time workers, exceptions this new proposal would avoid. The House paid leave policy is also accessible to people who are self-employed and members of the gig economy, as long as they meet the earnings eligibility requirements.
“Anybody that satisfies that earnings and work history requirement would be eligible, and that would be critical because the very people that are left out of FMLA are the ones in the most precarious position,” Shabo says.
The money paid to workers would be distributed through a couple different channels. The federal government would set up a new program run by the Social Security Administration, through which people could submit applications if their states and employers don’t already provide paid leave. To apply through the federal program, workers would have to submit their leave requests up to 90 days before they take leave, or up to 90 days after they do so.
Workers whose state or employer already have paid leave programs in place would continue to receive benefits through these channels. The federal government would then reimburse those states and companies.
This policy design is intended to fill in current gaps while making sure companies and states that already offer paid leave programs aren’t disincentivized from doing so. The availability of these programs is pretty inconsistent right now: Nine states and the District of Columbia have implemented some form of paid family and sick leave, and roughly 25 percent of employers offer paid family leave while 68 percent provide paid sick leave, according to 2019 and 2017 Kaiser Family Foundation surveys.
The benefits a worker on leave would receive depends on their prior wages, and could be as much as 90 percent of what they were making. Workers would receive 90 percent of the first $290 they make per week, 73 percent of their next $290 to $659, and 53 percent of any additional wages between $659 and $1,192. Democrats designed the policy this way to ensure low-wage workers received the support they needed — and the highest proportion of wage replacement.
Overall, the maximum amount that a worker is able to receive is capped at $814 a week, or $3,256 for all four weeks.
While past Democratic proposals have paid for this benefit using a payroll tax, the House’s program will be fully covered by revenue raisers like a new corporate minimum tax rate and a new tax on stock buybacks. The program currently isn’t slated to sunset, and could run indefinitely if the revenue raisers proposed continue to cover its costs.
Four weeks of paid leave would put the US at the lower end of the spectrum relative to other countries: Although programs vary, the global average is 29 weeks of paid maternity leave and 16 weeks of paid paternity leave, according to the New York Times.
Previous research of other country’s programs found around six months to be the ideal period of time for family leave, specifically, because it allows parents to bond with their children without facing the professional backlash that a longer duration of leave can result in.
The economic effects of a federal program could also be considerable. According to the Bipartisan Policy Center, women who take paid family leave are 40 percent more likely to return to work after a new child than those who do not, meaning these programs could keep a whole group of people in the workforce, boosting economic growth. The Center for American Progress has estimated that the longer-term effects of women’s departures during the pandemic could be as much as $64.5 billion in lost wages and economic activity each year.
“New mothers, in particular, and caregivers to seriously ill loved ones are more likely to return to work if they have access to paid leave,” Shabo says.
Opposition from the Senate could wind up killing the paid leave plan
Paid leave is facing a steep challenge in the Senate. Joe Manchin, a key moderate, has repeatedly questioned whether this policy should be included in the budget bill.
His concerns have led Democrats to pare down their original plans of a 12-week paid leave program modeled after one Sen. Kirsten Gillibrand (D-NY) has been pushing for years.
Part of Manchin’s problem with the policy is that he feels reconciliation isn’t the process that should be used to pass this measure. As the bill contains so many social and climate spending proposals that Republicans are against, Democrats are trying to pass it through reconciliation, which requires only majority support in both houses of Congress. Because Democrats have 50 votes in the Senate, with Manchin aboard, they could pass paid leave, and everything else in the Build Back Better Act, without a single GOP vote.
“I don’t think it belongs in the bill,” Manchin said in a CNN interview in early November. “We can do that in a bipartisan way. We can make sure it’s lasting.”
Up to this point, attempts to find a bipartisan approach for paid leave have failed.
Historically, there have been disagreements over how to pay for the legislation, with Democrats advocating for a payroll tax to cover its costs, while Republicans have pushed for people to borrow from their future Social Security benefits. Additionally, there have been conflicts over whether the program should require employer participation or whether it should be voluntary. During the Trump administration, Ivanka Trump’s attempts at a paid leave program wound up largely floundering as well, though they did contribute to Congress approving paid leave for federal employees.
Because of Manchin’s concerns, paid leave may well be removed from the Build Back Better Act or cut significantly. And that would be a great loss for millions of workers.
Gillibrand has said that she’s hopeful a paid leave provision will wind up in the legislation — even if it’s a narrower one than the House included.
“I think Sen. Manchin and I can come together hopefully in the next couple of weeks on something that could be included in this package that would be a Democratic-only proposal that we could start with, something modest, perhaps,” Gillibrand said in a CBS interview last weekend.
One way lawmakers could curb the program further is to limit how long it would last, perhaps setting a specific deadline for the program to sunset, for example. They could also slash the number of weeks the benefit would cover, or apply means testing to exclude workers making over a certain amount.
Were the proposal to be removed, it would leave millions of workers exactly where they are now: forced to choose between caregiving and their own health and income, even as the US continues to navigate a devastating pandemic.