Defining family caregiver leave

Many employers already offer various types of caregiver leave. Common examples include:

• Family medical leave to care for a parent, child, spouse or domestic partner with a serious injury or illness
• Parental leave to care for a newborn, adopted child or foster child

While the federal Family Medical Leave Act protects the job of an individual who needs time off to care for a loved one, it doesn’t provide payment during the leave of absence. However, some states do have a paid caregiver leave policy in place.

Paid caregiver leave

Family caregivers sometimes receive paid leave either through an employer or a state program. Often, these policies cover only a percentage of the person’s regular salary. Congress offered limited paid caregiving leave benefits to some families coping with COVID-19, but no national program permanently pays workers to care for ill loved ones.

Unpaid caregiver leave

In the United States, most family caregivers don’t receive payment. While the FMLA Act of 1993 offers unpaid leave to some workers, many employees don’t qualify for this restricted program. FMLA excludes employees who:

• Have worked less than 1,250 hours over the past year
• Have been at their current job for fewer than 12 months
• Work at companies that employ less than 50 workers who live within 75 miles of the main job site

These exclusions have the most notable impact on low-income households. In addition, the law’s exclusive definition of family prevents caregivers from receiving leave to care for domestic partners, siblings, grandchildren or grandparents.

Understanding the need for a federal caregiver leave policy

These consequences of lost wages for caregivers underscore the importance of paying family members for this critical work.

The economic impact on individuals and families

Most U.S. workers simply can’t afford to go unpaid while caring for family members. In many cases, employees use their vacation and sick time to receive payment for at least part of the time spent away from work with an ill loved one. These statistics illustrate the very real impact the lack of family caregiver leave has on American families:

• According to data from the Pew Research Center, nearly half of American caregivers enrolled in welfare programs to make up for lost wages during unpaid leave.
• Pew also found that 57% of workers earning less than $30,000 went into debt after caregiver leave, even when leaves were partially paid.
• The Center for Poverty and Inequality at Georgetown Law reports that many family caregivers lose lifetime income by retiring early, switching from full-time to part-time work, working fewer hours or taking a less demanding role in the workplace.

These economic consequences faced by families often have negative mental and physical health impacts on both the caregiver and the family member receiving care.

The negative consequences for employers

Employers also have to contend with challenges that arise from the lack of paid caregiver leave. Companies that don’t offer this benefit often struggle to attract and retain a high-quality workforce. Increased turnover rates also result from the need for employees to quit or cut back on hours because they have an ill family member who needs care. Often, productivity suffers as individuals strive to balance conflicting home and work responsibilities.

Potential boost to the U.S. economy

In addition to the economic effects of unpaid leave at the family level, studies indicate that paid family and medical leave programs could improve the nation’s macroeconomic picture. Research published by the Journal of Economic Perspectives suggests that more women could join the workforce if the United States implemented widespread paid caregiver leave.

What’s more, data reported by AARP indicates that paying caregivers for the value of their time could drive at least $470 billion in economic growth, much of it translating to boosted consumer spending. This increase in available household income likely represents a boon for small and medium-sized businesses.

Reviewing state and local paid caregiver leave policy

According to the National Council of State Legislatures, paid family leave policies currently exist in:

• The District of Columbia
• California
• Washington
• Colorado
• Rhode Island
• Connecticut
• Oregon
• Delaware
• New York
• Massachusetts
• New Jersey
• Maryland

In addition to these state programs, the Center for Budget and Policy Priorities reports that about 20% of U.S. workers can access paid caregiver leave through their employers.

How well do paid leave policies work?

Research so far largely supports the economic and social benefits of paid caregiver leave. At the Rutgers Center for Women and Work, researchers found that fewer new mothers received food stamps and other forms of public assistance after California’s paid leave mandate took effect. According to Department of Labor research, caregivers often experienced improved mental health when they begin to receive leave payments.

Paid leave advantages for employers

A survey by the Center for Economic Policy and Research found that among California employers, the vast majority reported a positive or neutral impact of the paid leave mandate on:

• Morale (98.6%)
• Turnover (92.8%)
• Profit (91%)
• Productivity (88.5%)

CBPP reports that 87% of California business owners said the paid leave mandate had no impact on their bottom line, and an additional 9% said they saved money with the new policy. Only 7% said they lost money after implementing a paid leave program. Surveys of New Jersey business owners revealed similar results. University research found that two-thirds of California employers support state lawmakers in requiring paid caregiver leave.

Paid leave policies also assist with workforce retention, particularly for female employees. The Society of Human Resource Management reports that women who live in states with mandated paid leave are 20% less likely to leave their jobs after giving birth. Paid leave also increases the likelihood that people who have chronic diseases and serious illnesses such as cancer can remain in the workforce during and after treatment.