Thoughts and Reflections of the Family and Medical Leave Act at 25

Life happens sometimes, and that was the impetus behind the creation of the Family and Medical Leave Act (FMLA). 25 years ago yesterday, Congress signed the FMLA into law. The purpose behind this labor law is to cover job-protected leave for medical and family reasons, including pregnancy, adoption, placement of a foster child, medical leave, and family military leave. The FMLA allows for eligible employees to take up to 12 weeks in a calendar year to tend to these matters. Unlike other countries' leave policies, the FMLA's leave policy provides unpaid leave only. The unpaid provision has caused much controversy over the years. Nevertheless, I do wonder if FMLA is successful policy. Here are some thoughts I have on the FMLA and paid leave more generally.

• Limited eligibility. Since the FMLA only applies for employers with over 50 employees, 44 percent do not even qualify for FMLA leave. Furthermore, FMLA only covers employees that have been at their employer for 12 months. This exemption does not cover a considerable minority, which means coverage is not as extensive.
• Many eligible people do not take FMLA. According to a 2014 survey commissioned for the Department of Labor (DOL), 45 percent of eligible employees did not take FMLA leave because it would cause financial hardship. This finding should not be surprising since FMLA only provides for unpaid leave. The DOL survey also showed that a third of those who ended up taking FMLA cut their leave time short to cover lost wages.
• Wage gaps. A 2016 study from the National Bureau of Economic Research found that FMLA had a small, positive effect on the women's employment level, but had no effect on the wage gap (Blau and Kahn, 2016). 
• Employment gaps. Even the New York Times points out that although FMLA makes it 5 percent more likely that a woman remains employed, FMLA makes it 8 percent less likely that a woman receives a promotion. 
• There is more than a philosophical consideration to the notion of paid maternal leave. Other countries can provide us an idea of how family leave can affect female employment. Looking at Chile as an example, paid maternal leave helps ease the transition back into work. However, the law also had the result of their wages being 9 to 20 percent lower than without paid maternal leave laws (Prada et al., 2015). Spain's maternity leave law was not any better. In Spain, companies were 6 percent less likely to hire childbearing women, 37 percent less likely to promote them, and 45 percent more likely to dismiss (Fernández-Kranz and Rodríguez-Planas, 2013). In a study of 22 countries, family-friendly policies in Europe makes it more possible to work, but also more likely to be stuck in a dead-end job (Blau and Kahn, 2013).

Postscript: Although proponents of paid leave can and do point out the flaws of FMLA, there is also the market failure of a lack of paid leave to consider. Only 13 percent of employers offer paid family leave. This is more pronounced by socioeconomic class. Only 4 percent of those in the lowest 10 percent have access to paid leave. What I can say is that 25 years of FMLA, my guess is that FMLA is not going to get repealed. It will probably not even get expanded. If anything, it is likely to get replaced with paid family leave for at least two reasons. One is that the United States is the only developed country without paid leave. This fact helps give the "paid leave" movement some traction. The second is that mandatory paid leave is gaining in popularity. Pew Research found that over 80 percent are in support of mandatory paid leave, although there is more of a division as to whether it should be mandated by the government or employers should choose themselves. The Right-leaning American Enterprise Institute is on board with paid paternal leave. 25 years after FMLA, the conversation about family and medical leave is not going away. We should continue to have that conversation.

I analyzed mandated paid leave four years ago, and am tempted to take another look at paid family leave in light of the increased momentum. Looking at the FMLA reminds me a golden rule of policy: every policy has its tradeoffs. This is especially true with employee protection laws, whether that is menstrual leave or France's employee protection laws. Yes, paid leave makes it easier for women to return to work. There is evidence that it provides some job security. However, as we see above and in the other hyperlinks in this paragraph, they come with a price. Women are less likely to get promoted or hired in the first place. Labor economists generally find that the cost of fringe benefits primarily fall on the employee, which is something to consider. As we move forward with the "paid leave" debate, we need to keep these costs and benefits in mind.