When it comes to providing paid leave, relying on the good nature of business owners is a gamble too large to risk.
On Friday, Sen. Marco Rubio became the first GOP candidate to release a plan for providing paid leave to Americans. The government should give businesses that voluntarily offer paid leave to their employees tax cuts for doing so.
This proposal will not eliminate hostile work environments that do not accommodate parents or those who need emergency time off — voluntary paid leave only serves to exacerbate the preexisting conditions. Unless we demand mandated paid leave, change won’t come.
Proposals like voluntary paid leave view businesses only through the lens of progressive business models that can afford to offer paid leave — like those of Facebook and Netflix — which do not reflect the typical business. Big corporations can afford to and must prioritize workers, as they typically employ individuals with competitive skill sets.
Facebook voluntarily provides mothers and fathers four months of paid leave — but Facebook also made $719 million, according to its second quarterly earnings report for 2015. Netflix offers full paid leave for new mothers or fathers an entire year after birth. However, this option is not available to hourly workers — so how progressive do these companies really get?
The U.S. government has enacted tax policies similar to Rubio’s proposal in the past. They’ve had limited success.
For example, tax credits are currently in place for companies that voluntarily pursue initiatives like hiring veterans or people with disabilities and offering on-site child care. The 1973 IRS ruling on title 26, section 162 of the tax code allowed employers to deduct their contributions to child care centers as business expenses, and the 1981 Economic Recovery Tax Act made employer-sponsored child care a non-taxable benefit for employees. Yet neither of these policies had a significant effect on businesses’ adoption of employer-sponsored child care. When given the choice, businesses were reluctant to take on the cost of enacting these initiatives, despite the potential monetary benefits.
Erin L. Kelly, a sociology professor at the University of Minnesota, found that organizations that rely on professionals, managers or technical workers for their core tasks are 8.7 times more likely to provide child care centers than other organizations. Ultimately, the businesses that provided these kinds of incentives for their workers are already inclined to do so.
Effective policies mirror those proposed by Democratic presidential candidates, and already in place in California, New Jersey and Rhode Island. Federally-mandated paid-leave proved effective where voluntary initiatives failed.
In 2004, California passed the country’s first paid family leave law, financed by a payroll tax paid by employees. New Jersey and Rhode Island have since initiated similar programs.
A report prepared for the U.S. Department of Labor, Office of the Assistant Secretary for Policy and Chief Evaluation Office examined the effects of the legislation a decade after enactment.
The report found the legislation increased new mothers’ leave-taking in California by around three weeks, with the largest increase among disadvantaged women.
About 90 percent of employers reported positive effects or no effects in terms of productivity, profitability, retention and morale. Despite these benefits, it is unlikely that employers would have voluntarily pursued — and embraced — paid leave.
Paid leave should be a federal responsibility, not a business option.