A round table discussion was convened by the U.S. Department of Labor Women’s Bureau, in collaboration with the Rutgers Center for Women and Work, the Employers Association of New Jersey and N.J. Working Families.
The discussion was one of a series of nationwide conversations the Women’s Bureau was hosting to understand the impact that paid family leave has had in the states that have implemented state programs.
New Jersey enacted a Family Leave Insurance (FLI) program in 2008. The program enables eligible employees to collect six-weeks of state paid monetary benefits when out of work to care for a newborn, newly adopted child, or ill family member.
The insurance law extended the N.J. Temporary Disability Benefits Program.
The main focus of the discussion was to collect information about how employees access the program and what steps, if any employers are taking, to educate employees about the benefit.
After six full years of the program, New Jerseyans have been approved for 167,141 paid leave claims and received $463 million in benefits. The vast majority of claims - a little more than eight of every ten - have been to bond with a newborn or newly adopted child, while the remainder was to care for an ill family member.
The cost of family leave is borne entirely by a modest contribution of working New Jerseyans, not their employers.
Although the law requires employers to provide employees with notice of the program, research conducted by the Rutgers Center for Women and Work shows that 60 percent of New Jersey workers are unaware of program.
In other words, though employees pay one hundred percent of the benefit from their paycheck, most workers do not even know about the program.
Some small business advocates claim that the program causes inconvenience.
But a study by Center for Economic and Policy Research, a Washington D.C. think tank based on 18 in-depth interviews with employers in a variety of industries throughout New Jersey, concluded that the paid family leave law has had little negative impact on how employers do business.
John Sarno, president of the Employers Association noted that the insurance program is often confused with federal and state leave laws.
But those laws apply only to employers with 50 or more employees, he said.
Ninety-five percent of employers in the state employ fewer than 50 employees.
“If employees are unaware [of the program], I’m sure most small businesses are equally unaware,” says Sarno.
It was reported that the New Jersey Department has no resources to get the word out. But it does host a website that explains the program.
Employers that participated in the roundtable said that they experienced a small increase in paperwork due to administration of the program. And despite fears that the program would be abused, no employers were aware of any instances of abuse.
Some participants found that the program improved employees’ morale.
But the Center for Economic and Policy Research study reported that some employers felt strongly that the FLI program increased the amount of time that employees took off. One of the HR professionals noted that people were staying out longer explicitly because of the FLI, and increased their leaves by exactly the amount of time they were receiving benefits through the program. As he put it, most employees “stayed out only as long as they were able to get paid.” (In fact, statewide data show that not all FLI leaves lasted for the maximum six weeks that benefits are available. Bonding leaves averaged 5.4 weeks in 2012 while leaves for family care averaged 4.2 weeks.)
Several employers noted that their employees encountered delays in processing and sending benefits. And many complained their employees had to wait several weeks before receiving their first FLI benefit debit card.
“The short-term disability program is much more complex to administer and we have been doing it for decades without much problem. I’m not sure why FLI should not be any different,” says Sarno.
He speculated that part of the problem may rest in attitudes toward family care.
“Most employers don’t fault an ill or disabled employee and are more willing to be inconvenienced by their absence. But I think some view family care as a personal issue that should not be the employer’s problem,” he says.
A recent report by the President’s Council for Economic Advisors observes that family leave programs from an employer’s perspective, whether paid or unpaid, can have a positive effect on long-term productivity by improving recruitment, retention, and employee motivation.