Preface: Why We Need Good Policy and Good Implementation of Public Paid Family and Medical Leave programs

By Brigid Schulte

Advocates and lawmakers with the best of intentions can work for years, decades even, to get legislation passed with the goal of helping families and improving the lives of people in America. But passing a good policy is only the first step. Implementing it well is what ensures that the good intentions of the policies actually work to make people’s lives better.

That’s certainly the case with paid family and medical leave (PFML).¹ PFML has the potential to help parents form healthier bonds with their children and protect their health and their babies’ health; to help keep workers—especially women—connected to the workforce and improve their economic security; to help people with health issues of their own or who are caring for a loved one make ends meet; and much more. But if people don’t know about the policy, they can’t use it. If forms are so complicated that few can fill them out properly, if the process is confusing or onerous, if the benefits of the program are so delayed that they don’t help when families need it most, or if administrators don’t have the data they need to see what is and isn’t working, then it’s the very families that the policy was intended to help who suffer most.

We set out to better understand the critical role that implementation plays in making PFML policies work, and how to ensure they work better for working families. We formed a unique partnership between New Jersey and two programs at New America, a nonpartisan think and action tank—the Better Life Lab, the work-family and gender justice program, and the New Practice Lab, which works at the intersection of ideas and experimentation to improve the design and delivery of policies focused on family economic security and wellbeing. The learnings in this paper are the result of a four-week discovery sprint by a cross-disciplinary team of designers, technologists, user researchers, subject matter experts and others in October and November 2019.

Perhaps most importantly, the sprint learnings make clear how important it is for those designing and implementing policies to think through the whole process from the user’s point of view. Using plain language, being transparent about the application process and the length of time it will take to consider applications, explaining the program and benefits through actual life events, like giving birth or bonding with a child or caring for a loved one, rather than through an alphabet soup of programs acronyms, can all go a long way to improving the user experience, smoothing the application process, with the potential to increase uptake rates and achieve the positive outcomes associated with PFML.

Another key learning is that timing is everything. While delays in longer-term benefit programs are a real problem for beneficiaries, delays in a short-term program like PFML make the program entirely unworkable, with workers struggling to cover household bills and medical expenses and provide care while wondering if the promised benefits will arrive before the short-term leave is over.

For this work, we built on the implementation best practice work of advocates and researchers with the Center for Law and Social Policy, Family Values @ Work, A Better Balance, the National Partnership for Women & Families, and others. These sprint findings are broadly applicable—not only useful for administrators and civil servants in charge of implementing the program in the state of New Jersey, but for administrators, agencies, and civil servants in states that have their own PFML policies. The learnings can also be useful for those implementing COVID19-related emergency paid leaves, as well as for lawmakers who are developing or considering PFML laws on the state or federal level, in order to design good policies with good implementation in mind from the start. Many of these principles are applicable to other benefit programs as well.

The United States, alone among advanced economies, has no national paid maternity leave policy for mothers and birthing parents.² It is one of six with no paid leave for fathers or non-birthing parents. Some workers are eligible for 12 weeks of unpaid leave under the 1993 federal Family Medical Leave Act (FMLA),³ but there is no national PFML policy to help support workers who need time away from work to take care of themselves, a new child or a loved one. The current system that relies on employers voluntarily offering PFML covers just 21 percent of the civilian workforce, with the highest-wage workers (36 percent) about seven times more likely to be covered than the lowest-wage workers (5 percent).

With a majority of children being raised in families where all available parents are working (that is, single-parent families or dual-income families), and with a coming elder care crisis, most workers will, at some point, need time off work for caregiving responsibilities. And workers themselves get sick; a recent analysis of the unpaid FMLA found that half of all leaves were taken by workers needing time to recover from their own medical illness. With 40 percent of Americans unable to cover an unexpected $400 expense—more now for those who’ve lost jobs due to the pandemic—most workers need supportive workplaces and policies to be able to manage their care responsibilities without risk of economic ruin.

The need is great: The Better Life Lab found in a nationally-representative survey that six in 10 adults say they anticipate needing to take time off in the future to care for a new child or adult family member. And, in a surprising finding, the share of men saying they anticipate needing time off work to provide care for a loved one was equal to that of women, defying conventional notions that women are the only ones with primary caregiving duties.

At the same time, a raft of research from competitive economies around the world that guarantee PFML, as well as from the handful of states that have stepped into the policy vacuum in the United States and created their own public policies, makes clear that PFML policies have enormous benefits. PFML policies have been shown to improve the health and wellbeing of workers and their children and families—increasing breastfeeding rates, reducing rates of infant mortality, maternal depression and stress levels, and creating more family stability. Though the research on the benefits of family caregiving and medical leave is less robust, a recent analysis of unpaid FMLA found that workers needing leave who couldn’t afford it or worried about workplace repercussions delayed or forewent needed medical treatment. Without access to paid leave and flexible work, informal family caregivers, men and women alike, are forced to reduce work hours or drop out of the workforce entirely, which a recent RAND study has calculated costs the U.S. economy $522 billion a year. PFML can also boost gender equity when men take leave, and counter economic and racial inequity. PFML not only increases labor force participation, particularly of women, it benefits businesses by fostering higher retention and lower turnover rates, reducing presenteeism (when sick or burned out employees force themselves to go to work but aren’t at their best), and increasing worker loyalty and morale, with a neutral to positive impact on productivity.

In New Jersey alone, a 2016 analysis by the Federal Reserve found that the state paid leave policy has had a “positive impact on wages and employment for women” and helped close the gender wage gap between women and men, helping to bring it down from 38 percent in 1996, to 27 percent in 2014, with an acceleration after 2009, when the state’s paid Family Leave Insurance (FLI) program went into effect.

As of January 1, 2021, six states—California, Rhode Island, New Jersey, New York, Washington and Massachusetts—and the District of Columbia have active PFML programs. Three more states—Colorado, Connecticut and Oregon—have passed laws that will go into effect between January 2022 and 2024. And momentum is building for a national PFML, which a number of surveys show has widespread bipartisan support. In the meantime, these state programs have been critical for supporting working families.

State PFML Programs: How They Started, and Who Pays

New Jersey was one of the first and remains one of the few states to operate a state-run Temporary Disability Insurance (TDI) program,⁴ which was enacted in 1948. (Rhode Island was first, in 1942, followed by California in 1946. New York passed its state TDI program in 1949 and Hawaii created an employer mandate to provide temporary disability in 1969.) As the name implies, these programs cover time off for workers to cope with or recover from their own medical issues, which leave them temporarily unable to work. After Congress passed the Pregnancy Discrimination Act of 1978, with the exception of Hawaii, these state TDI programs, including New Jersey’s, began to cover pregnancy and birth-related leaves for new mothers and birthing parents.

Over time, as more women entered the workforce and became important earners to their families’ economic security, as an aging population began to require more care, and as men sought to become more active caregivers, it became clear that these state TDI funds were not sufficiently meeting the care needs of a changing workforce and culture.

So some states, including New Jersey, began to pass legislation to create a new paid leave program, in addition to TDI, to cover more of these caregiving responsibilities. California, in 2002, became the first state to add paid family leave (PFL)—time off work to bond with or care for family and loved ones. New Jersey followed with Family Leave Insurance (FLI) in 2008, Rhode Island with Temporary Caregiver Insurance (TCI) in 2013 and New York with PFL in 2016. As a result of this legislative history, these states make a sharp institutional/statutory distinction between taking time off work to care for oneself, and time to care for others, which can be a source of confusion for workers and employers.

These paid leave programs are largely social insurance funds,⁵ paid for either by employees or by both employers and employees, through a payroll deduction, much like federal Social Security. Rhode Island and the District of Columbia offer coverage only through a state public fund. Other states, like California and New Jersey, allow employers to purchase private insurance or self-insure outside of the state public insurance fund, although such private plans are heavily regulated and remain very much the exception rather than the rule.⁶ In these states, TDI to cover medical leave to care for oneself is generally paid for by a mix of employee and employer contributions, while paid family leave to care for others is typically funded through contributions by employees only.

Around the world, the vast majority of national PFML programs in advanced economies are paid similarly through social insurance funds, sometimes with additional contributions from general revenue funds. Because both risk and resources are pooled, and because the life events that trigger PFML are relatively infrequent, researchers at the National Academy of Social Insurance argue that paid leave “can be provided universally at a low per-person cost.” Such universal programs have been shown to ameliorate inequality, whereas the current voluntary private paid leave system in the United States, because high-wage and white workers are so much more likely to have access to the benefit, has worsened economic and racial inequality.

Many of the more recent states to have passed PFML laws have no existing TDI programs and are creating new systems from scratch. These newer states fund programs through a mix of employee and employer contributions. For instance, PFML will be funded by employees only in Connecticut, employers only in Washington, D.C., and a mix of employer and employee contributions in Oregon and Colorado.

In New Jersey, as with the four other states with long-standing TDI programs, PFML is actually two distinct programs. The more established TDI, passed in 1948, provides benefits for workers who need time to recover from their own illness, injury or disability; since the 1970s, TDI has also covered leaves due to pregnancy and childbirth. The newer FLI, passed in 2008 and expanded in 2019, covers workers’ time off to care for loved ones, bond with a new family addition (a newborn, foster, or adoptive child), or cope with domestic or sexual violence. (Technically, FLI has two sub-programs FLI-Bonding and FLI-Care.) That means that birthing parents can apply for both TDI and FLI. Non-birthing parents and workers needing to care for other family members can apply only for FLI. For expediency, FLI was implemented using the legacy software system of the older TDI program. Both TDI and FLI are run by the New Jersey Department of Labor (NJDOL).⁷

Although workers can claim up to 26 weeks for TDI in New Jersey if medically certified for their disability, birthing parents are typically covered up to four weeks before delivery and up to six weeks after birth (eight weeks after a Cesarean delivery), or longer if there are complications certified by a healthcare provider.

When FLI first went into effect July 1, 2009, it offered six weeks of bonding leave for new (biological, adoptive, or foster) parents or caregiving leave for those needing to care for immediate family, to be taken all at once or 42 days taken intermittently throughout a one-year period. Paid through a modest payroll tax, capped at $33.50 per person per year, FLI paid 66 percent of an eligible workers’ salary, to a cap of $633 a week, or the annualized equivalent of about $32,000, about the same as New Jersey’s true poverty standard.

New Jersey’s FLI was championed and passed in 2008 at the end of Gov. Jon Corzine (D-N.J.)’s administration. But implementation was largely left to Gov. Chris Christie (R-N.J.), who did not see the new FLI program as a priority, later vetoing a $3 million proposal to boost outreach efforts as well as a proposal to expand the law’s provisions.

Gov. Phil Murphy (D-N.J.) campaigned vigorously on prioritizing and expanding both TDI and FLI, and in 2019 signed into law sweeping new expansions. As of July 2020, TDI and FLI beneficiaries now receive 85 percent of their average weekly wage, up to a maximum in 2021 of $903 a week. Workers eligible for FLI can now take 12 consecutive weeks or 56 intermittent days in one year of FLI to care for a loved one (who need not be an immediate family member), and for oneself or a loved one in the case of domestic or sexual violence.

Throughout this paper, we use TDI when referring to paid medical leave and FLI to discuss the state’s paid family leave. We refer to the overall New Jersey PFML program as “TDI/FLI.”

The goal of paid family leave and medical programs like New Jersey’s TDI and FLI programs is to provide needed support to help families through the joyful yet often overwhelming experience of becoming new parents, as well as through difficult, often unexpected, and potentially devastating illnesses or caregiving crises. That support, as stated above, has been shown to improve the health, wellbeing, and stability of families, children, communities, and businesses. So if people don’t know about or aren’t using the program, the policy isn’t working to its full potential, and states aren’t able to reap the full potential rewards associated with PFML.

Prior to the discovery sprint, formal and informal data showed that states with PFML programs faced real challenges. First, many workers didn’t know their states have paid family leave programs, much less that they could qualify for benefits. Surveys in California in both 2011 and 2015, for instance, found that more than half of California workers were still not aware of the state’s paid family leave program, which was passed in 2002 and went into effect in 2004. In New Jersey, three years after its FLI law went into effect, a 2012 poll found that fewer than four in 10 New Jersey residents had seen or heard anything about the program, with young people and people of color least likely to have heard of the program (although recent surveys show this low rate has since improved).

Partially as a result of low awareness, data suggested that many working families were not using PFML programs. One study found that New Jersey has an estimated 1.2 million family caregivers, but that fewer than 1 percent of family caregivers used Family Leave Insurance between 2009 and 2015.⁸ In many states, while birthing parents may take TDI paid temporary disability leave, fewer go on to take paid bonding leave. And few men take bonding or caregiving leave, which studies have found is crucial for family health and for promoting gender equity. In 2017, men accounted for just 12 percent of FLI bonding claims in New Jersey. Men made up about 30 percent of paid bonding leave in California and Rhode Island in the same period.

Anecdotal evidence also suggested that processing delays were a major challenge for PFML applicants, with reports circulating in the media of beneficiaries waiting months to receive payments. Those delays can degrade trust in the system and, via word-of-mouth, discourage others from applying in the first place.

It’s important to point out that low take-up rates for PFML do not mean that there is limited demand, or that people don’t need paid caregiving leave. Instead, it’s critical to identify, understand and resolve the barriers that people face—culturally, financially, administratively, and otherwise, including in how the program is implemented—that keep them from using and benefiting from a PFML program. That’s what this discovery sprint was intended to do.

This project was designed to better understand challenges, identify barriers and find solutions in order for states like New Jersey—and potentially the federal government—to effectively implement PFML programs. The need is great; nearly six in 10 people in a recent nationally-representative survey said they anticipated needing to take time off work in the near future to care for a loved one. And the benefits of PFML to individuals, children, families and businesses—and to efforts to improve equity—are clear. Failing to implement good policy is tantamount to subverting good policy—a phenomenon known as “policy by other means.” Implementing good policy well, on the other hand, can make all the difference in the health, wellbeing and in the lives of the very people it was designed to help.