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THE WHITE HOUSE
WASHINGTON
January 6, 1998
MEMORANDUM TO THE PRESIDENT
FROM:
BRUCE REED
GENE SPERLING
SUBJECT:
FAMILY AND MEDICAL LEAVE EXPANSIONS
A number of your advisors believe that your child care initiative should include a
proposal to help parents stay at home with their young children. In addition to giving parents
greater opportunity to make real choices in raising their children, these policies could help
inoculate your child care initiative against conservative attack. Two pieces of your child care
proposal help parents who wish to stay at home: the Early Learning Fund pays for home
visitation and other parent education programs (for both stay-at-home and working parents); and
the Research and Evaluation Fund supports demonstration projects to test policies to help parents
stay at home. This memorandum outlines proposals (without budgetary implications) to expand
the Family and Medical Leave Act (FMLA) that will help parents stay at home with their
newborns.
FMLA currently requires employers with 50 or more employees to provide up to 12
weeks of unpaid leave to eligible employees for certain family and medical reasons, including
the care of a new child. Employees are eligible if they have worked for the employer for at least
12 months and for at least 1,250 hours over the previous 12 months, and if the employer has at
least 50 employees working within 75 miles of the employee's worksite. Public agencies are
covered by FMLA regardless of size, but employees must still meet the eligibility requirements,
including working at a site where at least 50 employees are employed within 75 miles.
Options to expand FMLA include: (1) applying FMLA to businesses with 25 or more
employees, either in one step or incrementally; or (2) extending the permissible leave period to
24 weeks for parents with newborns.
Expanding Coverage to Businesses with Fewer Employees. You could call for
lowering FMLA's employer coverage threshold from 50 to 25, either in one step or
incrementally (for example by lowering it to 40, then 35, and finally 25). Senators Kennedy and
Dodd have proposed to lower the threshold to 10 employees, but your advisors believe that
FMLA would be too great a burden on employers of that size.
1
According to the Department of Labor, 67 million employees are currently eligible for
FMLA. Lowering the threshold to 40 would add 3.4 million people; lowering it to 35 would add
5.4 million people. Lowering the threshold all the way to 25 would add about 10 million people,
increasing by 15 percent the number of employees covered by FMLA, and doubling the number
of employers covered by the Act (from 330,000 to 690,000).
This proposal would give FMLA protection to more people at no cost to the federal
government. It would receive strong support from labor, women's groups, and other core
Democratic constituencies. The proposal, however, would provoke strong business opposition.
Many Republican and some Democratic Members of Congress would likely criticize any attempt
to lower the threshold as detrimental to small business. (According to a survey by the Family
and Medical Leave Commission, however, the great majority of businesses that have
implemented FMLA report little or no cost increases.) Introducing a FMLA proposal might also
raise the flex-time debate in Congress again.
Extending FMLA Leave from Three to Six Months. This option would allow workers
who are currently eligible for FMLA to take a longer leave. Approximately 12 million workers
take FMLA leave. According to the FMLA Commission's survey, about 12.5 percent or 1.5
million workers take the full 12 week leave. Of these, 450,000 workers took 12 or more weeks
leave for maternity, disability, or the care of a newborn, adopted or foster child.
This proposal would give parents additional time to spend with their new babies (again at
no cost to the federal government). It might help respond to the charge that our child care
proposal helps only working parents, not those who -- with a little help -- can and want to stay
home with their children for a period of time. However, any family leave policy would not fully
respond to that criticism because leave is by definition geared toward people who have been in
the workforce and will return to it. In addition, this proposal would not help workers who
currently cannot afford to take even the full 12 weeks of FMLA leave. According to the
Commission's survey, 65 percent of those who would have liked to take leave to care for their
newborn, foster, or adopted child could not do so for economic reasons. Because this proposal
would not help such workers, FMLA advocates would likely give it only lukewarm support.
Finally, businesses already covered by FMLA would oppose the extension because guaranteeing
six months of leave would disrupt their operations.
Recommendations. Your advisors all agree that lowering the employee threshold will
provoke too much opposition and will not therefore be seen as a viable proposal to help parents
stay at home.
The views on the extension from three to six months are more complex. The Treasury
Department does not have a view on the political merits on this proposal, but is concerned that
by raising the cost of employing women, this proposal will result in reduced wages or reduced
employment for all women, while likely disproportionately benefiting affluent women. The
Commerce Department shares this concern, but recognizes that longer leave will allow some
2
parents to stay home to care for their young children throughout the critical first six months
knowing that their job is protected, and therefore supports it. The Labor Department recognizes
the limited benefit of the extension, but supports it nonetheless. The SBA opposes extending
FMLA on the ground that it will engender widespread opposition from the small business
community and may undermine gains we have already made.
DPC and NEC support extending FMLA from three to six months. (NEC feels that there
are legitimate business and economic concerns with the extension, but in the final analyis is more
for it than against it.) DPC and NEC do not believe, however, that you should announce this
proposal tomorrow at the unveiling of your child care initiative. DPC believes that extending
FMLA from three to six months may respond to conservative attacks because it allows at least
some parents to stay at home to care for their young children in the critical first six months; DPC
worries, however, this proposal may get lost if proposed tomorrow, given the size and
significance of your child care announcement. NEC is also concerned that this proposal may
taint the child care announcement with business criticism.
3
Ten
Chris
JAN 9 1998 5:35 pm
Tore
THE WHITE HOUSE
Cynthia
Mike
WASHINGTON
THE PRESIDENT HAS SEEN
Tulle
1-12-98
January 9, 1997
copied
MEMORANDUM FOR THE PRESIDENT
Reed
Kagan
FROM:
Bruce Reed
COS-
Elena Kagan
SUBJECT:
DPC Weekly Report
1. Child Care -- Response to Announcement: We are pleased with the response so far
to your child care initiative. Children's advocates and child care experts are overjoyed at both
the level of funding and the composition of the package (e.g., the ratio of subsidies to tax cuts).
Hill Democrats and some moderate Republicans are enthusiastic about the package, as you heard
at Thursday's congressional meeting. Governors - including a few Republicans - have praised
the extent of state flexibility in the plan. Even conservative Republicans in Congress had a hard
time attacking your proposal. Rep. Pryce, whom Speaker Gingrich asked to respond to the
proposal for the House Republican leadership, admitted that you had "resisted the urge to have
the federal government control child care." Some Republicans alternated between accusing you
of spending too much money and trying to claim that they had spent even more for child care in
the past.
The most serious criticism, which we knew we would face, is that the package does little
to help parents who want to stay at home to care for their children. (A similar point was made in
the opinion piece by David Blankenhorn appearing in the New York Times that you recently
asked us about; as you recall, he criticizes tax cuts for child care and supports expanding the
child tax credit to help parents of young children stay at home.) As you know, we can blunt this
charge somewhat by coming out for an expansion of the FMLA in the State of the Union to
allow more workers to stay at home for longer periods with their newborns. We are also open to
discussing with members of Congress an expansion of the child tax credit, although we found
such proposals too expensive to incorporate into our package. Most important, we cannot let
anyone forget your consistent record of providing families with real opportunity and choices -
for example, through the child tax credit, FMLA, EITC, minimum wage, and CHIP.
2. Health -- Response to Medicare Buy-in Announcement: Your Medicare buy-in
proposal provoked a great deal of comment. Some Republicans, including Senator Gramm and
Rep. Bill Thomas, were extremely critical of the proposal, arguing that it would exacerbate
Medicare's financial problems. (Gramm compared Medicare to the Titanic and warned about
putting extra passengers on board.) The base Democrats were very pleased with the proposal -
particularly after Republicans strongly opposed it. Though liberal groups also were pleased that
we are addressing this issue, they believe we must include some kind of subsidy for low-income
Americans. Elite validators gave this policy mixed reviews: while uniformly recognizing the
THE
1-12-98
need of this population for affordable insurance, some (including the New York Times) praised
the self-financing feature of the program, while others expressed concern that the proposal would
create the demand for further, less fiscally responsible subsidization.
3. Drugs -- Substance Abuse and Prisoners: The National Center on Addiction and
Substance Abuse released a study on Thursday finding that drug or alcohol use helped lead to the
incarceration of 80 percent of all inmates in the nation's prisons and jails. According to the
report, 1.4 million prisoners (out of a total 1.7 million) were high on drugs or alcohol when they
committed their crimes, stole property to buy drugs, and/or had a history of drug and alcohol
abuse.
As you know, the 1994 Crime Law mandates that 100 percent of all federal prisoners
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defined as eligible receive substance abuse treatment by 1997. According to the Bureau of
Prisons, the federal prison system has met this requirement. Since 1994, we have made some
form of substance abuse treatment available in every federal prison facility, tripled the total
number of inmates treated in the federal system, and increased the number of residential
The an amount who
treatment centers in federal prisons by 30 percent (from 32 to 42). In addition, legislation you
offered requires states to submit comprehensive plans of testing, sanctions, and treatment by
March 1998 as a condition of receiving prison construction funding.
Motels refull Uner -uxe
To build on these efforts, we are preparing a directive from you to the Attorney General
to: (1) require states, as part of their testing and treatment plans, to estimate current drug use in
prisons and measure progress yearly; (2) draft legislation to allow states to use prison
construction funds to implement their testing and treatment plans; and 3) draft legislation to
require states to enact increased penalties for smuggling drugs into prisons as a condition of
receiving prison construction monies. An event focusing on this directive is tentatively
scheduled for Monday.
4. Drugs -- Anti-Drug Media Campaign: The anti-drug media campaign began on
Thursday in Washington, D.C. -- the first city in the 12-city pilot. Anti-drug advertisements have
started to air in the District during prime-time network television shows, with radio and Internet
ads to commence next week. ONDCP will roll out the media campaign in the remaining pilot
cities throughout the month of January. The other 11 pilot cities and rollout dates are as follows:
Atlanta (1/20), Baltimore (1/13), Boise (1/13), Denver (1/16), Hartford (1/23), Houston (1/15),
Milwaukee (1/21), Portland (1/22), San Diego (1/9), Sioux City (1/20), and Tucson (1/15).
5. Crime -- Brady Checks: As you know, Arkansas remains the only state that is not
conducting background checks prior to handgun sales. Although Attorney General Winston
Bryant issued an opinion saying that state police have the legal authority to conduct checks,
Governor Huckabee has ordered the police not to do so. In response, Bryant has asked the
maw a to
Polus will big
Treasury and Justice Departments to make him (rather than the state police) the designated chief
law enforcement officer for the entire state; under this scheme, federally licensed dealers would
refer the names of potential handgun purchasers to the AG's office, and employees of that office
2
THE
1-12-98
would check the names in the FBI's NCIC (rather than the state police's) database. Justice and
Treasury are currently inclined to grant Bryant's request later this month. This action may
provoke a strong response from Huckabee, who is currently not aware of Bryant's request.
6. Crime -- Slain Officers: The National Law Enforcement Officers Memorial Fund
(NLEOMF) reported last week that the number of officers killed in the line of duty increased by
nearly 40% in 1997, from 116 in 1996 (the lowest number since 1959) to 159 last year. The
1997 figure exceeds the 1990s average of 151 line-of-duty deaths per year. NLEOMF attributes
the rise in deaths to: (1) an increase in firearms-related deaths (70 in 1997, as compared to 56 in
1996); (2) an unusually high number of traffic fatalities; and (3) 10 multiple-death incidents, in
which a total of 22 officers were killed.
7. Welfare -- Child Support Computer Systems: We are working closely with a
House-Senate group convened by Rep. Clay Shaw's staff on the child support computer systems
issue you discussed with Senator Feinstein this fall. Our goal is to put in place a new system of
penalties that are large enough to ensure that states develop effective computer systems, but not
so large as to disrupt states' child support collection efforts. As you know, current law requires
us to withhold all federal child support funds from a state without a statewide child support
computer system - a penalty we intend to retain in the legislation (at least as a threat) for
egregious cases. Shaw's initial proposal, which we think makes sense, would impose an initial
penalty of 4 percent of federal child support funds in the first year, with higher penalties in later
years. Once a state's system is complete, it could earn back a portion of the penalty. Shaw
wants to introduce legislation the first day of Congress and move it through the House by the
second week of February. As always, the Senate is expected to move more slowly, but could
pass the legislation by April. By then, HHS expects nine states to remain without statewide
computer systems: California, Michigan, Illinois, Ohio, Pennsylvania, Indiana, Hawaii, Oregon,
and New Mexico.
8. Welfare -- Welfare Recipients in College: You recently asked us about a report in
the Washington Post that some college students on welfare are dropping out of school to meet
new work requirements. As you know, the welfare law does not count education that is not
directly related to a job toward the work participation rates. States, however, have significant
flexibility to excuse college students from work, given that the required participation rate is now
at 30 percent and peaks at 50 percent. In addition, welfare recipients can combine work with
their studies (as most college students do), particularly if work-study jobs are available. To
encourage this result, we asked Secretaries Riley and Shalala to write to the nation's college
presidents in September to explain the law and stress the importance of providing work-study
jobs to welfare recipients enrolled in their schools. (Most work-study jobs are only 10 hours per
week, but the letter explained that this is not a legal requirement.)
9. Welfare - Delaware Evaluation: Governor Carper released on Monday an
evaluation of the state's welfare reform waiver program calied A Better Chance (ABC). The
program began in 1995 as one of the first comprehensive statewide waivers granted by the
3
THE
1-12-98
Administration. Initial results are encouraging: by the fourth quarter after the program started,
program participants had 24 percent higher employment, 16 percent higher earnings, and 18
percent lower average benefits than the participants in the control group. The evaluation found a
fairly high rate of sanctioning: 49 percent of the participants were sanctioned at least once for
failing to comply with the program's employment or family responsibility (immunization, school
attendance) requirements. It is interesting to note in evaluating these results that Delaware's
caseloads have not gone down as dramatically as those of many other states; the decline since
January 1993 has been 21 percent. This relatively low decline may result from ABC's "make
work pay" incentive that allows recipients to keep more earnings and still remain eligible for
welfare.
10. Education - California Math Standards: Proposed new math standards in
California have provoked a heated debate in the last few months, pitting educators who
emphasize problem solving against those who favor a more basic skills approach. The California
State Board of Education last month adopted the more conservative view, over the objection of
Superintendent Delaine Eastin. The head of the Education Directorate at the National Science
Foundation subsequently sent a letter to the Chair of the California State Board strongly
criticizing the decision and implying that it would jeopardize continued NSF funding for six
Urban Systemic Improvement sites in California. The letter upset conservatives (and others),
who viewed it in our view, correctly as an example of inappropriate federal intrusion in state
curriculum matters. Diane Ravitch warned us immediately that it could give Bill Bennett a
pretext for withdrawing his support of your national testing initiative. As a result, we worked
with NSF this week to draft a letter from NSF Director Lane to the California State Board
your
clarifying that NSF would not second-guess state standards and emphasizing the importance of
basic skills. Based on recent conversations with Ravitch, we believe this step has been sufficient
to prevent Bennett's reversal.
11. Education Urban Education Report: Education Week issued its annual report
on education reform in the 50 states on Thursday, focusing on the plight of urban school districts.
The study noted that approximately 40 percent of students in urban districts reached the basic
level on the most recent NAEP 4th grade reading and 8th grade math and science exams in 1994
and 1996, compared to over 60 percent in each of these subjects in non-urban areas. The study
also found discrepancies in resources, with urban districts spending about $500 less per child
annually than non-urban districts. The Education Week issue also detailed a dozen promising
reform strategies to raise achievement in districts around the nation e.g., setting high standards;
holding schools accountable for results and giving schools greater flexibility; creating small,
more intimate schools or schools-within-schools; recruiting well-prepared teachers and providing
them with continuing training and support; training principals to be effective school leaders; and
promoting school choice. Your existing and planned initiatives including the new Education
Opportunity Zones proposal that you previewed in December match up very well with these
reform prescriptions.
4
THE
HAS
SEEN
1-12-98
12. Education -- Life-long Learning Card: You recently asked us about Bob Reich's
idea of a life-long learning card -- essentially a bank card consolidating all federal education
benefits (Pell, IRAs, education tax credits and deductions, and job-training funds), against which
education expenses could be deducted. DPC and NEC staff have begun to look into this
proposal, but we do not yet have a specific recommendation. The Education Department is
currently intending to begin a pilot project by October 2000 to use bank cards to disburse federal
aid to post-secondary students. Our instinct is that bank cards may be effective to deliver grants
and loans, but less useful for tax credits and deductions. We will continue to explore this issue.
possia "Mio " Glify may Re
5
Increasing Maternity Leave Resources by Promoting Improved Withholding
The Problem: A major limitation on the ability of families to take full advantage of FMLA is that
they do not have the financial resources to support an extended absence from the labor force by
the female earner. This may be one reason why only 16% of women who take FMLA for care of
a newborn use the entire 3 months of leave.
A Partial Solution: There is, in principle, a partial solution to the cash flow problem facing
families taking leave: promote the use of prompt withholding adjustment among families who
have newborn children. In this way, the families can avail themselves immediately of the tax
benefit that results from this new child.
When a child is added to the family, the tax burden falls for two reasons: the family is
entitled to an additional personal exemption, and a new, additional child tax credit
(ultimately $500 per child).
But, if the family does not adjust their withholding for the arrival of this new child, they
will not benefit from these features until their taxes are filed the next year. This may be
too late for cash-strapped families who are reluctant to take leave because they can't
make ends meet.
Over-withholding is a significant phenomenon, with the average refund exceeding $1,200
in 1996 (although, given the persistence of overwithholding, this proposal is unlikely to
induce more than a small percentage increase in the total amount actually withheld).
For the typical family with no other children, where the wife takes three months of leave
upon the birth of their first child, they could receive roughly $100 in reduced tax
payments over the three months of leave by promptly adjusting withholding. For the
second and subsequent children, the impact would be larger; for example, withholding
adjustments could result in roughly $350 upon birth of a second child.
The Policy: We could promote increased withholding by those taking leave in at least three ways:
The President could use the "bully pulpit" to urge parents to change their withholding to
increase take home pay after the birth of a child.
As part of the requirements of FMLA, employers could be required to notify employees
about the advantages of adjusting withholding at the birth of a child, through the same
mechanisms now used to notify employees of their FMLA rights.
Employers could also be required to provide employees taking maternity leave with a
W-4 form to update their withholding (or, more relevantly, their husband's withholding).
This would impose some small costs on employers, but would make it more likely that
families actually take the step of adjusting withholding.
1-6-98
THE WHITE HOUSE
WASHHINGTON
January 6, 1998
MR. PRESIDENT:
The attached Sperling/Reed memo asks you to decide whether
to include in tomorrow's child care announcements a proposal
to expand the FMLA to help parents stay at home with their
young children. NEC/DPC recommend against an
announcement tomorrow feeling that it will get lost in the child
care package, but thought you should make the decision.
Two options are presented. But a policy decision is not
required unless you decide to make an announcement
tomorrow. Option 1: lower the FMLA's coverage threshold
capied
from businesses with 50 employees to those with 25, either in
one step or incrementally; or Option 2: extend the period of
Reed
FMLA leave from 3 to 6 months. There is no support for
Option 1 as it will provoke too much opposition, particularly
Sperling
from small business. NEC/DPC favor Option 2 but it enjoys
COS
only lukewarm support from Treasury, Commerce and Labor,
and is opposed by SBA.
fen Klein
Rahm and Podesta agree that the announcement should be
deferred. If you decide to make an announcement, Podesta
favors Option 2. Erskine hasn't had a chance to weigh in on
the policy options.
Defer FMLA announcement:
Agree (recommended)
Disagree
Discuss
If you decide to make announcement:
Option 1
Option 2
Discuss
Phil Caplan Phil
01/13/98 16:50 FAX
NATL ECONOMIC COUNCIL
001/001
THE WHITE HOUSE
WASHINGTON
January 13, 1998
MEMORANDUM FOR DISTRIBUTION LIST
FROM:
Gay Joshlyn, National Economic Council
SUBJECT:
FMLA Meeting
There will be a meeting to discuss FMLA on Thursday, January 15, at 3:30 pm in OEOB Room
324. Anne Lewis and Jennifer Klein will co-chair the meeting. Please give me a call at 456-
2801 if you need to be cleared into the building or if you are not able to attend.
Distribution
Jennifer Klein, DPC
Nicole Rabner, DPC
Neera Tanden, DPC
Emil Parker, NEC
Anne Lewis, NEC
Chuck Marr, NEC
Geri Palast, DOL
John Fraser, DOL
Mary Ann Wyrsch, DOL
David Lane, DOC
Jon Gruber, TRS
Augustine Faucher, TRS
Larry Matlack, OMB
Amy Finkelstein, CEA
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THE WHITE HOUSE
WASHINGTON
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inoculate your child care initiative against conservative attack. Two pieces of your child care
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visitation and other parent education programs (for both stay-at-home and working parents): and
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FROM : Beach House
PHONE NO. : 3019510340
Jan. 06 1998 03:20PM P1
fax message from Carol M. Beach
fax number: 301-951-0340 phone number: 301-951-9643
office fax: 202-885-1216 office phone: 202-885-1228
to:
JEN KLEIN
date: 1/6/98
re: COCUMN -
Will You PLS. CAN ME As
Soon As You READ THIS So
IT CAN Go To CREATORS
total number of pages:
5
FROM : Beach House
PHONE NO. : 3019510340
Jan. 06 1998 03:21PM P2
- 1
Draft #3
FIRST LADY HILLARY RODHAM CLINTON
"TALKING IT OVER/CREATORS SYNDICATE
COLUMN FOR PUBLICATION JANUARY 8, 1998
Many of you are rushing to read this as you drink one more cup of coffee before
setting off for work. If you're lucky, you won't worry about the safety of your children
while you're gone. If you're lucky. you trust that they're in a safe, nurturing, and
stimulating environment -- one that they're excited about going to each day - if you're
lucky.
Unfortunately, many working parents aren't so lucky. With the help of relatives,
in-home providers, professional day care centers, and before- and after- school programs,
working moms and dads manage to cobble together affordable care for their children.
Some of this care is excellent. Tragically, though, recent national studies find that most
is "poor to mediocre."
This week, my husband took a major step toward improving child care for
America's working families. In the largest investment in child care in our nation's
history, he proposed increasing child care tax credits for three million working families;
doubling the number of children receiving child care subsidies; providing after-school
up to
each year
500,000
care for 200,000 children; funding/50,000 scholarships to promote the training of child
care providers; providing financial incentives for states to toughen enforcement of quality
standards; and providing home visits, parent education, and consumer education about
child care.
In the over 25 years I have worked on children's issues, 1 have seen firsthand the
results of our failures to invest in our children at the most critical stages in their lives. I
FROM : Beach House
PHONE NO. : 3019510340
Jan. 06 1998 03:21PM P3
-2-
have learned why good child care is SO critical to our children, our families and our
future. Although studies show that children are not adversely affected by having parents
work outside the home, there is evidence that poor care either inside or outside the home
has damaging consequences, especially in the first three years of life.
In October, the President and I hosted a White House Conference on Child Care.
That conference was meant to start a conversation - - to renew our efforts to improve child
care in America. This week, the President took action.
At the White House Conference, lots of questions were raised: How to ensure the
safety of every child in child care? How to do a better job of training and paying
caregivers? How to encourage more employers to provide child care benefits to
employees? How to make successful after-school programs more widely available? How
to learn from the good models that we have in every community? The President's
proposal offers answers to these questions.
Each of us who has frantically scrambled to find alternative arrangements for a
sick child, who has murmured instructions into the phone after school, who has sent a
child off to school with "just a little cold" - each of us understands the urgency of the
situation.
But, new scientific information makes the case even more compelling. We now
know from the White House Conference on Early Childhood Development in April that
what happens to a child in the earliest years of life affects how well that child will learn
for a lifetime. With 45 percent of our children under age one in day care regularly, the
issue of quality child care has tremendous bearing, not just on individual lives, but on the
future of our nation.
FROM : Beach House
PHONE NO. : 3019510340
Jan. 06 1998 03:22PM P4
- 3 -
It is no surprise that demand for quality child care is growing with the dramatic
changes in the American work force and way of life over the past 40 years.
During World War II, the federal government stepped in to provide federally
funded day care for the mothers who went to work to support the war effort. But, today,
it is the ordinary, not the extraordinary that drives our efforts. Now more than 80 percent
of married mothers with a child under age six work outside the home and 13 million
children, under the age of six, are in child care.
In addition, because the school day ends before the workday does, families also
need care, supervision, and stimulating activities for school-age children after school.
This is also important in our continuing fight against crime for it is between 2 and 8 p.m.
that adolescents are most likely to find themselves in trouble with the police.
6pm
Sadly, though, as a society, we have never sufficiently valued the work of caring
for our children - whether by mothers or other relatives who stay at home or by paid
child care providers. On average, child care teachers eam just over $12,000 per year, in-
home providers about $9,500 and unregulated providers just $5,000. It's a sad state of
affairs when we pay the garage attendant who parks our car more than the person who
cares for our children.
The President's initiative this week is a major step toward turning the situation
around by helping working families pay for child care, improving the safety and quality
of care, promoting early learning, and building the supply of good after-school programs.
No program can stop any of us from worrying about our children. After all, that's
what parents do. What it offers is a helping hand to parents, educators, community, state,
FROM : Beach House
PHONE NO. : 3019510340
Jan. 06 1998 03:22PM P5
- 4
and federal authorities working together to provide safe, nurturing and stimulating care
for our children in the most important learning years of their lives.
(861 words)
The White House
National Economic Council
To:
Peera
Phone:
Fax: 628.78
From: Check
Phone: (202) 456-6630 Fax: (202) 456-2223
Pages including cover sheet:
Comments:
167 P01/05 DEC 02 '97 14:28
F12/2/97
December 2, 1997
DRAFT
COST ESTIMATE FOR FMLA OPTIONS
1. PAID LEAVE FOR 6 WEEKS OF NEWBORN/ADOPTION/FOSTER CARE
Objective: Cost for a maximum of 6 weeks maternity or child care benefit (i.e.,
federal income replacement) at $200 a week for mothers or fathers with
workforce attachment. (See first column of attached table.)
a. Number of women1 with newborns In a given year: 3,378,000 [from 1996 CPS]
Excludes some adoptions/foster care.
Maximum program cost for all newborn providers: 3,378,000 X $1200 =
$4,053,600,000.
b. Assume that 1,834,000 mothers will return to work. [Based on 54.3% LFPR of all
women with youngest child less than 1 year old.]
This is a proxy for working women who give birth and would be eligible for this
benefit. Note that this number does not include those that worked prior to giving
birth but (without this new incentive) did not return to work within a year.
C. Assume maximum 33% will be ineligible for benefit because they did not work full-
time previous year. [Per February 1996 tenure data for 16-44 year old women.]
Lots of potential bias problems here. Younger women more likely to give birth and
less likely to be attached. However, the tenure data is not just for those employed,
but for those employed with their current employer for a year. (Work experience
data does not have this problem. It could be examined at a later date.) The 1.8
million women who returned to work are more likely than most to have been
previously attached to the workforce (because returned early, likely to have health
benefits attached to job and wouldn't want to quit during a pregnancy, etc).
Therefore, it may also be useful to assume a lower percent being ineligible - 20%
has been arbitrarily chosen for this purpose.
Using these bounds implies there would be between 1,228,780 and 1,467,200
potential leave takers who would pass the workforce attachment requirement.
d. Without means testing, this implies a cost of between $1,474,536,000 and
$1,760,640,000 (at $200 X 6 weeks = $1200 for each mother). These costs are
for benefits only, i.e., without program/administrative costs.
e. How many of these women would meet an income eligibility cut? (The test would
be on family income, not the income of the leave taker.)
1
The number of women/mothers is used to estimate costs because only one parent of a newborn
would be eligible for paid leave and women/mothers are more likely to take leave than men/fathers.
167 P02/05 DEC 02 '97 14:28
2
Median income for primary families with children under 3 is $36,626. If the
population was ½ below and ½ above, then the cost would be half - between
$737,268,000 and $880,320,000. However, the actual cost is likely higher since
most of the women who would be in the workforce full-time for at least a year
would be over this mean (i.e., the lower part of the distribution would be cut off
by the workforce attachment criterion).
See the table for costs at family income thresholds of $50,000 and $60,000.
f. To the extent that families would choose to use their firms' paid leave over the
$200 a week benefit provided by the government (they need to use the federal
benefit first or forfeit it), this would reduce the number of users and, therefore,
costs. However, this reduction may not be significant (and cannot be reliably
estimated).
Only a very small number of employees receive paid family leave (2 to 3%),
although most receive paid vacation (88 to 97%) and paid sick leave (50 to 65%)
that could be used during the first six weeks after having a child. (Mothers would
likely be the only ones who could use paid sick leave.) The number who choose
paid company leave over federal wage replacement would be reduced by the
percent that would be allowed to take off enough leave (i.e. those covered and
eligible for FMLA) to use the reduced federal benefit first and then use company
provided paid leave. (Note that since many low income women are disqualified
by the workforce attachment test, those that are least likely to be eligible for
extended leave are also eliminated.)
However, data from the 1995 survey by the Commission on Family and Medical
Leave would indicate that a good portion of mothers and fathers do not receive
sufficient paid leave from their companies and thus would likely take advantage
of the federal leave program. About 65% of all child care "leave needers" (as
defined and surveyed by the Commission) say the reason for not taking leave is
that they can not afford to do so. Yet, for those covered by the FMLA, the
Commission reports 46% get fully paid child care leave (23% get partially paid
leave); for those not working at covered worksites, the percent getting paid leave
drops to 37% (16% get partially paid leave). 2
g. Related to the discussion above is the possibility that some eligible mothers/
fathers will not take time off to care for newbom/adopted/foster child. Based on
data from the Commission (the percent "leave takers" who took leave to care for a
child as a percent of "leave takers" plus "leave needers"), it was estimated
2
Of interest is the Commission finding that of all low-income leave takers, 21% are receiving
public assistance.
167
3
11% would not use the leave (or 89% of eligible workers would). This assumes the
provision of a partial wage replacement will have no effect on the behavior of the
11%. See columns 3 and 4 of attached table.
h. Based on data from the Commission (T. 5E), weighted averages were constructed
for the number of weeks "leave takers" at non-covered worksites take off to care for
newbom/adopted/foster children. The upper bound is 6.1 weeks (same as maxi-
mum allowable) and the lower bound is 4.2 weeks. See columns 2 and 4 of
attached table for cost estimates which assume an average leave of 4 weeks.
1. For all of these variations, ETA estimates administrative costs would be about $162
to $193 million per year. In addition, there would be startup costs of approximately
$113 million (to change the UI base period and to create a benefit payment
system).
Bottom line: Under these assumptions, total costs (administrative and benefit) would
range from around $600 million if the higher ineligibility rate is assumed and the
benefits were used for four weeks by parents who met the 1 year work-force attachment
and $36,626 family income tests -- to almost $2 billion if there was no income test, all
eligible parents took the full 6 weeks, and the lower 20% ineligibility rate is used.
These costs do not include the estimated $113 million for start-up.
Note: This estimate is very suspect. Mixed and matched data sources of various years
which do not neatly correspond to the proposed groupings have been used. In total, It
is unclear to the direction or size of these biases.
2. EXPAND FMLA LEAVE PERIOD FROM THREE TO SIX MONTHS
No benefit cost Involved.
This proposal extends the maximum benefit received under FMLA. All covered and
eligible individuals could potentially benefit from such an expansion. The size of the
group that is likely to benefit can be estimated from looking at the FMLA employee
survey leave takers who took more than 12 weeks of leave. Most likely to benefit would
be the 10% - 20% of leave takers who took more than 12 weeks of leave (according to
data from the 1995 survey by the Commission on Family and Medical Leave). The
Commission estimated that between 1 and 2 million took FMLA during their survey
period -- thus the number of "long leave" takers is estimated at 100,000 to 400,000 a
year.
3. LOWER FMLA'S 50-EMPLOYEE COVERAGE THRESHOLD
No benefit cost involved.
167 P04/05 DEC 02 '97 14:28
4
If one assumes a 83% eligibility rate and decreases the threshold to firms 25 and larger
(see note below), than this would increase the number of employees covered and
ellgible by about 10 million. BLS has provided information to NEC on the impact of
thresholds between 25 and 50.
Note the source is ES 202 data, whose estimates would not include employees covered
by FMLA who work in establishments with less than 25 employees but within 75 miles
of other establishments owned by the same firm that in total employ more than 25
workers.
4. USE THE UI PROGRAM TO PROVIDE PARTIAL WAGE REPLACEMENT
It is not known how many states would amend their laws under either of these two UI
options. Therefore, the number of potential recipients is unknown. In any event, the
maximum pool of recipients will range from 1.2 to 1.5 million. (See discussion 1a. to
1d. above.)
FMLA PAID LEAVE OPTION: COST ESTIMATES
(1)
(2)
(3)
(4)
all take 6 wks
all take 4 wks*
89% lake 6 wks
89% take 4 wks
Assumptions
Number of women w/newborns
3,378,000
3,378,000
3,378,000
3,378,00(
Est. of women in workforce giving birth
1,634,000
1,834,000
1,834,000
1,834,00(
(54.3% LFPR of all women w/youngest
child less 1 year old)
Less those not meeting workforce attachment requirement
a. 33% ineligible
1,228,780
1,228,780
1,228,780
1,228,780
b. 20% inelibible
1,467,200
1,467,200
1,467,200
1,467,200
Less those not taking leave (columns (3) and (4))
a. 33% inaligible
1,228,780
1,228,780
1,093,614
1,093,614
b. 20% inelibible
1,467,200
1,467,200
1,305,808
1,305,808
Eligibility thresholds for family Income and workforce attachment
a. 33% ineligible
1. $36,626 (median income of primary familles w/child < age 3)
$737,268,000
$491,512,000
$656,168,520
$437,445,680
2. $50,000 (62.6% of families with children < age 6 earn less)
$923,059,536
$615,373,024
$821,522,987
$547,681,991
3. $60,000 (71.8% of families with children < age 6 earn less)
$1,058,716,848
$705,811,232
$942,257,995
$628,171,996
4. no income threshold
$1,474,536,000
$983,024,000
$1,312,337,040
$874,891,360
b. 20% ineligible
1. $36,626 (median income of primary families w/child < age 3)
$880,320,000
$586,880,000
$783,484,800
$522,323,200
2. $50,000 (62.6% of families with children < age 6 earn less)
$1,102,160,640
$734,773,760
$980,922,970
$653,948,646
3. $60,000 (71.8% of families with children < age 6 earn less)
$1,264,139,520
$842,759,680
$1,125,084,173
$750,056,115
4. no income threshold
$1,760,640,000
$1,173,760,000
$1,566,969,600
$1,044,646,400
ADD'L ADMINISTRATIVE COSTS
1st year (start-up + change in base yr)
$113 million
$113 million
$113 million
$113 million
annual operating costs
$162-193 million
$162-193 million
$162-193 million
$162-193 million
data from FMLA Commission L 5E leave takers at non-covered worksiles; care for newborn, etc.
upper bound: (.371*1 wk) + (.092 2 wk) + (.109 * 4 wk) + (.429 12 wk) = 6.139
weeks
lower bound: (.371*1 wk) + (.092 * 2 wk) + (.109 * 3 wk) + (.229* 4 wk) + (.2 12 wk) = 4.198 weeks
** data from FMLA Commission: total leave takers for care of newpom/adopled/foste as percent of leave takers + leave needers
167 P05/05 DEC 02 '97 14:29
12/02/97
113 P02
NOV 28 '97 12:54
DRAFT
+11/26/97
DRAFT 3:20 11/26/97
PROPOSALS TO ASSIST PARENTS OF
NEWLY BORN OR ADOPTED INFANTS
1. Expand FMLA Leave Period From Three to Six Months
Under current law, private employers of 50 or more employees must provide up to 12
workweeks of unpaid, job-protected leave a year to "eligible" employees for qualifying
family and medical reasons, including care of a newborn, newly adopted child, or newly
placed foster child. Employees are "eligible" if they have worked for the employer for at
least 12 months and for at least 1,250 hours over the previous 12 months, and if the
employer has at least 50 employees working within 75 miles of the employee's worksite.
Expanding the law in this way would allow the approximately 12 million workers who
take leave in a given year to take a longer period of FMLA protected leave if they need it.
About 100,000 to 400,000 leave takers who use the maximum amount of time (85 plus
days in the survey by the Family and Medical Leave Commission) would be most likely
need to take extra time off.
Pros: - Guaranteeing FMLA covered and eligible working parents up to six
month of job-protected leave would give them additional time to bond
with their newborns and to make adequate child care arrangements for
when they return to work.
- Such an expansion of FMLA would benefit all covered and eligible
workers, not just new parents.
Cons: - This will not help workers who currently cannot afford to take even the
full 12 weeks of job-protected leave. According to the Commission's
survey, about 65 percent of those who wanted to take leave to care for
their newborn, foster or adopted child said they did not take leave because
they could not afford to do so.
- This would do nothing to help parents who are not now FMLA covered
and eligible. According to the Commission, about one-half of workers are
not covered and eligible for FMILA leave. (The number of covered and
eligible parents is likely lower because younger workers have shorter
average job tenure.)
113 P03
NOV 28 '97 12:55
DRAFT
2. Lower FMLA's 50-employee Coverage Threshold
Under current law, private sector employers are not covered by the FMLA unless they
employ 50 or more employees during 20 or more calendar workweeks in either the
current or preceding calendar year. (Public agencies are covered by FMLA regardless of
size -- but employees must still meet the eligibility requirements, including working at a
worksite where 50 employees are employed within 75 miles.)
The employee coverage threshold could be dropped from 50 to 25, or to some point
between those numbers, and could be accomplished in one step or several. Another
approach would be to drop it to some point between 50 and 25, and establish a
commission to study the impact and recommend whether a further lowering of the
threshold would be warranted.
The best approach would be to drop the threshold immediately to 25, in conjunction with
a paid-leave plan (see separate paper).
Pros: - Accomplishes two goals: giving more people FMLA protections, and
providing partial-wage replacement for new parents, including those still
not protected by FMLA.
Cons: - Likely to meet with strong opposition.
- To the extent we might be able to win support for one but not both
proposals, combining expansion and a paid-leave proposals could unite in
opposition those who might agree with one of the options but oppose the
other.
3. Use the Unemployment Insurance (UI) Program to Provide
Partial Wage Replacement for New Parents
Option 1: Encourage States to amend their UI laws to permit payment of benefits to
individuals who leave their jobs for compelling personal reasons, such as adoption of an
infant, after the individual rejoins the labor force and is able and available for work. The
laws of 14 States (AK, CA, HI, NB, NV, NY, OR, PA, PR, RI, SC, UT, VA, VI)
currently recognize some compelling personal reasons for leaving work. However, none
of these laws specifically reference leaving work for reasons connected to family or
medical leave.
Pros: -States should recognize compelling personal reasons for leaving work in
order to modernize the UI program to reflect current work realities.
- Expands participation rates in the UI program, thus increasing its ability
to provide wage replacement to workers while they are unemployed as
Lowering FMLA Threshold:
To 40:
Adds about 3.4 million people to covered and eligible
To35:
Adds about 5.4 million
To 25:
Adds about 10 million
Currently - 67 million are covered and eligible
A Workable Balance
96
women are more likely than men to take most kinds of family leave. On the other
hand, when men and women take leave, they take comparable amounts of paren-
tal leave, and men take more leave to care for a seriously ill spouse - some of which
may be care of their wife before or after childbirth.
D. Length of Leave
The Family and Medical Leave Act allows for unpaid leave of up to 12 weeks. The
great majority of all leave falls within the 12-week period established by the Act.⁷
FIGURE 5. 3
Leave-Takers at FMLA-Covered and Non-Covered
Worksites, by Length of Leave
50%
44.6%
45%
FMLA-
Covered
40.8%
40%
Non-
35%
Covered
30%
25%
21.6%
20%
19.1%
6.8%
15%
13.6%
14.6%
12.5%
10%
8.9%
9.1%
5%
0%
1-7 DAYS
8-14 DAYS
15-28 DAYS
29-84 DAYS
85 DAYS
SOURCE: AGUIRRE INTERNATIONAL TABULATION OF DATA FROM INSTITUTE FOR SOCIAL RESEARCH, SURVEY RESEARCH CENTER; UNIVERSITY OF MICHIGAN, SURVEY OF EMPLOYEES, 1995.
7
It should be noted that it is impossible to interpret precisely what employees mean when they report a
certain number of days of leave-taking. Some employees may think of o weeks leave in terms of seven
days, while others may think of five days (the work week) as a weeks leave. For the purposes of this report,
84 days (12 times seven days) means 12 weeks of leave.
Employers' and Employees' Experiences with Leave Since Enactment of the FMLA
The median length of leave for all leave-takers was ten days, with a mean of 37
97
days. Ten percent of leave-takers were on leave for one to three days; 75 percent
were off the job for fewer than 35 days.8
As shown in Figure 5.3, leave taken by workers in non-covered worksites has a
different distribution than that taken by workers at covered worksites. For ex-
ample, 30.5 percent of leave-takers at covered worksites were off the job for some-
where between two weeks (15 days) and 12 weeks (84 days), compared with 23.7
percent of leave-takers at non-covered worksites. In addition, periods of leave
that lasted more than 12 weeks were taken by 12.5 percent of employees at cov-
ered worksites and 19.1 percent of employees at non-covered worksites.
There are some noteworthy differences in length of leave associated with different
reasons for leave (see Appendix E, Tables 5.D and 5.E). Of those taking leave for
their own serious health problem (excluding maternity-disability), about 51.6 per-
cent of covered employees were on leave for 14 days or fewer, while 53.8 percent of
non-covered employees were on leave for 14 days or fewer. Only 13.6 percent of
covered employees and 20.4 percent of non-covered employees took leave for their
own serious health condition that lasted longer than 12 weeks.
Maternity-disability leave, which represents only four to seven percent of all leave
taken, tends to be longer. For employees in covered worksites, over 40 percent of
such leaves last more than 12 weeks (85 days or more), and for employees at non-
covered worksites about 45 percent of leave lasts more than 12 weeks (85 days or
more). This type of leave may cover some time before the birth of a child, as well
as post-partum recovery. Most leave to care for newborns is less than 12 weeks,
with a significant proportion less than one week. Approximately half of both
covered and non-covered employees who took leave to care for a newborn were-off
the job for less than a month (28 days), and more than one-third of non-covered
employees took seven days or fewer (37.1 percent).
Most family leave to care for a seriously ill child, spouse, or parent lasts 14 days or
fewer. For example, 90 percent of covered and non-covered employees take 14
days or fewer to care for seriously ill children, as did 80 percent of leave-takers who
are caring for seriously ill parents. Of employees who take leave to care for a
seriously ill spouse, around 80 percent of covered employees take leave that lasts
8 McGonagle el al., p. 19.
A Workable Balance
XVI
98
14 days or fewer, and almost 90 percent of non-covered employees take leave that
lasts fewer than 14 days.
The data also reveal some distinctive variations in length of leave among leave-
takers (see Appendix E, Table 5.F). Women, as noted above, take longer periods
of leave (with a median length of 15 days, and a mean of 41, as opposed to 10 days
and 33 days, respectively, for men). This is not surprising, given that only women
bear children, and that women are still more likely than men to be responsible for
most kinds of family care. Men, however, take longer periods of leave for their own
serious health conditions. Hourly (as opposed to salaried) workers, and by those
with relatively lower levels of education are more likely to take leave lasting over
28 days.
Length of leave does not appear to vary significantly by income level. However,
salaried employees are more likely to take shorter leave - up to seven days - (47.2
percent) compared with employees who are paid by the hour (39.5 percent).
In sum, most periods of leave are short. The majority of leave to care for a seri-
ously ill child, parent or spouse) lasts fewer than 14 days, as does roughly half of
leave taken to recover from one's own serious health condition. Parental leave
and maternity-disability leave lasts longer.
E. Employees Who Needed but Did Not Take Leave
According to the Employee Survey, 3.4 percent of employees said that they needed
leave for a reason covered by the FMLA, but did not take it. As noted above (see
Appendix E, Table 5.A), these leave-needers who did not take leave are especially
likely to be African American, to be hourly workers, to have one or more children,
to have low levels of family income and to have some college education, but less
than a four-year degree.
The leave-needers surveyed are most likely to need leave for their own serious
health condition or to care for a sick child, parent or spouse over 40 percent in
both categories (see Figure 5.4). Almost none of the workers in this sub-sample
needed, but did not take, maternity-disability leave. In addition, almost ten per-
cent of leave-needers report they wanted to take parental leave but did not. De-
spite demographic variations among leave-needers, it is not possible to link demo-
graphic variables on the particular patterns of need, given the small sub-sample
F11/20/97
DRAFT
DRAFT
DRAFT
DRAFT
11/26/97 3:00 PM
Paid-Leave Plan for the Birth or Adoption of a Newborn
Thanks to the Family Medical Leave Act, signed into law by President Clinton on
February 5, 1993, millions of Americans can take unpaid leave from their jobs (up to 12
weeks per year) to care for an infant after birth or adoption -- and know that a job will be
waiting for them when they return. But many of those workers are unable to take the full
amount of FMLA-protected time they need, because they simply can't afford to go that
long without a paycheck. And other workers who, although not protected by FMLA,
have access to unpaid leave can face the same dilemma.
To address this obstacle, the Administration could propose the creation of a New Parent
Paid Leave Plan, to provide eligible parents with partial wage replacement for up to six
weeks. While careful consideration needs to be given to the effect of such a program on
employer benefit plans, design elements of a workable program would include:
Income eligibility: Eligibility to receive funds would be tied to income. The simplest
approach would be to set a family income cap -- only parents with family earnings
below a set amount would be eligible to receive new-parent paid leave. An
alternative but more complicated approach would be to vary the benefit amount by
family income.
Pros: - Assists the families that are most likely to face a financial barrier to
taking family leave for a newborn/adopted infant.
- Limiting eligibility to workers protected by the FMLA would exclude
those most likely to benefit from such a program.
Workforce attachment:
1. Prior to receiving benefit: New parent paid leave would be available to those
qualifying parents who are authorized to work in the U.S. and have been in the
workforce -- part time or full time -- for each of the fifty-two weeks prior to
giving birth/adopting.
Pros: - Funds available to all working parents, regardless of FMLA coverage
- Links eligibility to connection to the workplace and to the concept of
wage replacement.
- One year requirement demonstrates pre-pregnancy workforce
participation.
- Minimum standard for amount of time in the workforce reflects FMLA
concept and excludes from eligibility those whose workforce
DRAFT
participation was minimal.
- If UI administers the program, they will have access to employment
information for all UI-covered workers
Cons: - If UI administers the program, an alternative method of confirming
eligibility would be necessary for non-UI covered workers (e.g., self-
employed, independent contractors, etc.) -- for example, proof of receipt
of wages during the time period. This would add cost to the proposal.
- If UI administers the program, it may be simpler if the eligibility
requirement is the same as for UI - work in roughly 20 of the preceding
52 weeks. (Note, however, that states have discretion to have additional
UI qualifying requirements.)
Note: If data indicates that workers most likely to need paid leave have
generally worked for less than one year, we should change the one-year
requirement as appropriate.
2. After receiving benefit: Workers could receive benefits regardless of whether
they intend to return to their job, or whether they in fact return.
Pros: - Eligibility based on return to employment or the workforce would
require a penalty/recovery scheme for those who -- for whatever reason
-- fail to return to work in a timely manner.
- Commission data indicates that lower income workers, the ones most
likely to need wage-replacement, are the least likely to return to work
following the birth or adoption of an infant.
Cons: - Parents who voluntarily leave their jobs to care for newborn/adopted
infants have presumably decided they are not financially dependent upon
their wage, and therefore do not need a wage replacement benefit. (The
lower any income requirement is set, the less this problem exists - fewer
eligible parents will be financially able to quit their job.)
Benefit duration and timing: Benefits would be available only for the first six weeks
following birth/adoption. A worker with access to employer-paid leave who also
wanted to participate in federal paid leave would have to use the federal benefit
before using employer-paid leave.
Pros: - Simpler to administer
- Minimizes disincentives on employers who might otherwise provide
benefits or more generous benefits.
DRAFT
Cons: - To the extent that an employer benefit plan limits post-pregnancy use of
sick leave to a period immediately following birth, female workers with
accumulated paid sick leave who give birth may not be able to use paid
sick leave after six weeks.
- May not cover time at home for newborn babies/mothers who have
extended hospital stays.
Administration/Implementation: The program would be administered, and the
benefits paid, through the state UI system. State participation would not be
mandatory.
Pros: - State employment security agencies (SESAs) have experience in making
payments as agents of the Federal government in the case of other
programs, such as Trade Readjustment Allowances. In FY 98 there are
about 40,000 TRA recipients collecting about $230M in benefits at an
administrative cost of about $5 M per year, which would provide an order
of magnitude in evaluating this proposal.
- States are able to perform these functions under agreement with a Federal
agency assuming suitable arrangements can be made to meet the cost of
administering this separate payment system.
Cons: - To the extent that SESAs are asked to make eligibility determinations that
differ from those under the UI system, staff training and administrative
costs would rise substantially.
- Since the costs of the benefits would be coming from a fund other than
the State trust fund (unless Federal law is amended), it may be expensive
for the States to establish the alternative procedures necessary to make
the payments.
- States are currently underfunded for UI administration costs and would
not be able to embark on a new program without some funding
guarantees.
Benefit amount: Simplest approach would be to set one benefit amount available to
all eligible workers: $200 per week (based on UI average benefit of $190.19, which
represents 35% of the average weekly wage). Alternatives could include having one
or two benefit levels, keyed to income ranges.
113 P08
NOV 28 '97 12:58
F11/26/97
DRAFT
POTENTIAL CHANGES FOR FMLA
ADD PAID LEAVE COVERAGE FOR 6 WEEKS OF NEWBORN CARE
Maximum number of women 3,378,000 with newborns in a given year (CPS)
Assume that 1,834,000 will return to work (LFPR of those with <1 year olds)
Assume between 20-33% will be ineligible (tenure data) [will be checking lower bound with
work experience data]
Using bounds implies between 1,467,200 and 1,228,780 would make tenure cut and may want
leave to take care of infant
Without means testing implies cost of (at $200x6weeks=1200 each mother) = $1,760,640,000
and $1,474,536,000 (w/o administrative costs)
How many of these women would meet an income eligibility cut?
Median income for families with children under 3 -- $36,626. If this was the cut off than 1/2 of
potential above would not qualify so cost would be half -- so between $880,320,000 and
2
$737,268,000.
Add administrative costs of approximately $200,000 ($60m to change UI base period and $140m
to add payment system to UI [no basis for this number]) and proposal costs out at $1B,
$66,000
all
city
EXTEND COVERAGE FROM 50 TO 25 PERSON ESTABLISHMENTS
assumes ehrish take
EXTEND BENEFITS FROM 12 WEEKS TO 26 WEEKS
full
6 DOL whs bohing ct
((nemp Ins. system
6 wles