While the future of the Build Back Better (BBB) Act continues to be under negotiation, one issue that continues to be of conversation is the components around paid family leave (PFL). Under the provisions passed in the House, BBB would provide four weeks of paid leave for reasons that currently align with the Family and Medical Leave Act and broaden the definition of family members. While some lawmakers have argued against this initiative, others think it should be longer.
However, while PFL is still being negotiated with policy makers, it has a growing number of champions in the business space – both big and small. That support is also continuing to grow. As we celebrate the resiliency and tenacity of America’s entrepreneurs during National Small Business Week, it is worth taking a moment to look at why and how a paid leave policy would positively impact small businesses.
“Paid leave is an effective and necessary tool for public health and for our economic security and growth—one our country should have had long before this pandemic began, and one we cannot recover without,” hundreds of New Yorkers, including business owners and leaders, declared in an open letter to Senate Majority Leader Chuck Schumer [D-NY].
Last month, the National Bureau of Economic Research published results from a survey of business owners with 10-99 employees in New York and New Jersey (both states have PFL programs). The study reported that support of paid family leave programs grew during the pandemic and almost 70% of small business owners were supportive by the fall of 2020.
“Contrary to some commonly-cited rhetoric, small employers in states with PFL programs are actually quite supportive of PFL, suggesting that concerns about negative impacts on such firms should not be an impediment to enacting PFL programs,” the authors wrote.
Why are business owners becoming more supportive? Like all of us, they need a program that allows themselves and their employees to take paid leave to have and/or help with a new child, address a serious illness, or care for a loved one. This need became much more apparent during the pandemic, and recent surveys show employees are prioritizing paid leave in choosing where they work. A Deloitte poll of 1,000 Americans across the country found that 77% said the amount of parental leave offered could be a deciding factor in choosing one employer over another and half said they would take more parental leave time over a pay raise if given the choice.
“My company is small and we have to compete to attract the talent we need. We have to offer benefits that are meaningful to employees and treat them like whole people, because in order to keep people in West Virginia working, we have to be competitive in that way, and paid leave is a benefit that folks are looking for,” said Carling McManus, CEO of the 84 Agency, a public relations firm in Charleston, and Small Business for America’s Future (SBAF) small business council member.
There is no national program for PFL, but nine states and the District of Columbia have established PFL programs so many business owners are seeing and experiencing the benefits firsthand. In addition, larger businesses outside of those states are offering paid leave because they have the capacity to do so. For example, e-commerce company Etsy offers 26 weeks of fully paid parental leave and 12 weeks of paid family leave.
“Generous paid leave is good for business. It gives us the ability to ensure people from all backgrounds can come, stay, and thrive at Etsy,” said Etsy CEO Josh Silverman in a September letter to House and Senate leadership.
Many small businesses are not in a financial position to offer paid leave even if they would like to do so. A recent SBAF survey of small business owners found that 65% provide some form of leave but cost is the most cited barrier to providing paid leave and 71% say the federal government should have a role in establishing PFL. An AARP/S&P Global survey of 1,573 individuals found that 58% of caregivers report spending increased time caring for adults since the pandemic began and 61% of adults have increased child care responsibilities.
The bottom line is that paid family leave is helpful to businesses of all sizes and the American workforce. A 2021 Bipartisan Policy Center survey of Americans found that 79% do not have access to PFL and 37% of those unemployed would return to work sooner if their employer offered it, including 45% of unemployed caregivers.
Earlier this year, more than 300 businesses ranging from the film and television production company Bad Robot Productions to the personal styling company Stitch Fix sent a letter to U.S. House and Senate leadership urging that it be included in the BBB, stating:
“The pandemic has exposed an acute emergency on top of an ongoing, chronic crisis. At the onset of the pandemic, fewer than 21% of workers had access to paid leave through their employers. Lack of a national paid leave policy makes all of us more vulnerable during this pandemic and for future public health emergencies, while putting the financial stability of businesses on the line.”
Covid-19 has shaped a new way for us to reimagine work, our economy and build a more equitable economy. Many large companies have already taken the lead, having learned that PFL is a key tool in attracting talent. However, small businesses need a more level playing field. The past two years have shown the resiliency and vulnerability of our nation’s job creators — small businesses. As the NBER research shows, we can help strengthen them, by providing them with national investment into paid family leave.