For many Americans, paid family leave sounds like one of those rare issues with an obvious answer. Who wouldn’t want new parents to have more time with their baby, or workers to be able to care for a sick family member without worrying about their paycheck?
But just because we all recognize that people need paid time off from work, doesn’t mean that Washington lawmakers should create another government program to provide it. The reality is that government paid-leave programs create as many problems as they solve.
Consider the states that have adopted government paid-leave programs. California workers, for example, lose 1.3% of their wages to a payroll tax to support the leave program. Washington state workers pay 1.13%. That may not sound like much, but for families living paycheck to paycheck, every deduction matters, and those taxes hit every single paycheck, every single year, regardless of whether you take leave. That’s money that can’t go toward groceries, rent, child care, or building the emergency savings that help families weather life’s biggest transitions.
Government paid-leave programs can also result in workers having less generous benefit programs and less true flexibility than before. That’s an important point to remember: when it comes to paid leave benefits, Americans aren’t starting from scratch. More than 80% of private-sector workers already receive paid sick leave, paid holidays, or paid vacation through their employers. Nearly 30% have specific family leave benefits.
While these numbers confirm that a large segment of workers could use more paid time off, particularly for family events like the birth of a child, they should caution against disrupting the benefits already in place. If the federal government were to create a payroll tax-funded leave program, companies would have an incentive to opt into it and stop providing the leave packages they currently offer. For many employers — including the nonprofit I work for — this would mean a less generous benefit at least for the first several weeks. Moreover, rather than working with your own company’s HR department, the leave-taking employee would face a government bureaucracy, which would likely mean unpleasant delays and paperwork burdens, and a lack of ability to stagger a return to employment or customize benefits.
Recognizing the problems with a one-size-fits-all government entitlement program doesn’t mean that nothing can or should be done to help workers who lack sufficient paid leave benefits.
Congress can start by reforming outdated labor laws, specifically the Fair Labor Standards Act, so that hourly workers can opt to receive paid time off, rather than collecting overtime pay. Government workers have long enjoyed this option: Rather than getting paid time-and-a-half for every hour worked overtime, they can earn an extra hour-and-a-half of paid leave. Proposed legislation — the Working Families Flexibility Act — would extend this voluntary option to private-sector employees, allowing workers to choose compensatory time off in place of overtime pay. This would cost the government nothing but would be an important way to help some of the most vulnerable workers in our country have access to paid time off.
Policy leaders should also find ways to make existing safety net programs more flexible rather than larger. All workers pay into the Social Security program from their very first day on the job. Policymakers could allow workers to access a small share of the retirement benefits they have already earned to provide financial support following the birth of a child. Workers who take this family leave option would then have to wait a few months longer to be eligible for full retirement benefits. That way, this new benefit option would be budget-neutral, not require any new taxes or new government mandate, and would limit its impact on existing leave programs. You can learn more about this and other approaches to expanding paid leave in this report from Independent Women.
It’s important to find ways to help families that need to take time off from work. Yet it’s also important to remember that the best way to help families is a robust job market — with plentiful, diverse employment opportunities. That means policymakers should preserve independent contracting and part-time work, and embrace policies, such as tax cuts, that let workers keep more of what they earn and that preserve true workplace flexibility.
The goal shouldn’t simply be more paid leave. It should be more choices for the people who know their own needs better than Washington ever will.
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This is part of a series of op-eds based on Independent Women’s new report, “Flourishing Families: An Agenda to Help Families Thrive.” The report, found here, details ways to support families without direct government subsidies or radically distorting the tax code to redistribute resources to families.
Carrie Lukas is the president of Independent Women. Follow her on X at @carrielukas.
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