Paid Leave: Good for Health, Good for Business

Diana Swift

Disclosures

April 17, 2018

Lagging Behind in Providing Paid Leave

Access to timely medical treatment and appropriate follow-up are taken as givens for good health. But another increasingly recognized component in health is adequate paid leave from work for a medical necessity—to care for a newborn or recover from serious illness, for example. Adequate parental, medical, and family leave from work is an area where the United States falls well below global standards among wealthier countries. A recent report from the University of California Los Angeles (UCLA) concludes that generous paid parental, medical, and family leave for employees is not only crucial for the nation's health, but also translates to enhanced gender equality and lasting economic benefits, including reduced worker turnover and lower training costs for companies.

The report backs its arguments with evidence from a systematic review of 5500 studies on paid leave conducted in more than 30 high- and middle-income countries. Furthermore, the review showed that this social safety net is fiscally sustainable.

Paid Family Medical Leave: Healthier U.S. Families Within Our Reach, published last month by the WORLD Policy Analysis Center at the UCLA Fielding School of Public Health, comes 25 years after the Family and Medical Leave Act mandated up to 12 weeks of unpaid medical leave in workplaces of 50 people or more. The UCLA report, a collaboration between WORLD, the UCLA David Geffen School of Medicine, UCLA Mattel Children's Hospital, and McGill University in Montreal, Canada, calls for longer, more comprehensive, and well-funded leave entitlements and demonstrates their feasibility with evidence from the Organization for Economic Co-operation and Development (OECD).

Currently, about 85% of American civilian workers have no access to paid medical leave,[1] and many have no access even to unpaid leave. The United States is alone among the world's wealthy nations in not guaranteeing paid leave for new parents and for individuals and families battling illness, a distinction it shares with Lesotho and Papua New Guinea. The report's senior author, Jody Heymann, MD, PhD, a pediatrician, epidemiologist, and the Fielding School's dean, tells Medscape that "having a baby and taking personal sick leave or time off to care for a family member in the United States can come at a high price."

Nonexistent or minimal wage replacement imposes barriers to taking needed time off. Many workers, particularly women, cannot survive without steady income and fear that even unpaid leave could cost them their jobs.

The Health Imperative of Paid Family Leave

The foremost need, according to Heymann, is adequate paid leave to care for newborns, which translates down to the road to lasting dividends in both health and productivity. "For new parents, it improves maternal physical and mental health and recovery from delivery. It has a marked positive impact on infant morbidity, breastfeeding, and diarrheal and respiratory infections, and it promotes development in the critical first months," explained Heymann. Adequate leave facilitates exclusive breastfeeding, which can have significant health benefits by reducing rates of ear, respiratory, and gastrointestinal infections, and reducing risk for such chronic conditions as obesity, leukemia, and inflammatory bowel disease.[2]

Paid family leave is a safety net that permits workers to help seriously ill children and other relatives recover and allows sick employees to remain connected to the labor force for easier reentry. Clinicians treating workers with such long-recovery illnesses as cancer and heart disease should be very concerned about whether these patients will lose their jobs and land in poverty, Heymann continued. "Paid leave is fundamental to their healthy recovery, and every other high-income country has addressed this," she said. "Clinicians need to know that their patients won't leave the hospital without rent money and will be able to make it to all of their appointments."

Based on international evidence, the report makes the following fundamental recommendations:

  • A minimum of 3 months of leave for mothers of newborns or newly adopted children and, ideally, 6 months for enhanced health and economic benefits, as well as separate and equal leave for fathers to support maternal health, support the father's role in the family, and promote gender equality.

  • Three months of paid medical leave for personal illness and 6 months for treatment and recovery in the case of life-threatening conditions such as cancer and heart disease.

  • Inclusive legislation that addresses all types of families, with gender-neutral benefits for both families and individuals to ensure that single parents do not get only half the leave of married parents.

As proof of economic benefit, the review found that the proportion of household income earned by women across OECD countries increased with more than 24 weeks of paid parental leave, and more generous polices were associated with a lower risk for poverty, especially among single mothers.

Although some people may automatically think of Norway or Sweden when it comes to generous parental leave, 25 of 34 OECD countries offer at least 6 months of leave to new mothers, and 21 do so to fathers.[3] The United States and Mexico are the only OECD countries that do not guarantee at least 14 weeks of paid leave to mothers of infants. South Korea gives both parents a full year plus an additional 90 days of leave for the mother, and Japan supports 52 weeks or more. Furthermore, more than a dozen OECD countries have had 6-month paid parental leave policies for at least 20 years. Countries that ensure a minimum of 6 months of paid leave also had higher labor force participation rates, according to the UCLA report. In terms of personal medical leave, 28 of 34 OECD countries provide for at least 6 months of paid leave.

Medical Community Support for Paid Health-Related Leave

Not surprisingly, major US medical associations have long supported generous paid leave for health reasons and now include economic benefits in the equation. The American College of Obstetricians and Gynecologists (ACOG) 2016 position statement endorses at least 6 weeks of parental leave after birth or adoption at 100% of pay and benefits, and for physicians in particular, the incorporation of leave into standard benefits at medical training schools and organizations.

"Considering that there is no federal law guaranteeing comprehensive accommodations for pregnant and postpartum workers, and that benefits vary by state and change frequently, it is important to reinforce the fact that paid parental leave benefits the employer in decreasing worker turnover, increasing productivity, and encouraging the worker to return to the workplace," ACOG's chief executive officer, Hal C. Lawrence III, MD, told Medscape.

The American Academy of Family Physicians (AAFP) is currently finalizing a paid leave policy for probable approval this fall. "The social determinants of health are important factors in how people make decisions about healthcare and in the health outcomes of our patients," explained AAFP president-elect John Cullen, MD, a family practitioner in Valdez, Alaska. "Not being able to take time off from work leads to worse outcomes, so anything that improves that is going to have positive implications for patients." And as a small business operator himself, Cullen believes that it makes sense to invest in and retain experienced employees rather than retrain new ones.

Speaking on behalf of the American Academy of Pediatrics, Dipesh Navsaria, MD, a pediatrician based in Madison, Wisconsin, maintains that parental and family leave are "tremendously important to the well-being of children and families. In the first thousand days of life, it's critical for children to be around those who can provide responsive nurturing and supportive relationships," he said, adding that "there is clear and deep science around this in terms of effects on the wiring of the brain and the child's later development."

Business Community Views on Paid Leave

Some may counter that this safety net is too costly, especially for small firms, which, according to the National Federation of Independent Businesses (NFIB), bear a disproportionate share of the financial burden of leave plans, and this can lead to fewer jobs, explained NFIB spokesperson Stephanie Marrs in an email. However, that argument is not supported by the experience of OECD nations, some of which have long had these benefits in place for smaller businesses. "Only two of the countries studied allow very small businesses with fewer than five employees to opt out, and these countries cover leave through social insurance," Heymann said. "It's completely feasible, and the overwhelming majority of countries also cover the self-employed, which is increasingly important in the context of jobs like Uber or Lyft."

The key to affordability is a social security insurance program with costs borne by both workers and employers, and most of the countries have succeeded by implementing these. "It's not fair to ask businesses to pay [all benefits] directly to the employee," Heymann said. "The risk needs to shared, and that's what social insurance does."

And one way or another, society will end up paying for inadequate leave. As a 2016 Pew Center for Research Survey[4] found, 48% of lower-income respondents who took unpaid or partially paid parental leave went on public assistance in order to cover lost wages.

Encouragingly, both US political parties are putting forth proposals about paid family and medical leave—some more generous or stingier than others, said Heymann. "The approaches and length of time covered differ, and not all support equally essential leave for other important reasons, which is why it was crucial for us to gather evidence on what, how long, and how broad leave needs to be."

So far, six US jurisdictions (California, New Jersey, New York, Rhode Island, Washington, and the District of Columbia) have enacted legislation that is or will soon come into effect.[5]

By and large, US small businesses support paid leave,[6] but to some stakeholders—Patrick Connor, NFIB director for Washington State, for one—legislating this benefit is unfair and may be unaffordable for small firms. "Washington's small employers are already suffocating under an avalanche of new regulations and tax increases affecting nearly every aspect of their operations," he explained "This new state payroll tax to create a new entitlement program, administered by 150 new government employees, granting some workers 12-18 weeks of leave annually at the expense of all, simply makes an already difficult situation worse."

Many large US companies, however, now support robust leave programs. California-based tech giant Adobe Systems, for instance, is a powerful corporate advocate, supporting 26 weeks of parental leave (10 of these weeks at 100%) and 4 weeks for self- or family care. In a press conference, Adobe's vice president of global rewards, Rosemary Arriada-Keiper, pointed to the positive impact on the firm's worker retention rate, with 94% of 372 US employees on leave returning to the company. Nestlé USA offers primary caregivers up to 14 weeks of paid parental leave and an additional 12 weeks of unpaid leave following the birth or adoption of a newborn child.

For advocates of longer paid leave, easing the burden on families can only enhance the likelihood of children's long-term success and productivity. "Paid leave matters to all parents, irrespective of their socioeconomic circumstances," said Navsaria, who recently saw first-hand how the lack of adequate parental leave adversely affected a well-trained woman surgeon. "When people say the US can't afford these policies, I would argue that the United States can't afford not to have them. When we take care of our colleagues, we end up with a better workforce."

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