NCPA - National Center for Policy Analysis

Family Care Leave Proposal Would Be Costly -- And Abused

December 2, 1999

Building on the Family and Medical Leave Act of 1993 -- which forces employers to let workers off without pay for up to 12 weeks a year for personal reasons -- President Clinton now proposes to expand it to let workers collect income for leave taken for family-care reasons. State unemployment insurance programs would fund the payments.

Analysts say it's a lousy idea. They warn that it will cost billions of dollars, drive up prices and is subject to abuse.

  • The Employment Policy Foundation calculates it could cost the unemployment system as much as $128 billion a year.
  • That's if every person on FMLA leave -- not just new parents -- received benefits for the full 26 weeks that unemployment payments are payable.
  • If restricted to new parents for 26 weeks, the cost would be $31 billion a year.
  • The Coalition for Employment Security Financing Reform says unemployment taxes could swell by 700 percent because of the drain from paying for leave.

Costs would eventually be passed along to consumers in the form of higher prices. Employees would earn less because the employer's share of payroll taxes is taken out of workers' potential wages.

As for the abuse factor, two years ago the courts let a woman take unpaid leave because she had an ingrown toenail.

Then there is the disruption to workplace schedules. One study by AT&T revealed that on any given day, between 10 percent and 15 percent of its workforce was out on FMLA leave.

Source: Editorial, "Taking Leave of Common Sense," Investor's Business Daily, December 2, 1999.

 

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