'There can be no true recovery' without paid leave, expert says: What the Build Back Better plan covers

"This is a long overdue and much needed policy."

Speaker of the House Nancy Pelosi, D-Calif., House Majority Leader Steny Hoyer, D-Md., right, and House Majority Whip Jim Clyburn, D-S.C., conduct a news conference on plans to move forward with the Build Back Better Act and the infrastructure bill in the U.S. Capitol on Friday, November 5, 2021.
Tom Williams | CQ-Roll Call, Inc. | Getty Images

President Joe Biden's $1.75 trillion Build Back Better plan could clear the House this week, and the social spending bill contains a long-awaited and much-debated provision for paid family and medical leave. Its inclusion wasn't a sure thing: During the months it took policymakers to negotiate the bill, the paid family leave provision declined from 12 weeks coverage to four, and was briefly cut altogether.

"This is a long overdue and much needed policy," says Vicki Shabo, a senior fellow at Washington-based, left-leaning think tank New America. "There can be no true [economic] recovery, no inclusive recovery, and no recovery that really builds with an eye towards the future without addressing the country's lack of paid family and medical leave."

Access to paid parental leave increases the likelihood that women will return to work after they take time off and lowers the risk of poverty, among other effects, according to UCLA's World Policy Analysis Center.

Of the more than 190 countries in the world, the United States is one of just six that does not offer some form of national paid leave, according to UCLA. And Americans are in favor of the policy: Almost three-quarters, 73%, support federal funding for paid family and medical leave, according to CBS news polling.

Here's what's in the Build Back Better proposal, and how it could change the landscape of paid family and medical leave in America.

Lowest wage workers could get up to 90% of wages replaced

The latest version of the Build Back Better plan covers three types of leave. It enables workers to take time off on account of their "own illness, to care for a loved one with a serious illness, and for parental leave after the birth or adoption of a child," says Chantel Boyens, principal policy associate at the left-leaning Urban Institute.

Under the latest version, the Build Back Better plan offers four weeks, or 20 working days, of paid leave to all workers, including the self-employed. To be eligible, workers would need to have made at least $2,000 in earnings from work in the eight quarters prior to when the leave begins. They would apply with the Social Security Administration, which would be responsible for the program.

How much a worker receives depends on how much they earn, with the lowest wage workers getting up to 90% of their wages replaced. "Then the wage replacement comes down on a sliding scale from there so that higher wage workers get a lower share of their wages," says Shabo. "And the benefit would cap out at about $814 a week or $3,300 a month, roughly."

Assuming the bill passes, the paid leave program would start in 2024.

23% of private industry workers have access to paid family leave

Depending on where they work, some U.S. employees already have access to the kind of leave the policy covers. As things stand, 23% of private industry workers currently have access to paid family leave, according to the Bureau of Labor Statistics.

Even within that group, coverage varies widely, with policies more likely to cover higher earners and workers in particular industries. Just 12% of workers whose wages fall in the bottom quartile have access to paid family leave, compared to 37% of workers whose wages fall in the top quartile.

"The people who will be disproportionately helped by [the Build Back Better plan] are those who do not have access to paid family and medical leave through their jobs," says Shabo. "Those are disproportionately lower wage workers, workers of color, single parents, women who often need a longer period of leave than men."

Where your federal taxes are spent

Video by David Fang

Without access to paid leave through an employer, workers currently have limited aid from the government. The Family and Medical Leave Act, passed in 1993, currently gives eligible employees up to 12 weeks of unpaid leave per year for reasons such as the birth of a child, adoption, to care for an immediate family member, or for medical reasons like a serious health condition. They are entitled to return to their jobs after the leave.

As of October 2020, the Federal Employee Paid Leave Act made 12 weeks of paid parental leave available to some federal employees.

Nine states and the District of Columbia have their own paid family leave policies.

Fraud 'has never been shown to be a problem'

Critics of the provision have expressed concern that putting paid family and medical leave in the hands of the government could lead to fraud and make private employers' policies less generous. "I think there's going to be a lot of fraud in the program because the definitions [of caregiving] are so broad," says Angela Rachidi, senior fellow at the right-leaning American Enterprise Institute. "It's very hard to adjudicate some of these claims."

Fraud "has never been shown to be a problem in the state programs," Shabo counters, adding that "there are very, very, very low even suspicions of fraud among employers in states. We're talking like 1% or 2%."

The people who will be disproportionately helped by this policy are those who do not have access to paid family and medical leave through their jobs.
Vicki Shabo
Senior fellow, New America

Another concern is that the legislation could "result in potentially worse policies for people who already have access to paid family leave," says Rachel Greszler, a research fellow at the right-leaning Heritage Foundation. Employers offering more generous programs could abandon theirs, she says, and instead offer the four weeks the federal government provides.

Boyens thinks employers will retain generous leave policies. "Those employers who are providing those benefits, they're doing it because they're competing for labor," she says. The workers they're after have access to robust benefits already, and they'll be less likely to attract them if they don't offer those as well. "I do think that some employers will see that [new federal program] as an opportunity to provide more generous benefits that make them more competitive," she says.

"I think the biggest hurdles at this point are just seeing whether or not it stays in the package," says Boyens. "That seems to be the biggest hurdle."

More from Grow: