Lack of awareness among immigrants and low-income workers has prevented them from tapping into California’s Paid Family Leave program, even though they would be the most likely to benefit from it, according to a new report.
The study found that Latinos were the least likely to participate in the state program that offers paid leave, amounting to 55 percent of their salary for up to six weeks, when employees take time off to care for a new child or a sick family member. The program, which began in 2004, is completely funded by employees through a payroll tax. Workers who pay payroll taxes are covered under the state’s disability insurance program and those that request time off for caregiving are eligible to apply for paid family leave.
According to the report, only 35 percent of Latinos in the 500-strong sample knew about the program compared to 54 percent of white employees.
Even though all eligible Californians would benefit from the program, low-income workers, many of whom do not receive benefits, would see the biggest gains, says report co-author Ruth Milkman, professor of sociology at the University of California, Los Angeles and the City University of New York. She added that nearly 60 percent of low-income workers in the survey did not get any pay while on leave. Others in the low-wage bracket got less than half of their pay when the employers opted to give paid leave.
“But among those who used Paid Family Leave, over 80 percent got more than half their pay,” Milkman said.
California’s program, the first of only two state programs in the country, provides coverage to everyone in the private sector, including the self-employed. But nearly one-third of those who are eligible have not made use of it, citing that the percentage of payment was too low. This was especially problematic for low-income workers. The maximum payment is capped at $987 per week.
“The replacement rate makes a huge difference to low-income workers,” Milkman said. The survey recommends increasing the salary paid back to workers from 55 percent to 66 percent.
Overall, workers who used the program got longer leave and were more likely to return to the same job. They were also able to provide higher quality care for newborns or an ill family member due to their uninterrupted income.
In California, new parents can tap into Paid Family Leave to partially cover time off to care for a newborn infant.
“The average breastfeeding time has doubled for all new mothers who applied for the paid leave program, from five to 11 weeks for mothers in high-quality jobs and from five to nine weeks for those in low-quality jobs,” Milkman said. “This is a significant health benefit for newborns.”
Only nine percent of businesses surveyed said they saw cost savings from participating in the program. Study co-author Eileen Appelbaum, an economist at the Center for Economic and Policy Research in Washington, D.C., says that’s positive news, given that the program was initially “denounced as a job killer.”
“We feel that the savings are larger than those reported,” Appelbaum said.
Despite the lackluster response by business, she says, more than 60 percent of businesses are coordinating their own benefits with the state program. Overall, 90 percent of employers say coordinating coverage with the Paid Family Leave program boosted worker morale, productivity and the bottom line. Smaller businesses, with fewer than 100 employees, reported the most cost savings and outcomes, Appelbaum said.
While there are benefits to both employers and employees, however, enrollment in the program has been lower than expected. One reason, Milkman said, is that workers feared negative repercussions in the workplace. About one-third said they feared getting fired if they enrolled in the program.