It was a quiet, Sunday morning. I was sitting with my son in his playroom when my dad called me. I answered the phone with a casual greeting, but I was met, surprisingly, with panic. My 70-year-old dad, who lived six hours away in another state, was calling to tell me that he was being evicted from his apartment for an inability to care for himself and his home. He had 15 days to leave, at which point he would become homeless.
This was the moment that I became a caregiver.
The next two weeks were filled with non-stop phone calls, online research, consultations with attorneys, and family meetings. I dove head-first into a crash course on Medicaid, long-term care facilities, skilled nursing, and trusts. This acute crisis left very little time for my job, my family or myself.
Little did I know that that first phone call would be foreshadowing the next twelve months. After moving my father into a nursing home near my house, I became the go-to person for everything – attending doctors’ appointments, buying extra groceries, managing his bills. To handle this new responsibility, I was forced to cut my hours significantly at work, and my income took a major blow because of it. My husband and I were fortunate to not dip into our savings, but our circumstances were not sustainable long-term.
Unfortunately, my story isn’t unique. It’s one of the more than 53 million caregiver stories across the U.S., and many have far worse outcomes. Currently, only 16% of Americans with private-sector jobs get paid leave through their employer. Not surprisingly, most of them work for Fortune 500s. And women, in particular, are 20% more likely to quit their jobs after having a baby when they don’t have access to paid leave. It’s no surprise that U.S. caregivers are losing up to 26% of their incomes on average every year.
As caregivers become the next protected class, both local towns and states across the country are finding ways to rise to these challenges. In fact, more states each year are putting their own paid family and medical leave (FMLA) programs in place, and the pressure is mounting to have a policy at the federal level. President Biden has been pushing to pass his federal, paid FMLA program since 2019, which would allow employees that meet specific requirements to take up to 12 weeks of paid leave to care for themselves or certain family members in need.
Paid Family and Medical Leave Act (FMLA) is positioned as a benefit to both employees and employers, increasing worker retention, productivity and loyalty, while also allowing smaller businesses to compete more fairly with larger companies. But like any new legislation, it doesn’t come without its complexities.
After spending years as a patient advocate, a family caregiver, and now a caregiver employee benefits professional, I decided to speak with Teri Weber, Senior Vice President at Spring Consulting Group, an employee benefits and risk management consultancy, about the impact Biden’s paid FMLA would have on employers and how they can best prepare if the legislation passes. Teri refers to the challenges as the “three Cs” – cost, compliance, and culture and spends much of her time helping employers navigate these complexities.
While some states and jurisdictions are funding paid leave programs through payroll taxes with joint contributions from both employers and employees, Biden is proposing to fund his program by increasing taxes of the top one percent of American earners, raising their federal income tax rate from 37.0 percent to 39.6 percent. While on the surface, this sounds like good news to employers, it’s not that simple. Weber explained that having a federal program will add another layer of cost since paid leave will become available to a significantly larger portion of the workforce.
Employers should expect that there will likely be an increase in both the number of individuals taking leave and the length of time employees will be out. While this is great news for caregivers, who can now spend a more adequate amount of time with their loved ones, it also means employers need to be able to accommodate and scale for more replacement staff, additional management of these workers, and the benefits allocated to both the employees on leave and their replacement hires.
Biden’s paid FMLA proposal, if passed, would also add complexity to an employers’ compliance regulations. Currently, the federal legislation does not include a safe harbor, which means employers would need to adhere to all jurisdictional requirements if Biden’s proposal passes. Biden’s proposal has yet to define how the federal plan will coordinate with other legislatively required programs. Weber explained that defining which plan would be primary and if the programs would allow for stacked time or offset benefits is critical. Details surrounding how eligible employees and employers are defined, covered family members, coordination between federal and state programs, stacked time and offset of benefit levels are what makes a seemingly simple program extremely complex to administer and remain compliant.
With yet another paid FMLA program in play, employers have to decide for themselves whether their own corporate leave policy will be the same for every employee or whether the employee’s leave is determined by their state of residency. Without a safe harbor in place, adding a federal program to the mix will likely result in even more legal consultation to remain in compliance.
While Biden’s proposal makes great strides toward more fair and equitable employee rights, the legislation itself still leaves a large portion of working caregivers in the dark. According to a recent Pew research study, one in five families in the U.S. live in multi-generational households, and that number is on the rise.
Biden’s proposal, similar to the unpaid FMLA program that is currently in place at the federal level, is not inclusive of employees needing to care for grandparents, siblings, or other extended family members. In addition, while serious illness is a common catalyst for caregiving, there are still many other socio-economic reasons why someone might need to take leave, like the rising cases of elder fraud or, in my case, my father’s housing crisis. Employers need to decide for themselves how inclusive they want their corporate leave policies to be and where they draw the lines.
It’s only a matter of time before federal paid leave is available to employees, which is certainly a step in the right direction for working caregivers, but the movement can’t stop there. Employees are looking to their employers for flexible and accommodating policies that are reflective of the personal challenges they face. And employers who rely on government FMLA as a roadmap for their own corporate policy won’t find themselves able to follow simpler compliance regulations any time soon. At the end of the day, there is no one-size-fits-all solution for this complex problem. The best solutions are customized at the organizational level. When employers are willing to take a deep look into their workforce demographics and the unique needs of their caregivers, only then can they build a family and medical leave policy that’s both compliant and inclusive.