Monday, February 29, 2016

My Thoughts on Hillary Clinton's Paid Family and Medical Leave Plan

In 1993, President Bill Clinton signed the Family and Medical Leave Act into law.  Wikipedia provides an accurate summary of the law as follows:
The Act allows eligible employees to take up to 12 work weeks of unpaid leave during any 12-month period to attend to the serious health condition of the employee, parent, spouse or child, or for pregnancy or care of a newborn child, or for adoption or foster care of a child. In order to be eligible for FMLA leave, an employee must have been at the business at least 12 months, and worked at least 1,250 hours over the past 12 months, and work at a location where the company employs 50 or more employees within 75 miles.
Now, Hillary Clinton wants to expand upon it by using taxpayer money to provide income to the employee while on leave.  The income will equal at least two-thirds of someones pay and will be paid for, predictably, by taxing the rich.  In justifying this paid leave plan, she says the following from her own website:
Today, the United States is the only developed nation in the world with no guaranteed paid leave of any kind. In fact, only 13 percent of American workers have access to paid family leave—with the lowest paid workers up to four times less likely to have access than the highest paid.
First, let me address  "with the lowest paid four times less likely to have access than the highest paid". Of course this is true.  Most higher paid employees, at any company, are salaried, and not usually subject to a loss of pay when taking time off.  But, also understand, salaried employees typically work more hours with no overtime pay; and from my experience as a senior manager, salaried personnel seem to be a less sick than hourly workers who have more to lose in pay.  Just an experienced observation.

Now to the issue of "no guaranteed paid leave of any kind".  This too is true to the extent that the government doesn't guarantee paid time off by law.   However, what Hillary conveniently forgets to tell you is that the majority of companies voluntarily provide various forms of paid leave for holidays, vacation, sickness, personal issues, funerals, jury duty, and military. And, yes, 15% of large companies provide paid family leave.  This, all according to the Bureau of Labor Statistics.

But, here's my problem with 12 weeks of "paid" Family and Medical Leave.

In 2007, the Society of Human Resource Management conducted a randomized survey among it's more than 210,000 members with regard to various types of leaves allowed under the Family and Medical Leave Act of 1993.  Some of the key findings were as follows:
  • Overall, 8% of the employees at the companies surveyed requested family leave in the last 12 months.
  • The most frequent request was for personal medical issues; making up 59% of all leave requests.  
  • These types of requests were up 81% in the last 5 years when compared to the 5 year period prior to that.  
  • Leave requests are a growing problem for employers when trying to fill the void created by the employee.  
  • While most leave requests give about two months advance notice, personal medical leaves rarely give notice with 50% of serious health issues giving one day's notice and 38% of non-serious providing the same.
  • When notice is given for a medical reason, the amount of time off is usually indeterminable while other employees pick up the slack in terms of double duty and overtime.  In longer term cases, the employer is saddled with hiring a temp who may or may not be as experienced or productive as the person they are filling in for.  Again, placing an additional burden on other employees to shepherd the activities of the temp.
  • These facts are reported to have created moral problems; loss of overall productivity; and even increased medical leave.
  • Human Resource Managers believed that 4 in 10 requests were not legitimate but did not pursue verifying that, for fear of a federal lawsuit over questioning what turned out to be legitimate.
All the statistics, above, would go higher if nearly a quarter of a year's paid leave is available to all workers under Hillary's plan.  That's because, simply,the disincentive of losing pay would be taken away.  It is common sense that some -- not all -- employees will abuse the system.

At the very least, you could apply the Pareto Principal whereby you could expect 80% of the abuse of the family/medical leave to be by 20% of the employees.   I know this to be true.  As a former senior manager at a major company who provided 10 paid sick days, approximately 20% of the hourly employees reporting to me took exactly 10 days sick pay per year.  Most of those people perceived paid sick days as a benefit that would be lost if not taken.

Lastly, my biggest problem with the original Family and Medical Leave Act and, now, Hillary's proposal is that It allows up to 12 weeks of leave as if all reasons for taking leave are equal; and they are not. In my opinion, this makes the law purely political and not logical.  As usual, with any federal mandate, businesses are forced into compliance; even if they can't afford to do so.  Thus, like other mandates, such as the employer mandate of ObamaCare, job and wage growth continue to be weak.  We, as a country should follow the lead of most other nations and provide for 12 weeks of paid maternity leave and paid family leave for a provable seriously ill immediate family member or for the employee themselves.  But, in other cases, a full 12 weeks is questionable.  Again, we don't need another government program that is subject to abuse and which is a one-size-fits-all political -- not practical -- solution to something that may or may not be a problem;  just to garner votes.


Hillary Clinton on the Issues: Paid Leave:

Family and Medical Leave Act of 1993:

Bureau of Labor Statistics:   Paid leave in private industry over the past 20 years:

Family and Medical Leave Act and its impact on organizations:

America's current maternity policy has nothing to do with families and everything to do with politics:

Pareto Principal:

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