What happens to businesses after a state implements paid family leave? Do small businesses suffer? Are jobs harmed?
Six years after New Jersey became the second state in the United States to approve paid family leave, Dr. Eileen Appelbaum, a researcher at the Center for Economic and Policy Research set out to answer these questions.
The study learned what states like California (congrats on your ten year paid-leave-aversary, CA!) already know: businesses report improved morale, reduced turnover, no difference in productivity and little to no increase in paperwork.
Wait, what’s the catch? It must be expensive! Nope.
The program is funded by an employee payroll deduction—no more than 60 cents per week.
Here’s what Dr. Eileen Appelbaum reports:
We analyzed responses to confidential interviews of employers and human resources personnel at New Jersey companies ranging in size from 26 to 36,000 employees. Most were small businesses.
None of the participating employers reported that the program affected their productivity or turnover, and 89 percent reported no negative impact on profitability.
A majority of employers experienced no increase in paperwork due to administration of the program, although some reported a small to moderate increase.
Despite fears that the program would be abused, no employers were aware of any instance of abuse.
At the same time, many employers reported positive effects from the program, including improved morale.
As the human resources manager of an electronics company reported, paid family leave “helps people when they are at their most vulnerable” and benefits the employer when the employee returns to work. “Once they are back here, they are focused, not putting together pieces of the things that have fallen apart (in their life) while they were out. They can really jump back in.”
Our findings about New Jersey’s experience are consistent with a study I conducted with Ruth Milkman about the first six years of a similar paid family leave program in California. Our survey found that use of the paid leave program actually reduced turnover and had little impact on companies’ productivity or profitability.
Six weeks of paid leave to care for my new babe or sick dad? New Jersey sounds like the place to be for working families.
Instead of moving to the Garden State, let’s implement paid family leave here in Washington. Working families and businesses are ready for action and stronger, healthier communities.
By Sam Hatzenbeler, Graduate Policy Intern