Paid Leave

Overview

Paid leave refers to the compensated time off workers may need to take for various reasons, including health or caregiving purposes. Currently, US federal law does not guarantee paid leave for employees.

Federal law, under the 1993 Family and Medical Leave Act, requires 12 weeks of job-protected unpaid leave, but due to eligibility requirements, less than twothirds of workers can access it. More than one-third (34 percent) of all workers still lack access to paid sick leave, with inequities across racial and ethnic groups and income levels.

In the absence of a comprehensive federal policy, recent years have seen an expansion of paid leave protections at the state level. Over a dozen states and Washington, DC, have paid leave laws in place. However, a national law is needed to ensure that everyone has the ability to take time away from work to care for themselves or their loved ones.

What the Research Says

• Data from the Bureau of Labor Statistics suggests that only 27 percent of the civilian workforce has access to paid family leave. Rates are significantly lower for certain segments of the workforce, including part-time workers. Among the lowest- wage earners, 95 percent do not have access to paid family leave, and 90 percent lack access to short-term disability leave. These workers are disproportionately women and people of color.
• When workers cannot access leave, their health suffers. According to an Abt Associates study for the Department of Labor, of those who needed leave related to a health condition but were unable to obtain it, approximately 44 percent reported that the person with the health condition instead went without treatment, and 39 percent said the treatment was postponed.
• Among employees who do take leave, the most common reasons are their own serious health condition (51 percent) or the arrival of a new child (25 percent).
• Paid sick leave programs improve public health and limit the spread of diseases. Evidence suggests that COVID-19-related emergency sick leave reduced the rate of infections and that paid sick time reduces flu-related absences.
• Paid leave programs benefit employers. Extensive research from states with paid leave programs shows they benefit businesses by supporting recruitment and retention and leading to increases in productivity.
• The United States is the only Organisation for Economic Cooperation and Development (OECD) country that has not legislated a national entitlement to some form of paid parental leave.

Why It Matters

There is substantial evidence that a lack of paid leave is not only bad for workers but also bad for the economy. Studies have shown that paid leave provides financial stability for workers and is cost-effective for employers, and that it boosts economic growth and labor force participation. It can also be a tool to narrow the gender pay gap.

Paid leave has wide-ranging benefits. A 2024 study found that paid family leave leads to improved mental health outcomes by providing more time at home when employees need it. Leave policies also support mental health through increased financial security and the opportunity to have a work-life balance. Findings from previous research examining the effects of New York’s paid leave policy suggest that these policies can alleviate food insecurity and reduce societal inequalities by increasing food expenditures, boosting labor force participation (especially for mothers), and improving parental health.

The evidence also shows that paid leave does not negatively impact employee performance. A survey examining the impacts of New York’s paid family leave policy on employers found no evidence that the policy negatively affected employer ratings of employee performance or handling of long absences. Instead, employers reported improved ratings of employee commitment and cooperation, particularly in the policy’s first year, and found it easier to manage absences.

Even when people have access to paid leave, barriers persist. A qualitative study conducted in California, New Jersey, and Rhode Island found low awareness of paid leave laws among parent and caregiver support groups, though once they became aware, participants appreciated the benefits available and recognized their potential for mental and physical relief. Nonetheless, participants also noted barriers such as workplace reprisal fears, limited time off, and insufficient wage replacement. In particular, caregivers of individuals with long-term illnesses highlighted the inadequacy of current benefits for their needs despite the generally positive impact recognized on families and employment.

Paid leave access is a top priority for workers. According to 2022 IWPR research, paid sick time and paid family leave are critical concerns for an overwhelming majority of women. In a nationwide survey, both were cited as top considerations for women reentering the workforce following the COVID-19 pandemic, with female respondents indicating that paid sick time (77.3 percent) and paid family leave (76.6 percent) were “very important” or “important” benefits when considering future jobs. Notably, only 31.3 percent of the women surveyed reported having access to paid family leave in their current job.

Policy Solutions

Ensuring that workers have access to paid leave and the ability to take time to care for themselves and their families without jeopardizing their employment or income is critical to closing the pay gap, promoting equity and fairness, and promoting healthy families. To that end, policymakers should:

Enact a national program of paid family and medical leave. Any federal paid leave policy must prioritize inclusive definitions that cover a wide range of workers and situations, as well as robust benefits and protections that enable workers to actually use the benefit. Specifically, a federal leave program should:

• Include coverage for all workers across a range of categories. This includes employees and independent contractors, part- and full-time workers, and public- and private-sector employees. The coverage should be regardless of industry or employer size.
• Guarantee a minimum of 12 weeks paid leave for all workers.
• Cover an expansive range of purposes. These should include serious health conditions, parental bonding, caregiving for loved ones, safe leave to address situations of sexual or domestic violence, and needs related to military deployment.
• Expand the definition of “family” to ensure that workers can care for all those they consider family, including loved ones outside of legal or biological relationships.
• Provide wage replacement for all workers at a rate that is high enough for everyone— particularly low-income workers—to be able to afford to utilize the benefit.
• Include the right to return to work following leave, along with protections against retaliation and interference.

Ensure the program has a sustainable, long-term funding source that guarantees adequate investment without taking resources away from other critical social programs. Research has underscored that paid leave is cost-effective; there are multiple viable options for raising funds for a paid leave program, many of which have been illustrated at the state level. As policymakers consider funding options, they should not pay for paid leave by reducing funding to other programs on which working families rely, such as Social Security.

Enact national policies that guarantee a right for all workers to earn paid sick time or time off for short-term illness, injury, medical treatment, or to care for the health of a loved one. A national paid sick leave policy should establish a right for all workers to earn paid sick time and should be inclusive of workers across industries and sectors. Policymakers should consider options to extend paid sick leave to both part- and full-time workers, as well as assessing the impacts on contractors and gig workers. A federal paid sick leave policy should protect workers from retaliation and ensure they are able to use the benefit without fear of punishment or retribution at work. The policy should guarantee that the worker continues to be paid at their standard salary during the term of their leave.

Key Legislation

Family and Medical Insurance Leave (FAMILY) Act: Legislation to create a national paid family and medical leave insurance program, establishing a federal right to paid leave. The FAMILY Act includes expanded and inclusive definitions to allow workers to take leave in a wide variety of circumstances and to care for loved ones outside their immediate family.

Healthy Families Act: Legislation that requires employers to allow their employees to earn up to seven paid sick days per year. It covers full- and part-time employees across businesses and sectors and allows employees to take leave for a wide range of health-related purposes. It also includes an expansive definition of “family” to ensure that workers can take time to care for those closest to them.

Job Protection Act: Legislation that would close gaps in the Family and Medical Leave Act (FMLA) to allow more workers to access benefits under existing law. Specifically, this bill would extend FMLA coverage to part-time workers, those working for smaller employers, and workers who change jobs.

Caring for All Families Act: Legislation that would amend the definition of “family” included in the Family and Medical Leave Act (FMLA) to cover a broader set of relationships, including chosen family.

Comprehensive Paid Leave for Federal Employees Act: A bill that would give federal workers up to 12 weeks per year of paid leave in connection with a personal illness or to care for a sick family member.

Executive Priorities

Budget for paid leave. Paid leave was included in the White House’s FY 2025 budget proposal, which included the establishment of a comprehensive national paid family and medical leave program. Future presidential budgets should include a similar commitment to enacting a national paid leave program.

Enforce existing provisions, particularly Executive Order 13706. This executive order, which dates from 2015, requires that federal contractors provide their employees with paid sick days. Future administrations should also look to build on existing executive action by further requiring that federal contractors provide employees with 12 weeks of paid family and medical leave.

This brief is part of IWPR’s Federal Policy Solutions to Advance Gender Equity. Click here to see the full series.