Business Group Urges Congress to Legislate Paid Family Leave Standard

Business Group Urges Congress to Legislate Paid Family Leave Standard

As part of a report released on Tuesday by the HR Policy Association, the association of Chief Human Resource Officers at major employers is calling on the US Congress to enact a law protecting multi-state employers whose paid family and medical leave offerings meet a minimum federal standard against prosecution for not complying with more stringent local and state mandates—but not to mandate that employers meet that federal standard:

Congress should enact a federal standard that provides a safe harbor for multi-state employers that choose to voluntarily provide paid leave to their employees, regardless of their state of domicile. The differences between the paid family and sick leave laws in the several states makes it more difficult for these multi-state employers to comply with each facet of the state laws and still provide a desired service to employees residing in states without paid leave requirements. Employers would not be required to meet the standard, but having paid leave policies that are consistent with that standard would shield a company operating in multiple states from prosecution under a particular state or local law for failure to provide the leave in the same manner dictated by that jurisdiction.

The report argues that many organizations already provide generous paid leave policies, and that a patchwork of state and local mandates makes it more difficult for companies to design leave policies that work for both them and their employees. The recommendation comes in response to the growing among to the growing trend of states and localities implementing their own labor policies as federal regulations are either stalled or scaled back. Localities that are charting their own course on family leave include San Francisco, Washington, DC, and New York State.

With the patchwork of regulations that has been emerging, the complexity facing HR is indeed increasing exponentially. This complexity has real costs: Businesses have to spend more time, resources, and energy adjusting policies across their geographically distributed workforces. In light of these costs, multi-state employers must decide whether to navigate the complexity of tailoring their rewards or recruiting policies to different regulatory regimes, or to take the “highest common denominator” approach and simply comply with the most restrictive requirements.

Americans overall favor paid parental, family, and medical leave and think employers should be responsible for providing it, but are split on whether to impose a federal paid leave mandate or let employers decide for themselves. The direction of federal policy remains unclear: President Donald Trump expressed support on the campaign trail last year for a federal maternity leave law, and appeared to broaden the scope of that ambition in a speech last month, but his administration has yet to put forth a specific policy proposal.

What the HR Policy Association is recommending, however, is not a federal mandate but rather a federal cap on what states or localities can require employers to provide. In this regard, Bloomberg’s Josh Eidelson observes, the proposed “safe harbor” would be an outlier in federal labor law:

In response to the spread of local regulations, conservatives and business groups have pushed state lawmakers to strip cities and towns of the authority to pass such measures. With the GOP now in control of the White House and both houses of Congress, said University of Michigan law professor Samuel Bagenstos, they have the chance to preempt states and cities nationwide — a strategy that could establish precedent for other issues.

It would be unusual for Congress to override state or local mandates on pay or benefits, Bagenstos said. Federal employment law has generally acted as a floor — establishing national minimum standards like a $7.25 hourly wage — rather than as a ceiling.

The association’s argument that employers do not need government prodding to expand family leave is in line with the recent trend among large employers, such as Ikea and American Express, toward adopting more generous parental leave policies as a means of retaining employees who want to start families, particularly women. Employers may not be moving as fast on this issue as family leave advocates would like: A recent study found that the number of American women taking maternity leave each month had barely changed between 1994 and 2015.

While the HR Policy Association’s recommendation to establish a semi-mandatory federal standard for paid leave might be effective at helping to manage complexity, it is unlikely to be a winning strategy when it comes to attracting talent, for two reasons: First, progressive companies will continue to offer family leave policies above and beyond the standard in order to attract and retain the best quality talent, so those that offer the standard benefit could be perceived as doing the bare minimum for their employees.

The second issue emerges because HR policies continue to become increasingly intertwined with public relations. Which company wants to be the first to tell its employees, “We don’t actually follow the laws of the state or city where you work, because we can legally offer you less,” and see how employees, candidates, and customers respond? Even if Congress acts on these recommendations and makes it legal for companies to disregard local leave mandates, this is hardly the approach to take if you want to be viewed as a great place to work.