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23 years ago, Congress passed the Family and Medical Leave Act with the promise that it would not harm businesses because the leave was unpaid – and, thus, would not present a moral hazard. FMLA was the bait, and now we are seeing the switch as the Obama Administration is pushing hard for paid leave. DOL seems to post a tweet on paid leave every other day, using the #LeadOnLeave hash-tag, including the recent tweet: “As the #OpeningCeremony kicks off, the US has already fallen behind in the sprint for paid leave.”
Is this yet another solution in search of a problem? Another attack on small businesses? I say "yes" to both. Digging down into the latest data from BLS, 80% of “private industry” employees working for large employers (500 or more employees) have paid leave already – a benefit necessary to attract and retain the best employees – compared to 53% of employees who work for companies with less than 50 employees. So, most employees who do not already have paid leave work for small businesses who can't afford to provide it. What impact will forced paid leave have on small businesses? Well, probably the same impact as minimum wage hikes – it will destroy jobs. What about the 20% of employees at large employers without paid leave? Most likely, they are among the 70% of part-time employees who do not have paid leave. To learn the facts about paid leave, see Table 6.
