Impact of the Family and Medical Leave Act on Wellbeing of Employees: A Quarter Century Later

Background/Purpose/Research Question: The United States passed the Family and Medical Leave Act (FMLA) almost 25 years ago in 1993 mandating employers with 50 or more employees to provide up to 12 weeks of unpaid leave to their employees upon the birth/adoption of a child or other family emergencies due to illness. Critics have argued that the unpaid nature of the federal policy has made it possible for a small percentage of Americans to use this benefit yearly. In recent years, local and state level efforts toward a paid leave have increased.  Several states, local governments and companies have adopted a paid leave policy. In 2014 California passed paid family and medical leave. Voters in a number of other states, New Jersey, Rhode Island, New York, Massachusetts have also made a similar move. In this paper I conducted a systematic review of the studies that assessed the impact of the federal FMLA and a state FMLA (California) on employee wellbeing. 

Method:We searched for articles, study reports on PsychInfo, state level Google Scholar, General Accounting Office, Urban Institute, Matematica, Manpower Demonstration Research Cooperation, and U.S. Congressional Research Service Report databases using search terms including “FMLA”, “paid employee leave benefit”, “California paid family leave”, “employer offered paid maternity leave”, “paid family leave.” The search resulted in six studies, three of which evaluated California’s paid leave policy and the other three examined the policy’s effect at the national level.

Results:  A quarter century after the passage of FMLA fewer than 20% of the workers take medical and family leave yearly. While the FMLA has helped millions of Americans take unpaid leave and return to work, many workers do not qualify for leave or cannot afford unpaid leave. Nationwide, the most highly-paid quarter of the workforce is four times more likely to receive employer-provided paid family leave than the lowest-paid quartile of workers. While federal FMLA provides un-paid leave of up to 12 weeks to employees upon birth/adoption or to care for ill family member, in California the employees enjoy the first six weeks of paid leave for the same purpose. This state hasinstituted paid FMLA for at least three years and there is no indication of any adverse effect on the economy or job growth.  A paidFMLA compels a low cost from employees. In California, employees pay on average a maximum of 30$ annually for the paid leave. While paid FMLA had no noticeable impact on productivity, profitability and business growth, paid leave recipients are significantly more likely to return to their work than non-paid employee leave takers.

Conclusion and Implications:This systematic review showed that the lowest-paid workers are far less likely than higher-paid workers to have access to paid family leave through their jobs. CAhas adopted a paid leave policy has not seen any adverse impact on its economy. Instead, employees in CA are significantly more likely to return to their work after taking the leave. The results inform the national debate supporting the paid leave policy.