US small businesses in favour of President Biden's family leave proposal

US one of seven major economies that doesn’t guarantee paid maternity leave

Dubai, 4th May 2011.  Kristin Thrane Hart (38 year old mother from Norway) with her 11 month old daughter Liv.  Kristin started a website to help pregnant women on what to do and what to expect and other matters that is important to pregnant women and mothers.  (Jeffrey E Biteng / The National)

Among the many reasons the US does not yet have federal paid family leave is the idea that it is too expensive and burdensome for small businesses to offer months of time off to new parents.

But research shows that when given the option, small businesses like the policy.

In a survey of small companies in New York and New Jersey, two states with paid family leave, 71 per cent said they were very or somewhat supportive of paid family leave, a November working paper from the National Bureau of Economic Research showed.

This is up from 62 per cent a year earlier, before the pandemic.

A total of 539 companies in New York and New Jersey with less than 100 employees across a range of industries were surveyed in the report.

“Contrary to some commonly cited rhetoric, small employers in states with [paid family leave] programmes are actually quite supportive” of the concept, the paper said.

President Joe Biden’s Build Back Better Act currently includes four weeks of paid family leave — a first for the US, which still falls many months short of what most other countries offer new parents.

The US is one of only seven countries that does not guarantee any paid maternity leave, leaving the vast majority of workers with nothing at all.

Studies have found paid family leave benefits families, employees and businesses. Women with access to leave are more likely to return to work, which allows companies to hang on to existing workers and save on the costs of replacing them in a tight labour market.

The economy benefits when men take paternity leave too.

The passage of federal paid leave hinges on the support of Joe Manchin. The West Virginia senator has reportedly raised concerns about the logistical challenges for small businesses dealing with employee absences, potential fraud under the programme and the policy’s overall cost.

The new research shows that firms that had workers that used paid leave were more supportive of it. Of those companies interviewed, 22 per cent said they had employees use their state leave and 29 per cent had workers take leave under the Families First Coronavirus Response Act — boosting support for paid leave at those companies by 10 percentage points.

The same research team in 2016 surveyed a larger pool of companies in New York and New Jersey. At that time, 63 per cent of the companies in each of the two states said they were very or somewhat supportive of paid family leave programmes.

Updated: November 16th 2021, 7:53 PM