MEMORANDUM TO: SENATOR CHARLES SCHUMER FROM: CARMELO FREDA & TIFFANY NICHOLAS RE: MATERNITY LEAVE LEGISLATION DATE: MARCH 9, 2015 Problem: Lack of Maternity Leave Causing Harms to Women, Babies, Businesses, as Well as International Standing The current standing of paid maternity leave in the United States is virtually nonexistent. As federal law currently states, women are afforded only 12 weeks of unpaid maternity leave due to the Family Medical Leave Act (FMLA) (Department of Labor, n.d.). If combined with an employer providing income, this would be a relatively stable amount of time. However, only about 16 percent of employers offer paid maternity leave, resulting in many families taking on debt or turning to public assistance to simply have a child (Finnigan, 2014). In some cases, women are forced into choosing between having a child or moving forward in their careers. As America's falling fertility rate raises economic concerns and gender equality becomes more of a pertinent and pressing issue, we must pass paid maternity to assist in ameliorating such problems. Current maternity laws pertaining to Mothers/Parents within the United States are as follows: Family Medical Leave Act – The Federal Family Medical Leave Act of 1993 (FMLA) provides important unpaid job protection for working women experiencing pregnancy complications, premature birth of an infant, or who want to bond with their baby. To clarify: this is unpaid time away from work. (Department of Labor, n.d.) Americans with Disabilities Act – A normal pregnancy is not considered a disability under the Americans with Disabilities Act (ADA). If pregnancy complications are experienced that substantially limit a major life activity, mothers may be considered disabled under the ADA, and employers may need to make special accommodations. (National Women's Law Center, 2014) Pregnancy Discrimination Act – The Pregnancy Discrimination Act (PDA) prohibits discrimination against employees and applicants on the basis of “pregnancy, childbirth and related medical conditions.” The pregnancy discrimination law requires employers to treat pregnant employees the same as other employees on the basis of their ability or inability to work. (National Women's Law Center, 2014) Clearly, existing law does not fully address the needs of a family and a newborn infant. The following problems will continue to pervade such groups unless paid maternity leave legislation is passed: Health & Work Issues of the Mother Women need time to recuperate after pregnancy and the delivery of a child; families and children need time to bond after adoption or birth. “For example, approximately 13% of women will have a complication from pregnancy requiring them to be hospitalized before delivery, and 20% of pregnant women spend a minimum of 1 week on bed rest during the course of their pregnancy (Census Bureau, 2008).” Additionally, the impact of leave is intensified for parents and children who have serious medical complications and health conditions related to pregnancy and delivery. According to Human Rights watch, “Millions of US workers - including parents of infants - are harmed by weak or nonexistent laws on paid leave, breastfeeding accommodation, and discrimination against workers with family responsibilities. Workers face grave health, financial, and career repercussions as a result (Human Rights Watch, 2011).” Current laws and policies cause family suffering due to insufficient care from mothers not having the opportunity and support to nurture and care for their newborns as they should. There is an incessant need for change at all levels of businesses and government. Women wanting to move forward in their careers at times may be heavily burdened with the decision to either have a child and lose their income stream, or continue on their career without ever having the chance to have a child due to the fear of losing their income stream for a temporary amount of time. Small Business Exemption The current laws regarding maternity leave do not apply to small business owners. For example, under the Family and Medical Leave Act, only companies with more than 50 employees in a 75 mile radius are required to provide unpaid, job-protected leave for family and medical reasons with continuation of group health insurance under the same terms and conditions as if the employee had not taken leave (Department of Labor, n.d.). As a result, there are very few small businesses that offer any kind of paid maternity leave programs. Legally speaking, small businesses with fewer than 50 employees are not required to provide any type of leave to new mothers or fathers, whether paid or unpaid. Such businesses are exempt from the Family and Medical Leave Act. 2 Baby Development It is a well-established fact that the first few months of an infant’s life are crucial in physical, mental, and emotional development. The UC Davis Medical Center implores new mothers to spend as much time as possible with their newborn, going as so far to say that “…failure to do so profoundly affects future development and the ability to form healthy relationships as an adult (Steinfeld, 2014).” Likewise, mothers are also affected by a lack of bonding time with their newborns. According to Scientific American, bonding with a newborn baby reduces levels of stress and can significantly reduce postpartum depression. Further, mothers who spend more time in the formative months of an infant can pick up cues from their children much easier, increasing parent responsiveness to infant needs (Harmon, 2010). Parental leave shows greater results in prenatal and postnatal care and strengthened parental bonding over a child’s life. This time provides long-term benefits that will improve a child’s brain development, social development and overall well-being. If mothers cannot leave their job for a temporary amount of time, newborns will certainly not be able to bond in the proper manner that ensures successful development. Parenting is already incredibly stressful – by removing the chance for a mother to create those bonds with their infants only makes it all the more difficult. International Standing The United States of America prides itself on exceptionalism. Our innovation, businesses, and universities are some of the best in the world, and are a uniquely American phenomenon. The world looks to us as an example of a shining democracy on a hill - one often imitated, but never quite duplicated. To continue being a beacon of democracy and human rights, the United States must adopt some form of paid maternity leave. At the moment, we are the only industrialized nation on earth to not offer some form of paid maternity leave. We cannot act as a worldly example if our standards do not match most of the world in one of the most important issues facing women. The only other countries to not offer paid maternity leave are Oman, Papua New Guinea, Swaziland, and Lesotho. Most of our Western counterparts mandate paid maternity leave at an absolute minimum of 4 months. Our international partner that with the longest time is Sweden, at a full 16 months (Rosen, 2014). Such extended periods of paid maternity leave are derived from a number of international treaties and conventions that the United States has continued to exclude itself from. Perhaps the most important of such treaties was the almost overwhelming approval by the 3 United Nations General Assembly of the Convention of the Elimination of All Forms of Discrimination Against Women in 1979. The provisions came into force in 1981, and introduced maternity leave with pays or with comparable social benefits without loss of former employment, seniority, or social allowance. The United States did not approve of the convention, along with the Holy See, Iran, Somalia, South Sudan, Palau, and Tonga (United Nations, 2008). Being in such undistinguished company is not where the United States should stand. To upkeep or moral standing as a nation, we must enact paid maternity leave. ________________________________________________ As a means to ameliorate the aforementioned issues, we have three separate recommendations. They are as followed: Policy Options: The Extended NJ Plan, the Extended CA Plan, the FAMILY Act Policy Option 1: Combined Payroll Tax Increase. 24 Weeks of Paid Leave. (New Jersey Plan) Our first recommendation is very similar to the current framework for paid maternity leave in the state of New Jersey, with a small difference. First and foremost, we recommend 24 weeks of paid leave, available to all working women. We recognize this may not be as politically feasible as proposing lesser time, but we prepare for congressional negotiations and subsequent reduction of time by aiming high. The 24 weeks can be taken at any point that the pregnant mother request - whether it be due to early complications with the pregnancy, or some other kind of related medical emergency requiring an employee to leave work. The 24 weeks can be taken consecutively, or intermittently at request of the mother within the first year after birth of the child. As for financial details, we recommend the same approach as New Jersey, but on a federal level. The federal government will provide up to ⅔ of the average of earnings over a period of 8 months for an individual, with a cap at $600/week indexed for inflation. Filing for such funds is similar to filing for disability, and will be handled by a separate state agency. As for funding such a project, it will come from two separate sources - a small increase in payroll tax that is covered in part by the employer as well as the employee. In this manner, not too much financial burden of the program is put on either the employee or employer side. Many may disagree with such a policy based on their value judgments thinking businesses should not be forced to spend money on an employee benefit, and should be free to choose to do so. However, the abysmally low percentage of businesses 4 that do provide such benefits counterbalances this value, as the harm caused by the number of women not having maternity leave is much larger than the harm on businesses caused by a small tax increase. In NJ, the tax increase was .09% of the first $32,000 earned. On average, this is about $1 per week for per employee (Devlin, 2015). Since our recommendation also includes employers partially funding the program, individuals will be paying a miniscule amount for such an incredible benefit. When carried over to a federal level, we expect a similar increase, if not less as the tax base will increase significantly. Policy Option 2: Adjust the Social Security Tax Cap. for “Newborn Act” - 26 Weeks of Paid Leave. Our second recommendation would be to incorporate funds from increasing the “tax cap” on Social Security contributions. These funds would be contributed to create a new short term disability program strictly for maternity leave. This new program would be called the Newborn Act” and mothers would receive 26 weeks of paid leave. The 26 week period could begin two weeks prior to what was originally requested from an employer due to early pregnancy complications, medical emergencies, or early birth. Participants of the “Newborn Act” would receive 70% of the average earnings for 26 weeks per individual, with a cap of $550 per week. We propose adjusting the Social Security tax cap to pay for such a program, and to provide tax relief to lower income workers. Currently, Social Security taxes are paid up to $117,000 of earned income in 2014 (SSA, 2015). Individuals who earn more than this threshold do not pay Social Security taxes on income that surpasses that threshold. This change would affect the 5 percent of workers whose earnings exceed the cap, and they would receive somewhat higher S.S.I. benefits when they retire. Policy Option 3: Senator Kirsten Gillibrand’s Current Plan. FAMILY Act. Perhaps the most politically feasible of all is the current paid maternity leave legislation proposed by Senator Kirsten Gillibrand of New York. The act proposes 12 weeks of paid maternity leave, creating an independent trust fund within the Social Security Administration. By going through the Social Security Administration, it would improve administrative efficiencies and reduce the harms of a new bureaucracy (Gillibrand, 2015). Such a trust fund would be financed by employee and employer contributions of 0.2%. According to Gillibrand, this would not add to the federal deficit at all. On average, the FAMILY act would cost the average woman $4.36 per week. Similar to plans in NJ and California, the FAMILY Act would provide up to 66% of wages after childbirth, based upon the previous few months of income. Additionally, 5 there would be a cap that would be indexed according to inflation rates. Furthermore, all individuals are privy to such benefits, regardless of the size of the company or income level of the individual. ______ We expect significant backlash from libertarians, conservatives, and business advocates for any of the three proposals. Many will point out that women in the United States have done just fine without maternity leave for the past century, and another government mandate would be further intrusion on business freedoms. What critics fail to realize is that more and more women continue to enter the workforce, and without paid maternity leave true gender equality and the ability to advance in their careers is difficult. Tax credits to businesses may be another viable option - but once again - leaving the decision to businesses, even with an incentive, may continue to keep the paid maternity leave percentage low. Businesses will almost always put profits first. It is inherent in the system, and because of that, must be a mandate rather than an option. The three recommendations are more or less the same, but with differing finance options. Our first option uses a combined payroll tax increase similar to New Jersey. The second plan proposes increasing the Social Security Tax Cap. Our third, the FAMILY Act, includes creating a new trust fund within the Social Security Administration. While the financing options may be different, they all have the same overall goal. Thank you for taking the time to read our proposals. We are confident in the American public’s support of such an issue. We are even more confident of your ability to pass one of our recommendations. 6 REFERENCES Census Bureau. (2008). Maternity Leave and Employment Patterns of First Time Mothers. Retrieved from US Census: https://www.census.gov/prod/2011pubs/p70-128.pdf Department of Labor. (n.d.). Family and Medical Leave Act. Retrieved from Department of Labor: http://www.dol.gov/whd/fmla/ Devlin, D. (2015, February 5). What Would is Cost to Have Mandatory, Paid Maternity Leave? Retrieved from Fortune: http://fortune.com/2015/02/05/paid-parental-leave-costs/ Finnigan, A. (2014). Everyone but U.S.: The State of Maternity Leave. Retrieved from Working Mother: http://www.workingmother.com/best-companies/everyone-us-state-maternity-leave Gillibrand, K. (2015). The American Opportunity Agenda: Expand Paid Family and Medical Leave. Retrieved from Kirsten Gillibrand: http://www.gillibrand.senate.gov/issues/paid-family-medical-leave Harmon, K. (2010). How Important Is Physical Contact with Your Infant? Retrieved from Scientific American: http://www.scientificamerican.com/article/infant-touch/ Human Rights Watch. (2011, February 23). US: Lack of Paid Leave Harms Workers, Children. Retrieved from Human Rights Watch: http://www.hrw.org/news/2011/02/23/us-lack-paid-leaveharms-workers-children National Women's Law Center. (2014). The Pregnancy Discrimination Act and the Amended American with Disabilities Act. Retrieved from National Women's Law Center: http://www.nwlc.org/sites/default/files/pdfs/pda_adaaa_preg_workers_fact_sheet_2014.p df Rosen, R. (2014, June 20). A Map of Maternity Leave Policies Around the World. Retrieved from The Atlantic: http://www.theatlantic.com/business/archive/2014/06/good-job-america-a-mapof-maternity-leave-policies-around-the-world/373117/ SSA. (2015). Benefits Planner: Maximum Taxable Earnings (1937 - 2015). Retrieved from Social Security Administration: http://www.ssa.gov/planners/maxtax.htm Steinfeld, M. B. (2014). Bonding is Essential for Normal Infant Development. Retrieved from UC Davis Medical Center: http://www.ucdmc.ucdavis.edu/medicalcenter/healthtips/20100114_infant-bonding.html United Nations. (2008). Convention of the Elimination of All Forms of Discrimination Against Women. Retrieved from United Nations: http://www.un.org/womenwatch/daw/cedaw/ 7