Tuesday, February 05, 2008

Fixing Family Leave

The WSJ takes on a policy that is supposedly "family friendly" and beyond criticism, Family Leave.
The law allows employees up to 12 weeks of unpaid leave a year to take care of themselves or relatives with a "serious medical condition." They can also take off for maternity, adoption or newborn care. That seems simple enough, but the courts continue to strike down regulations that the Clinton Administration issued to implement the act, and the result has been legal and economic confusion.

A 2005 study by the Employment Policy Foundation found the law's cost to businesses in 2004 was a not-so-cheap $21 billion. This included $5 billion in lost productivity, $6 billion to continue health benefits for employees on leave, and $10 billion in replacement labor costs -- including wages to employees who had to work additional shifts or overtime to fill in for the missing.
With these costs in mind, Secretary Elaine Chao's Labor Department last month issued rules to clear up ambiguities in the law that were being exploited. Take something called "unscheduled intermittent leave." Under current rules, an employee with a medical condition can simply fail to show up for two days before claiming leave. And since leave can be taken a few minutes at a time, employees can show up late, leave early, or disappear for an hour without notice. This is an invitation for misuse, especially at time-sensitive businesses (say, emergency first response or assembly lines) and many employers have lost control of their workforce. Under the proposed changes, employees would generally have to call in to request leave before taking it, which seems fair.

Labor's proposals would also clear up loose requirements for certifying what qualifies as a "serious" medical condition. Under current rules, workers can get an open-ended doctor's certificate for a condition -- asthma, migraines, whatever -- that allows them leave at any point. Under the new rules, companies can require employees to renew that certificate every year....
Many Democrats on Capitol Hill want to expand the law even further, imposing it on businesses with fewer than 50 employees, and making companies provide paid days off. But that would only expand the costs, and make employers even more reluctant to hire in the first place -- as in Europe. Meantime, the new rules will help ensure that family leave is taken by employees who really need it, not by slackers gaming the system.

These are just the cost associated with the federal requirements. If I'm not mistaken, CA has an even more generous policy.
In addition to these costs, you have to wonder how many employers are silently reluctant to hire women of child-bearing age, for fear of triggering these requirements.
Family leave is an example of a policy inspired by the desire to equalize the playing field between men and women, the ultimate goal of Leftist-inspired feminism. Once the concept is on the table, the regulation expands to include all kinds of Nice Things that Workers Will Love, but which will be expensive for business.
I maintain that it would be better for all to allow companies and workers to negotiate their own forms of flexible benefits, including flexible leave policies, rather than having the federal government impose a One Size Fits All policy.

1 comment:

Some Guy said...

"But that would only expand the costs, and make employers even more reluctant to hire in the first place -- as in Europe."

I would like to see a citation on this. Not writing that I do not believe it, but I have not heard of any crisis in Europe lately with unemployment among women of child-bearing age, so I would like verification.

Also, I am not convinced I buy the notion that these ideas will make business so expensive as to be crippling. Several businesses today already institute such policies of their own free will to try and attract workers and have felt no major suffering.

When businesses do institute these policies on their own, they tend to be "one-size fits all" benefits, and in my experience, business rarely does nice things for its workers unless something (either official corporate policy or governmental law) makes them.