Among the many reasons the U.S. still does not have federal paid family leave, is the idea that it is too expensive and cumbersome for small businesses to offer months of leave to new parents. But new research shows that if small businesses have the opportunity, they like the policy.
According to a November National Bureau of Economic Research working paper, in a survey of small companies in New York and New Jersey, two states with paid family leave, 71% said they support paid family leave very or somewhat. This is 62% more than a year earlier, before the pandemic.
“Contrary to much-quoted rhetoric, small employers in states with (paid family leave) programs are actually quite supportive of the PFL,” the document says.
President Joe Biden’s Build Back Better Act now includes 4 weeks of paid family leave – a historic first in the US and still many months behind what most other countries are offering new parents. The United States is one of seven countries in the world that does not guarantee paid maternity leave, with the result that the vast majority of workers have nothing at all. Washington lawmakers went on paid family leave in 2017.
Research has shown that paid family leave is available to families, employees and businesses. Women eligible for leave are more likely to return to work, which allows companies to retain existing workers and save on replacement costs in a tight labor market. The economy benefits when men also take parental leave.
The transition to federal paid leave is subject to the support of Senator Joe Manchin. The West Virginia Democrat has reportedly expressed concerns about logistics issues for small businesses related to lack of employees, potential program fraud and the total cost of the policy.
New NBER research shows that firms that have workers taking paid leave are more supportive. Of these companies surveyed, 22% said their employees took their state leave, and 29% had employees taking leave under the Coronavirus Response Act primarily for families, increasing support for paid leave at these companies by 10 percentage points. …
The new NBER study surveyed 539 companies in New York and New Jersey with fewer than 100 employees in various industries. The same research team surveyed a larger pool of these companies in 2016 in the states from which they had selected the most recent survey. At the time, 63% of companies in each of the two states said they supported some or all of paid family leave programs.
“Concerns about the negative impact on small employers should not impede efforts to expand PFL at the state or federal level,” the November report said.