Expansion of FMLA to Small Firms would Cover Additional 34 Million Working Americans

The Family and Medical Leave Act (FMLA) gives eligible employees job-protected, unpaid leave. While the FMLA covers about 60 million private sector employees, roughly two-in-five private sector workers are not covered because firms with fewer than 50 employees are exempt from the FMLA. A new report from the Center for Economic and Policy Research (CEPR) indicates that an expansion of the FMLA to would extend coverage to almost 34 million working Americans without posing undue hardships on business.

The report, "Expanding Family and Medical Leave to Small Firms," analyzes the Department of Labor's 2012 FMLA Worksite Survey to paint a fuller picture of the scope of leave policies already in place at small U.S. firms, and their experiences with those policies.

Currently, the FMLA gives covered employees job-protected and unpaid leave to bond with a new child, care for a seriously ill family member or military service member, or for their own serious illness for up to 12 weeks a year. Citing concerns that family and medical leave events would impose a heavy burden for smaller companies, business groups secured a carve-out to exempt firms with fewer than 50 employees from FMLA coverage. The authors of the study, Helene Jorgensen and Eileen Appelbaum of CEPR, found little evidence supporting the arguments against expansion of FMLA coverage to smaller worksites.

While not all of the firms examined in the study offered the full 12 weeks provided by the FMLA, the number of small firms offering some form of leave was significant. About 85 percent of these firms had a medical leave policy and 83 percent had a leave policy that allowed employees to take time off to care for family members. Roughly 87 percent of these worksites guaranteed the same or equivalent job upon return from leave.

Though technically exempt from the FMLA, some small firms do have leave policies that meet the FMLA standards and have not found the policies problematic.

"Our analysis found that small firms with leave policies that met the standards of the FMLA rarely reported any negative impacts on their business as a result of offering leave to their employees," said Jorgensen. Appelbaum added, "Less than one percent of small firm worksites characterized their experience complying with the FMLA standard as very difficult or even somewhat difficult. Extending coverage to all firms would provide job-protected leave to an additional 35 million workers."

There are also potential benefits to small business employers. The FMLA survey revealed that a number of small business owners found the FMLA to have a positive effect on productivity, turnover, and profitability. Echoing this sentiment, Matt Grove, owner of Bagel Grove in Utica, New York said, "Family medical leave not only provides a safety net for small businesses and our employees in terms of healthcare and medical situations, it creates a dedicated workforce. That leads to greater productivity, boosting small businesses' bottom lines. It also shows workers we recognize they are not only contributing to the success of our businesses, but also to the well-being of themselves and their families."

Jorgensen and Appelbaum's analysis yields valuable insights in the states that are pursuing their own family and medical leave policies as well as those seeking to expand the leave policies they have recently adopted. Strengthening leave policies at the national level by extending FMLA coverage to all firms could help these efforts.

"The landmark protections of the Family and Medical Leave Act sadly do not apply to more than two-in-five private sector employees," said U.S. Rep. Carolyn B. Maloney [D-NY]. "It's time for Congress to catch up to America's workforce needs and pass the Family and Medical Leave Enhancement Act legislation I introduced earlier this year to expand these protections. As the Center for Economic and Policy Research has demonstrated, the vast majority of employers that have voluntarily adopted FMLA standards have seen no detrimental effect and found it easier to attract and retain strong employees. I thank CEPR for providing this valuable research."