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House Subcommittee Examines Family-Friendly Workplace Policies

On March 3, the House Education and Labor Subcommittee on Workforce Protections held a hearing, “Encouraging Family-Friendly Workplace Policies.”

Chair Lynn Woolsey (D-CA) said, “Forty years ago I was a single, working mother, supporting three children. So I know what it is like to constantly worry about the economic security of my family. Later, as a human resource manager, I saw how important employee benefits such as paid leave, paid sick days, and health care are to workers in both good times and bad. And there is substantial evidence that they ultimately improve the bottom line of the employer.” Rep. Woolsey continued, “We share President Obama’s optimism that the recovery plan currently being implemented will get people back to work. But, in addition, we also need to pass legislation that will help to ease the burden on working families to balance their jobs and their family responsibilities.

Noting the importance of workplace flexibility to employers and employees alike, Ranking Member Tom Price (R-GA) also stated, “As we engage in policy discussions about workplace benefits and coverage, we must not ignore the implications of placing costly government-imposed mandates on employers, many of whom are small businesses trying to stay afloat in the current economic climate. The reality is that businesses today are struggling with shrinking budgets, tightened credit, decreased demand for their products and services, and now a federal budget proposal that will drastically increase taxes on small businesses…What can be done to encourage the creation of work environments that are family-friendly and flexible, and yet meet the needs of the workers and the considerations of the business? We might want to begin by looking at removing obstacles in outdated federal laws and regulations that complicate or even prevent employers from working out flexible arrangements with their employees. For example, legislation has been introduced by our distinguished colleague from Washington state, [Rep.] Cathy McMorris Rodgers [(R-WA)], which would allow private sector workers to enjoy the same right that public sector workers already have that is, to choose for themselves whether to take overtime pay as cash wages, or to bank it as paid time off, at their discretion.”

Eileen Appelbaum, director of the Center for Women and Work at Rutgers University and professor at the School of Management and Labor Relations, discussed, in part, the benefits of family-friendly employment benefits, saying, “While the benefits to families and to public health from paid time off to care for yourself or a family member may be familiar to many people, the benefits to businesses are less well known. Access to paid sick days and to family leave insurance increases employee productivity and reduces turnover. Turnover is costly for employers, and access to paid time off to care for yourself or a family member significantly improves retention and reduces these costs. In addition, letting employees stay home and recuperate reduces the costs to businesses of illnesses that spread among the workforce when employees come to work sick. The cost savings are considerable and far outweigh any additional expenses associated with these workplace policies. Indeed, many businesses recognize the value of these cost savings, and already provide employees with paid sick days and other paid leave benefits.”

“Those who propose new laws and regulations to require businesses to provide specific leave benefits or more flexible work arrangements do so because of their concerns for these individuals,” said Michelle Bernard, president and chief executive officer of the Independent Women’s Forum, who outlined several concerns with government-mandated family-friendly policies. “I share that concern, but I am also concerned about the unintended consequences of government mandates for the employer-employee relationship. We cannot ignore that there are real costs associated with many of these provisions, such as requiring employers to provide a specific amount of leave time (paid or unpaid) or requiring the availability of more flexible work schedules. These provisions have real effects on a company or organization’s bottom line. Consider the situation with leave benefits. Simply put, when employees take time out of the work force, businesses must replace those workers or shift their responsibilities to other employees, resulting in lost productivity. If employers are required to increase the amount of leave time we offer employees, our costs are going to go up. It will become more expensive to retain or hire workers. As a result, businesses will have an incentive to hire fewer workers or to outsource jobs. As of 2006, more than 30 percent of the average worker’s total compensation was paid as benefits. If mandates drive costs up, that means there will be less money available to pay workers directly as compensation.”

Ms. Bernard continued, “Sometimes the costs of proposals aren’t obvious. Providing for more flexible schedules, for example, or work-at-home arrangements sound like a win-win for employers and employees…I firmly believe that it certainly can be. But such arrangements can work well in particular situations, but wouldn’t work so well for others. One of my employees, whose primary job is researching and writing, works almost entirely from home. This works for us: she has flexibility, but can easily be held accountable for her performance based on her output. Yet there are other positions where being physically in the office is a necessity. Right now, I have the flexibility as an employer to negotiate flexible arrangements. Employees know that it is a responsibility. Once such flexibility becomes a right, I will have a lot less control of managing my employees’ performance. It will become more difficult for me to reward positive performance and take action against those who aren’t working as they should. It would open employers like me up to a new raft of lawsuits and administrative tasks, all of which are a real burden on business.”

Ms. Bernard added, “I also want to highlight that at its core mandates are a loss of freedom for individuals. A law requiring employers to offer seven days of paid sick leave, for example, means that it has become illegal for two adults to create an employment contract without that provision. Why is this government’s job? Isn’t this a decision best left to individuals?”

Heather Boushey, senior economist at the Center for American Progress Action Fund, said, “The recession so far is leading to higher unemployment among men than women: As of December 2008 which is the latest data available men have lost four out of every five jobs shed since the recession began in December 2007. This means that in millions of U.S. households, a woman is supporting the family.” Ms. Boushey added, “Families need policies that ensure that as we rebuild our economy, we recognize and address the fact that both men and women work inside and outside of the home. The increased importance of women’s earnings has implications for a number of other work/life balance issues…[O]ne policy that could get money to states while making long-term investments in working families would be for Congress to consider the Family Income to Respond to Significant Transitions (FIRST) Act [H.R. 2392]. This legislation provides discretionary grants to states to implement programs that provide partial or full wage replacement for those taking leave for birth or adoption or those who are taking leave to care for themselves, their child(ren), spouse, or parent with a serious health condition, as defined by the Family Medical Leave Act (FMLA). In helping to defray the costs of setting up these programs, the federal government can encourage states to support working families at a time when families especially need the benefit of paid, job-protected leave. Establishing job-protected family and medical leave for more workers would help to ensure that no worker is pushed into the masses of the unemployed simply because they needed to care for a sick child or needed time to recover from an illness. Currently, the Family and Medical Leave Act [P.L. 103-3] only covers half the labor force because it excludes workers in firms with fewer than 50 employees; bringing this down to smaller employers would limit the unemployment of workers with caregiving responsibilities.”

Rebia Mixon Clay, a home health care worker from Chicago, also testified.

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