With paid leave for federal employees possible, are private sector employees next?

With the current economic outlook looking bleak, more and more private businesses are looking to trim payroll and cut staff in order to stay afloat. However, certain programs advancing in Congress, like the Federal Employees Paid Parental Leave Act (H.R. 626), seem to defy those cost-cutting trends as it would add, not subtract, costs. The Congressional Budget Office has estimated it could cost as much as $938 million from fiscal 2010 to fiscal 2014.

The Act, which passed the House by a vote of 258-154 on June 4, 2009, would provide paid parental leave benefits to all federal employees. It would provide all federal employees with four weeks of paid parental leave for the birth or adoption of a child, and would allow employees to use accrued sick or annual leave instead of the 12 weeks of leave guaranteed to them under the Family and Medical Leave Act.

Representative Carolyn B. Maloney (D-NY), a supporter of the bill, recently said that "families and family values are a top priority for President Obama and with his signature, our workforce will soon have comparable standards to professional private sector employees—and the rest of the industrialized world." Whereas, Representative Darrell Issa, (R-Calif), who offered an amendment to H.R. 626 that was defeated—as it did not provide employees with paid parental leave—posted a video on YouTube outlining his opposition to the bill, calling it yet another government bailout.

For the private employer, one issue comes to mind: Will passage of H.R. 626 begin the process of required paid leave for private sector industries? Private sector employees must be wondering what Rep. Maloney means by “comparable standards to professional private sector employees,” as most private businesses do not provide paid parental leave beyond vacation pay. In fact, only California, Washington and New Jersey currently have family leave insurance programs, and Washington just delayed for three years (S.B. 6158), from October 2009 until October 2012, implementation of the state's paid family leave insurance law.

If eventually signed into law, H.R. 626 would provide federal employees with another job-related “perk,” and it would certainly have private sector employees clamoring for the same kind of paid leave. How it would affect the bottom line is the critical issue. Private businesses have raised cost issues with the FMLA ever since it was passed into law (i.e., costs associated with giving employees time off, costs of litigating FMLA claims), and the FMLA only requires unpaid leave. Add paid leave to the equation, along with tough economic times, and there may be even more cost-related issues as private businesses look to trim even more staff, or even “close shop” altogether.