Analyzing Paid Leave Insurance Program for Wisconsin

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September 24, 2015

Contact: Laura Dresser | 608-695-9065 | ldresser@cows.org

Madison, WI— Today, COWS has released Putting Families First in Wisconsin: Estimating Utilization and Financing of Paid Family Leave Insurance. Paid Family Leave Insurance allows workers to take short-term paid leave in order to care for their families without fear of losing their jobs or significant loss of income. This is a policy that helps workers balance both work and family, and programs are already well established in California and New Jersey. Building off the experience in those two states, we estimate utilization and financing for a Paid Leave Insurance program for the state. Such a program would likely grow to support some 100,000 working Wisconsinites each year and could be supported by a premium on wages of 0.4 percent.

 

Given the protection of the federal and state laws around Family Medical Leave, many workers are able to take up to twelve weeks of unpaid leave for family events such as the birth or adoption of a child. But unpaid leave is very hard to take. Working families simply cannot afford to forego wages for that long. As a result, new parents head back to work sooner than they want and workers struggle to juggle work and serious family crises, like a gravely ill spouse or parent.  With a state Paid Leave Insurance program to provide income, Wisconsin’s working families could rely on some income in times of joy or crises rather than having to continue working under the strain of intensified family needs.

 

We analyzed, for Wisconsin, a possible Paid Leave Insurance program that is similar to programs in other states. It would allow workers to access up to twelve weeks of paid leave by providing payments of around 2/3 of a worker’s wage, with higher wage replacement rates for lower wage workers and a $1000 cap on weekly payments.

 

Experience from California and New Jersey suggests that the premium on wages required to fully fund the payments in such a program are small. For example, a benefit structure which provides progressively higher wage reimbursements for lower-wage workers would require an assessment of a 0.4% premium on all wages.

 

“Unlike virtually every developed nation, the US provides no income security to support families in times of transition. The security and peace of mind offered by paid leave insurance is substantial. And even better, we find that the cost of such programs is quite low,” said Laura Dresser, COWS Associate Director and report author. “Too many workers simply can’t afford to take unpaid family leave. A Paid Leave Insurance program would substantially help Wisconsinites balance work and family.”

 

View full report here: http://www.cows.org/putting-families-first-in-wisconsin


 

For additional reports about Wisconsin’s workforce, see also: