Q: So, at the last State of the Union there was mention of Paid Parental Leave. What in the world is that all about?

A: Yes, this was a campaign promise and it’s the second year in a row that it’s come up during the SOTU speech.

The proposal includes 6 weeks of paid leave for new parents, including those who adopt, in order to provide time to “recover from childbirth and bond with a new child” .

But don’t confuse the proposed “parental” leave with our existing “family” medical leave law.

Current federal law under the Family and Medical Leave Act (FMLA) allows eligible workers to take up to 12 weeks (unpaid) to care for medical issues of “spouse, parent, child or self”. By contrast, the 6 weeks paid parental leave being proposed is only for parents and new babies. Those who currently take leave to provide care to family members (spouses, parents) or who have personal medical issues would not be covered. According to the Dept of Labor they account for 75% of FMLA use. In other words, the foot print is relatively small.

How to pay for it?

This is always the problem with any entitlement, isn’t it?

The proposed provision wants the plan to be paid through the country’s unemployment insurance system and managed by individual states. It would cost about $25 billion over 10 years, but it’s unclear where the money comes from. Michael Strain, an economist at American Enterprise Institute, a public policy think tank, said the proposal would likely involve increased payroll taxes. Yikes!

Another idea proposed by Marco Rubio would allow new parents to finance paid leave by pulling from their Social Security funds. This was criticized because it would cause a delay in retirement benefits to those that take part. I actually find it fair in that it only affects those who use it, whereas a payroll tax hits every single worker.

Lastly, I doubt anything will pass in the next two years since our government is so dysfunctional right now. But sooner or later, we need to join the civilized world. I’ll leave you with these statistics to compare:

Money reports the U.S. is the only developed nation not to have paid parental leave, and the amount of pay proposed (6weeks) pales in comparison to others. Amongst 40 other countries, the least amount of paid time given is two months, while some countries, including Japan, Estonia, Austria and Norway, offer over a year.

©Copyright Eva Del Rio

Eva Del Rio is creator of HR Box™ – tools for small businesses and startups. Send questions to Eva@evadelrio.com