FACT SHEET: Helping Middle-Class Families Get Ahead by Expanding Paid Sick Leave

“We are the only advanced country on Earth that doesn’t guarantee paid sick leave or paid maternity leave to our workers. . . . And that forces too many parents to make the gut-wrenching choice between a paycheck and a sick kid at home.”

– President Barack Obama, State of the Union Address, January 20, 2015

In most families today, both parents work and have responsibilities caring for their children, aging parents, or family members with disabilities.  Yet the fundamental structure of work has not kept pace with the changing American family, and many families are struggling to balance obligations at home and on the job. As a result, too many workers are unable to take the time they need to recover from an illness. Many workers will go to work sick, putting their coworkers and customers at risk of illness. Many parents are forced to choose between taking an unpaid day off work—losing much needed income and potentially threatening their jobs—and sending a sick child who should be home in bed to school.

Today, the President will sign an Executive Order requiring federal contractors to offer their employees up to seven days of paid sick leave per year.  He will travel to Boston to renew his call on Congress to pass legislation expanding paid sick and family leave, and announce new Department of Labor rules giving federal contract workers new tools to demand equal pay. Last November, Massachusetts voters overwhelmingly approved a new paid sick leave law that went into effect statewide on July 1, and in April the Boston City Council passed an ordinance creating six weeks of paid parental leave for City of Boston employees.

Today’s actions build on a number of previous steps taken by the President to expand access to paid leave. In January, he issued a Presidential Memorandum directing the federal government to advance up to six weeks of paid sick leave in connection with the birth or adoption of a child, or for other sick leave eligible uses, and called on Congress to pass legislation giving federal employees six additional weeks of paid parental leave. The President’s FY 2016 budget also includes over $2 billion in funds to encourage states to establish paid family and medical leave programs that would ensure new parents can stay home to care for their children and allow for caregiving leave like eldercare or self-care related to a serious illness.

EXPANDING SICK LEAVE AND OTHER ACTIONS FOR WORKERS

1. Guaranteeing Sick Leave for Federal Contract Workers: An estimated 44 million private sector workers – about 40 percent of the total private-sector workforce – do not have access to paid sick leave.  Low- and middle-income workers are much less likely to have paid sick leave than high-income workers. While roughly 60 percent of workers are eligible under the Family and Medical Leave Act (FMLA) to take unpaid, job-protected leave for family and medical reasons for more extended absences, many workers are without coverage for shorter-term health care needs and others may not be able to afford to stay home sick if it means the loss of pay.

Just as importantly, a body of research shows that offering paid sick days and paid family leave can benefit employers by reducing turnover and increasing productivity.  Paid sick days would help reduce lost productivity due to the spread of illness in the workplace. These policies can benefit our economy by fostering a more productive workforce.

For this reason, it is no surprise that many businesses see the benefit of employees earning sick days. Many private sector employers have voluntarily changed their policies to expand paid leave for their employees, and in some cases, even for employees of their contractors and vendors. A survey of employers in Connecticut, which passed a law in 2011 requiring many employers to allow workers to earn sick leave, found that most businesses reported “no effects or modest effects of the new law on the bottom line.”

The Executive Order the President will sign today will:

• Give approximately 300,000 people working on federal contracts the new ability to earn up to seven days of paid sick leave each year. Additional workers will gain access to more sick leave than they had before. Beginning with new contracts in 2017, workers will earn a minimum of one hour of paid sick leave for every 30 hours worked (though contractors would be free to offer more generous amounts at their discretion);

• Allow workers to use paid sick leave to care for themselves, a family member, such as a child, parent, spouse, or domestic partner, or another loved one, as well as for absences resulting from domestic violence, sexual assault, or stalking;

• Improve the health and performance of employees of federal contractors and bring benefits packages offered by federal contractors in line with leading firms, ensuring they remain competitive in the search for dedicated and talented employees; and

• Protect the public health of employees of federal contractors, their customers, and clients by ensuring employees are allowed to stay home when they have communicable diseases.

2. Calling on Congress to Expand Leave to Millions More Workers: In addition to issuing today’s Executive Order, the President is renewing his call for Congress to pass the Healthy Families Act, which would require all businesses with 15 or more employees to offer up to 7 paid sick days each year. He is calling for the passage of federal legislation guaranteeing every working American paid family and medical leave to care for a new child, a seriously ill family member, or their own serious illness. The FAMILY Act is one such proposal. Additionally, the President is calling on states and cities to follow the example of Massachusetts and other leaders and pass similar laws expanding paid leave. The Department of Labor is also releasing a report, “The Cost of Doing Nothing,” that explores the costs to workers, families, businesses, and the nation of not taking action to expand paid family and medical leave to millions of workers without it today.

3. Strengthening Rights to Equal Pay: Women are the primary breadwinners in 40 percent of U.S. children, but the typical woman makes about 78 percent of what the typical man makes – which means less for families’ everyday needs, less for investments in our children’s futures, and, when added over a lifetime of work, substantially less for retirement. The President is announcing that this week the Department of Labor will publish a final rule prohibiting federal contractors from discriminating against employees and job applicants who choose to discuss their compensation. The rule – issued under an April 2014 Executive Order – does not compel workers to discuss pay. However, it provides a critical tool to encourage pay transparency, and make it easier for workers to recognize pay discrimination and seek appropriate remedies.

BUILDING ON A RECORD OF GROWING THE MIDDLE CLASS

Providing families the security of paid leave is just one piece of the President’s plan to support America’s workers and grow the middle class. The President believes that all Americans should have the opportunity to succeed in our global economy and all working families should be able to afford the cornerstones of economic security. Middle class economics has helped to make America stronger over the past six years, with our businesses creating 13.1 million new jobs over a record 66 straight months of job growth. President Obama is pursuing policies that will ensure a growing economy — one with opportunities for employment, higher wages, higher incomes, fairer pay for women, workplace flexibility for parents, affordable health insurance, and adequate retirement benefits.

Overtime

• In June, the President announced that the Department of Labor would propose extending overtime pay protections to almost 5 million workers through a rule that would entitle most salaried workers earning less than a projected $50,400 next year to the Fair Labor Standards Act’s overtime protections. The proposed rule will prevent a future erosion of overtime rights and ensure greater predictability by automatically updating the salary threshold in the future. It will help promote higher take-home pay and allow workers to better balance their work and family obligations. In so doing, it will help shore up the middle class and provide an easier pathway for those aspiring to share in the standard of living it affords.

Higher Wages

• President Obama has called on Congress to raise the national minimum wage, and took action by signing an Executive Order to raise the minimum wage to $10.10 for workers on covered federal contracts. Since early 2013, when the President first called for a minimum wage increase, 17 states and the District of Columbia have passed increases to their minimum wage, which benefit an estimated 7 million workers as of 2017. Many other cities and localities, such as Chicago, Los Angeles, and Louisville, have also passed minimum wage increases, while businesses across the country have taken steps on their own to raise wages for their workers.

Tax Cuts for the Middle Class

• In his first term, President Obama cut taxes for the average middle-class family by $3,600. The American Taxpayer Relief Act, which President Obama signed into law in 2012, permanently lowered income tax rates for 98 percent of American workers.

• President Obama enacted improvements to the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC) that are helping 16 million working families make ends meet, and he continues to fight to make them permanent.

College Affordability

• Over the past six years, the President and Congress have provided millions of low- income and middle class families across the country access to college by increasing the maximum Pell Grant award by $1,000, and total funding by 70 percent.

• Families putting a child through college became eligible for as much as $10,000 of additional help over four years from the President’s American Opportunity Tax Credit, the equivalent of nearly a 30-percent discount on tuition at a typical state university.

• Taken together, these scholarships will provide students and families $50 billion in aid next year to help them afford college.

Equal Pay

• The first bill President Obama signed into law was the Lilly Ledbetter Fair Pay Restoration Act, which empowers women to recover wages lost to discrimination by extending the time period in which an employee can file a claim. The President continues to advocate for passage of the Paycheck Fairness Act, common sense legislation that would give women additional tools to fight pay discrimination.

• In April 2014, the President signed two executive actions strengthening equal pay laws: the Executive Order behind this week’s final rule prohibiting federal contractors from discriminating against employees and job applicants who choose to discuss their compensation, and a Presidential Memorandum instructing the Secretary of Labor to propose a rule requiring federal contractors to submit summary data on compensation paid to their employees and to use such data to enhance enforcement.

Workplace Flexibility

• In June 2014, the White House held the first-ever Summit on Working Families, elevating a national conversation about making today’s workplaces work for everyone, and signed a Presidential Memorandum to enhance workplace flexibilities and work-life balances for federal employees.

Promoting Fair Pay and Safe Workplaces

• In July 2014, President Obama signed an Executive Order that helps agencies better take into account prospective federal contractors’ records of compliance with key labor and employment laws when awarding contracts. It also ensures that federal contract workers are given the necessary information each pay period to verify the accuracy of their paycheck, and that workers who may have been sexually assaulted or had their civil rights violated get their day in court by putting an end to certain mandatory arbitration agreements.

Affordable Health Insurance

• Five years ago, the Affordable Care Act became law — opening the doors to affordable, quality health insurance for millions of people. Today:

   

  • More than 16 million Americans have gained health coverage,
  • Up to 30 million young adults can no longer be denied coverage or charged higher premiums for a pre-existing condition,
  • 105 million Americans no longer have a lifetime limit on their health coverage,
  • 137 million Americans are guaranteed preventive care coverage, and
  • The nation’s uninsured rate now stands at its lowest level ever.

Security in Retirement

• In February 2015, the Department of Labor published a proposed rule protecting retirement savers by ensuring that investment advisors are free from conflicts that prevent them from acting in the best interests of their clients. This is a commonsense rule that protects those saving for retirement from being steered into investments that are in their advisors’ financial interest but not theirs.