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Study: Paid family leave hasn’t burdened business

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The California Paid Family Leave Law that went into effect in 2004 hasn’t increased employer costs or hurt productivity as critics once predicted, according to a new study by researchers at UCLA, the City University of New York and the nonprofit Center for Economic and Policy Research.

And while the Paid Family Leave Law’s predicted economic downsides haven’t materialized, it has provided significant economic, social and health benefits for both male and female employees.

The law provides eligible employees up to six weeks of wage replacement leave at 55% of their usual weekly earnings (up to a maximum benefit of $987 per week in 2011) when they take time off from work to bond with a new child or to care for a seriously ill family member.

Before the law was enacted, business groups worried that it would impose extensive new costs on employers and pose a particularly serious burden on small businesses. But surveys conducted within the past year found most employers reporting that it has had little impact on their business operations.

In fact, most employers report that paid leave has had either a “positive effect” or “no noticeable effect” on productivity (89%), profitability/performance (91%), turnover (96%) and employee morale (99%). Small business reported almost identical numbers.

Asked if paid family leave had resulted in “any cost increases,” 86.9% of employers said it hadn’t.

For details on the research, see www.cepr.net/index.php/publications/reports/leaves-that-pay.

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