Order Code RL34088
Leave Benefits in the United States
Updated July 27, 2007
Linda Levine
Specialist in Labor Economics
Domestic Social Policy Division

Leave Benefits in the United States
Summary
In addition to their jobs, workers have obligations — civic, familial, and
personal — to fulfill that sometimes require them to be absent from the workplace
(e.g., to serve on a jury, retrieve a sick child from day care, or attend a funeral). The
U.S. government generally has allowed individual employers to decide whether to
accommodate the nonwork activities of employees by granting them leave, with or
without pay, rather than firing them. In other countries, national governments or the
international organizations to which they belong more often have developed social
policies that entitle individuals to time off from the workplace (oftentimes paid) for
a variety of reasons (e.g., maternity and vacations).
Public policies specifically intended to reconcile the work and family lives of
individuals have garnered increased attention among countries in the Organization
for Economic Cooperation and Development (OECD). In the United States, which
is an OECD member, congressional interest recently has coalesced around family-
friendly paid leave proposals (e.g., H.R. 1542 and S. 910, S. 1681, S. 80 and H.R.
3158). They would entitle workers to time off with pay to accomplish parental and
caregiving obligations to help women in particular balance work and family
responsibilities because they are the typical family caregiver and a majority of
women in the U.S. population are in the labor force.
Currently, there are few federal statutes that pertain directly or indirectly to
employer provision of leave benefits for any purpose. This report begins by
reviewing those policies, including the Pregnancy Discrimination Act and the Family
and Medical Leave Act. Temporary Disability Insurance (TDI) programs, which five
states have established to compensate for lost wages while workers are recovering
from nonoccupational illnesses and injuries, are discussed as well. So too is
California’s Family Disability Insurance program, which extends TDI to employees
caring for family members.
The report then examines the incidence of different types of paid leave that U.S.
employers voluntarily provide as part of an employee’s total compensation (wages
and benefits). For example, vacations and holidays are the most commonly offered
leave benefits: more than three-fourths of employees in the private sector receive
paid time off for these reasons. Access to leave by various employee and employer
characteristics also is analyzed, with particular attention focused on paid sick leave,
which is offered to 57% of private sector employees.
The report closes with results from a federal government survey of the average
direct cost to businesses of different types of leave. Indirect employer costs that
might arise in connection with some types of leave more than others, such as the
greater likelihood of hiring and training temporary replacements for employees
absent because of maternity versus bereavement reasons, are not included. Neither
are estimates of potential gains to employers (e.g., a more stable and experienced
workforce, increased productivity due to greater worker morale) and society (e.g.,
improved public health, lower formal caregiving costs, and broader participation in
civic affairs).

Contents
Federal Laws Pertaining to Leave . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
The Fair Labor Standards Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Federal Contractor Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Temporary Disability Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Anti-Discrimination Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
TDI and Family Leave . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
The Family and Medical Leave Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
The Birth and Adoption Unemployment Compensation Plan . . . . . . . . . . . 10
The Incidence and Cost of Leave Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Incidence by Employee and Employer Characteristics . . . . . . . . . . . . . . . . 12
In the Private Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Among Working Parents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
A Detailed Look at Paid Sick Leave . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Cost to Employers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Concluding Remarks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
List of Tables
Table 1. Percent of Workers with Paid Leave Benefits by Employee
and Employer Characteristics, March 2006 . . . . . . . . . . . . . . . . . . . . . . . . . 14
Table 2. Percent of Workers with Paid Sick Leave by Selected
Demographic Characteristics, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Table 3. Percent of Workers with Paid Sick Leave by Industry, 2004 . . . . . . . . 18
Table 4. Percent of Workers with Paid Sick Leave by Education, 2004 . . . . . . 19
Table 5. Percent of Workers with Paid Sick Leave by Occupation, 2004 . . . . . 20
Table 6. Earnings of Workers with Paid Sick Leave by Earnings, 2004 . . . . . . 21
Table 7. Employer Costs Per Hour Worked for Employee Compensation,
March 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Table 8. Employer Costs Per Hour Worked for Leave Benefits by Type of
Leave and Firm Size, March 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Leave Benefits in the United States
In addition to their jobs, workers have obligations — civic, familial, and
personal — to fulfill that sometimes require them to be absent from the workplace
(e.g., to serve on a jury, retrieve a sick child from day care, or attend a funeral). The
U.S. government generally has allowed individual businesses to decide whether to
accommodate the nonwork activities of employees by granting them leave (with or
without pay) rather than firing them. In other countries, national governments or the
international organizations to which they belong more often have developed social
policies that entitle individuals to take time off from the workplace for a variety of
reasons.1 For example, workers in countries that are part of the European Union have
a minimum vacation benefit with pay of some 20 days per year; in Spain, employees
can take paid time off to perform jury service among other civic duties;2 and 169
countries guarantee women leave with income in connection with childbirth.3
Policies specifically intended to reconcile the work and family lives of
individuals — which include leave benefits, child-care subsidies, and flexible work
arrangements — have garnered increased attention in the 30-member Organization
for Economic Cooperation and Development (OECD).4 In the United States, which
is an OECD member, congressional interest recently has coalesced around family-
friendly paid leave proposals. They would entitle individuals to time off with pay
to accomplish parental and caregiving obligations (e.g., bonding with a newborn or
newly placed adopted child or assisting a seriously ill spouse). Because
1 These entitlements may be part of a country’s social security or labor laws. The statutes
may be supplemented by provisions in collective bargaining agreements. See, for example
Antoine Math and Christele Meilland, Family-Related Leave and Industrial Relations,
European Industrial Relations Observatory On-Line, 2004, available at [http://www.euro
found.europa.eu/eiro/2004/03/study/tn0403101s.html].
2 Rebecca Ray and John Schmitt, No-Vacation Nation, Washington, DC: Center for
Economic and Policy Research, May 2007.
3 Jody Heymann, Alison Earle and Jeffrey Hayes, The Work, Family, and Equity Index: How
Does the United States Measure Up?
, Montreal, QC: Project on Global Working Families,
2007, available at [http://www.mcgill.ca/files/ihsp/WFEI2007FEB.pdf].
4 OECD, Boosting Jobs and Incomes: Policy Lessons from Reassessing the OECD Jobs
Strategy
, Paris, FR: OECD Publishing, 2006. OECD member countries are Australia,
Austria, Belgium, Canada, the Czech Republic, Denmark, Finland, France, Germany,
Greece, Hungary, Iceland, Ireland, Italy, Japan, Korea, Luxembourg, Mexico, the
Netherlands, New Zealand, Norway, Poland, Portugal, the Slovak Republic, Spain, Sweden,
Switzerland, Turkey, the United Kingdom, and the United States.

CRS-2
! women are the typical informal (unpaid) caregivers to family and
friends,5 and
! a majority of women in the U.S. population are in the workforce,
with both husbands and wives employed in about one-half of
married-couple families,6
women are regarded as the chief beneficiaries of these proposals. Two approaches
have been proposed in Congress to guarantee workers the right to take paid leave to
attend to family and medical needs: an employer mandate (e.g., H.R. 1542/S. 910,
S. 80 and H.R. 3158) and a temporary disability insurance program (e.g., S. 1681).7
While “[d]uring the past two decades, the generosity of paid parental leave has
increased in all OECD countries, with the exceptions of Ireland, the United Kingdom
and several countries with no legislation mandating paid leave [such as the United
States],”8 the organization remains focused on leave and other policies thought to
ameliorate work-family conflict. Its continuing interest in encouraging more women
to participate in the labor force is partly motivated by concern about the impact of
population aging on the future labor supply in member nations. The economic
rationale underlying paid family leave is that it will increase the amount of labor
supplied by women with child care (and increasingly elder care) obligations and
thereby mitigate the slowdown in labor force growth overall. In the United States,
the end of years of escalating labor force participation by married mothers, especially
mothers of infants,9 is overlaid on the fear of an impending labor shortfall because
of its aging population.10
5 Women represent 60% of informal caregivers to family and friends age 18 and older,
according to Caregiving in the United States, 2004, by the National Alliance for Caregiving
and AARP. For information on women who care for children and parents, see Charles R.
Pierret, “The ‘Sandwich Generation:’ Women Caring for Parents and Children,” Monthly
Labor Review
, September 2006.
6 U.S. Bureau Statistics data available at [http://stats.bls.gov/cps/cpsaat2.pdf] and
[http://stats.bls.gov/news.release/pdf/famee.pdf].
7 More specifically, the Healthy Families Act (H.R. 1542/S. 910) would require covered
employers to give eligible employees seven days of leave with pay to care for their own
health or the health of family members, and the Family Leave Insurance Act (S. 1681)
would establish a Family Leave Insurance Fund through a payroll tax on employees and
employers to partially compensate workers on job-protected leave for reasons allowed under
the Family and Medical Leave Act. S. 80 and H.R. 3158 would add parental leave to the
time off benefits currently available to employees of the federal government.
8 OECD, OECD Employment Outlook 2006: Boosting Jobs and Incomes, Paris, FR: OECD
Publishing, 2006, p. 130.
9 Sharon R. Cohany and Emy Sok, “Trends in Labor Force Participation of Married Mothers
of Infants,” Monthly Labor Review, February 2007.
10 For additional information on a demographically-induced labor shortage in the United
States see CRS Report RL33661, Retiring Baby-Boomers = A Labor Shortage?, by Linda
Levine.

CRS-3
This report begins by reviewing U.S. government regulation of time off from
work for any purpose. It then examines the incidence of paid leave benefits
voluntarily provided by U.S. firms. Access to paid leave by various employee and
employer characteristics also is analyzed. Estimates from a government survey of the
direct cost to U.S. businesses of the different types of leave offered are presented as
well. Indirect employer costs that might arise in connection with some types of leave
more than others, such as the greater likelihood of hiring and training temporary
replacements for employees absent because of maternity versus bereavement reasons,
are not included. Neither are estimates of potential gains to companies (e.g., a more
stable and experienced workforce and increased productivity due to greater worker
morale) and society (e.g., improved public health, lower formal caregiving costs, and
broader participation in civic affairs).
Federal Laws Pertaining to Leave
By-and-large, the U.S. government does not require employers to offer
employees nonwage compensation, that is, benefits (e.g., health insurance, retirement
plans, and leave). The few employment-based benefits that Congress has mandated
are social security, unemployment compensation, workers’ compensation, and most
recently, unpaid family-medical leave. An overview follows of past and present
federal laws and regulations that relate to time off from work.
State statutes may require the provision of leave beyond that in federal law.
Employers and unions may negotiate paid time off as a supplement to wages in
collective bargaining agreements. Complete coverage of leave benefits that originate
from these non-federal sources is beyond the scope of this report.
The Fair Labor Standards Act
The primary law setting standards for wages paid to and hours worked by most
employed persons in the United States is the Fair Labor Standards Act (FLSA).
Although people often think that the act regulates time not worked, the FLSA largely
is silent on the subject.11 It does not require that firms provide employees time off
for breaks (e.g., to use a bathroom),12 meals,13 illness, holidays, and the like.
Although the FLSA applies to both the private and public sectors, federal
employees are entitled to “legal holidays” with pay as prescribed by the Office of
11 Under the FLSA, workers must be paid for short rest breaks but not for meal breaks that
employers voluntarily provide.
12 The Occupational Safety and Health Administration in a 1998 memorandum interpreted
the sanitation standard for general industry (29 CRF 1910.141(c)(1)(i): Toilet Facilities)
to mean that companies must make toilet facilities available to employees and allow
individuals timely access to them.
13 Some states have laws that require businesses to give time off for meals or other breaks
during the workday. Some municipalities also have laws, regulations or guidelines that
address meals or other breaks.

CRS-4
Personnel Management under Title 5 of the U.S. Code. Holidays also may be
designated in state and municipal laws or regulations. Private sector employers may
choose to follow the public sector’s holiday practices and pay their employees for the
time not worked. If businesses voluntarily close on holidays, firms can pay an
employee they require to work the employee’s usual hourly wage rate because the
FLSA does not distinguish holidays from any other workday.
The FLSA does require employees to be paid more than their regular hourly
wage rate in another instance, namely, “overtime work.” It is in connection with
overtime that the act has become part of the debate over worktime flexibility to
accommodate the family responsibilities of employees. The FLSA was enacted in
1938 during a period of extraordinarily high unemployment. Payment at one-and-
one-half times an employee’s standard hourly rate for working more than 40 hours
in a week thus was required of companies as a penalty for extending the workweek
of current employees rather than hiring unemployed persons. About 50 years later,
Congress allowed employers in one industry — federal, state and local government
— to offer employees time off in lieu of the overtime pay they had earned.14 That
is to say, a government can offer its workers the option of taking leave in the future
rather than immediately compensating them for overtime worked. Those who want
to extend “comp-time” to the private sector began in the 1990s to put the worktime
arrangement in a family friendly context by arguing that it would afford workers the
opportunity to accumulate hours they could later take off for caregiving or any other
reason “if the use of the compensatory time does not unduly disrupt the operations
of the employer.”15
Federal Contractor Legislation
In the Davis-Bacon Act of 1931 and Service Contract Act of 1965, Congress
required that certain contractors pay at least prevailing wages and benefits to their
workers employed on federal and federally assisted construction and service projects.
The Wage and Hour Division in the U.S. Department of Labor (DOL) develops
“wage determinations.” They list the wage rates and fringe benefit rates DOL
determines are prevailing in a given area for particular jobs. Paid sick, vacation, and
holiday leave are among the benefits that can be included in a wage determination.16
Temporary Disability Insurance
No nationwide program exists that compensates individuals for wages lost while
they are absent from the workplace due to short-term health conditions (e.g.,
childbirth, the flu) or injuries unrelated to employment.
14 1985 amendments to the FLSA, P.L. 99-150.
15 H.R. 1119, Family Time Flexibility Act, Report No. 108-127, 108th Cong., 1st Sess., March
6, 2003. For additional information see CRS Report RL31875, Compensation Time vs. Cash
Wages: Amending the Fair Labor Standards Act?
, by William G. Whittaker.
16 See [http://www.dol.gov/esa/programs/dbra/faqs/fringes.htm].

CRS-5
It was during the severe depression of the thirties that the United States began its
national social insurance programs of unemployment insurance and old-age
insurance. Consequently, providing protection against costs of sickness that are
more or less recurring regardless of economic conditions did not seem to have
the same urgency as providing protection against cyclical unemployment and old-
age dependency.17
In 1946, however, the Federal Unemployment Tax Act was amended to allow
states in which employees contribute to their unemployment insurance programs to
use those contributions toward cash payments for persons unable to work as a result
of temporary nonoccupational illnesses or injuries.18 California, New Jersey, New
York, and Rhode Island passed Temporary Disability Insurance (TDI) laws during
the 1940s. Two additional jurisdictions — Hawaii and Puerto Rico — enacted TDI
legislation in the late 1960s.
Today, employees and employers contribute to four of the jurisdictions’ social
insurance programs. Rhode Island and California continue to rely on only employee
payroll deductions. The governments usually do not make contributions.19
Both employed and unemployed workers may receive TDI benefits. How this
is accomplished varies among the jurisdictions depending in part on whether
employers are allowed to substitute a private insurance plan for a state-operated plan.
Most employees in the private sector are covered because the laws generally apply
to businesses with one or more workers. Jurisdictions may cover their own
government employees and the self-employed as well. The value of payments and
their duration also differ by jurisdiction. In addition, the way in which TDI benefits
are coordinated with employer-provided paid sick leave and other accrued leave
benefits varies.20
The TDI laws do not require employers to retain individuals on their payrolls
while receiving benefits.21 However, employers must comply with other laws that
regulate treatment of employees experiencing short-term nonwork disabilities.
Anti-Discrimination Legislation. The Pregnancy Discrimination Act of
1978 (PDA, P.L. 95-555), which amended Title VII of the Civil Rights Act of 1964,
makes it illegal for employers with 15 or more employees to fire, refuse to hire, or
17 Chapter on Temporary Disability Insurance from the Social Security Administration’s
1997 publication, Social Security Programs in the United States, available at
[http://www.ssa.gov/policy/docs/progdesc/sspus/tempdib.pdf].
18 The Railroad Unemployment Insurance Act of 1938 also was amended in 1946 to
establish a short-term disability program. It is operated by the federal government.
19 Social Security Administration, Annual Statistical Supplement, 2006, available at
[http://www.socialsecurity.gov/policy/docs/statcomps/supplement/2006/tempdisability.pdf].
20 Ibid. See also [http://www.workforcesecurity.doleta.gov/unemploy/pdf/temporary.pdf].
21 Additional information on individual state’s TDI plans can be found at [http://www.edd.
ca.gov/diind.htm], [http://www.hawaii.gov/labor/dcd], [http://www.state.nj.us/labor/tdi/tdi
index.html], [http://www.wcb.state.ny.us/content/main/offthejob/IntroToLaw_DB.jsp], and
[http://www.dlt.ri.gov/tdi/].

CRS-6
withhold a promotion because an individual is pregnant. The act further prohibits
these employers from treating women who are limited in their ability to work because
of pregnancy, childbirth, or related health conditions differently from other
employees experiencing disabling medical conditions unrelated to work. If a firm
has a policy permitting temporarily disabled employees to take sick leave, then it
must allow a woman unable to perform her job due to pregnancy or childbirth to take
leave on the same terms.22 Thus, a firm “must hold open a job for a pregnancy-
related absence the same length of time jobs are held open for employees on sick or
disability leave.”23
Title VII and the Americans with Disabilities Act of 1990 do not require
employers to provide leave to employees to attend to their own short-term illnesses.
They also do not require employers to offer employees time off to care for sick family
members. But, as in the case of a company with sick or disability leave benefits, a
firm that has instituted a family leave policy is prohibited from administering it in a
discriminatory manner.24 For example, men and women must be afforded the same
opportunity to take the same amount of time off to care for their children under an
employer’s family leave plan.
Taking action against “family responsibilities discrimination” may be difficult,
however, because “Congress has never prohibited discrimination based on caregiver
status so such claims must be “indirect” applications of existing prohibitions against
sex bias, disability discrimination, and unequal pay.”25 As recently as May 2007, the
Equal Employment Opportunity Commission released clarifying guidance that
addresses unlawful disparate treatment founded on sex-based stereotyping of
pregnant workers and of employees who are family caregivers, disparate treatment
of employees caring for family members with disabilities, and harassment that creates
a hostile work environment for employees providing family care.26
Relatedly, differences across states in leave benefit laws may make multistate
companies susceptible to discrimination complaints for interfering with the rights of
employees. For example, California’s Family Sick Leave (Kin Care) law requires all
employers in the state that offer paid sick leave to allow employees to use some of
their time off to care for sick children, parents, spouses or domestic partners.27 But,
in Minnesota, employers with at least 21 employees must permit them to use their
22 Chapter XIV — Equal Employment Opportunity Commission, 29 CFR Part 1604.10.
23 See [http://www.eeoc.gov/types/pregnancy.html].
24 See [http://www.eeoc.gov/policy/docs/fmlaada.html].
25 Kevin P. McGowan, EEOC Hears Discussion of Bias Claims Based on Employees’
Family Obligations,” Daily Labor Report, April 18, 2007. As reported in the Daily Labor
Report
( “Teleconference Speakers Share Insights for Stemming Tide of Family Rights
Claims,” April 16, 2007), only Alaska and the District of Columbia have laws that explicitly
prohibit discrimination based on an employee’s family responsibilities.
26 See [http://www.eeoc.gov/policy/docs/qanda_caregiving.html].
27 See [http://www.fehc.ca.gov/act/law.asp].

CRS-7
personal sick leave to care for sick children.28 Such variability in leave policies also
means that families have quite different options depending on the state in which they
live.
TDI and Family Leave. In 2002, California became the first state to mandate
a paid family leave benefit by establishing Family Temporary Disability Insurance,
commonly known as Paid Family Leave (PFL) insurance.29 Beginning in mid-2004,
both male and female workers could take paid time off to bond with their new
biological, adopted, or foster children. In addition, they became entitled to wage
replacement while absent from work to care for seriously ill children, parents,
spouses, or domestic partners. Employers may require workers to use a maximum of
two weeks of accrued vacation time before drawing payments from the insurance
fund. Like the state’s TDI program, employers must make deductions from the
wages of employees to pay for PFL. The deductions are deposited in the state’s
disability fund.
PFL must be taken concurrently with the maximum of 12 weeks of unpaid
family-medical leave available to eligible employees of covered employers under the
California Family Rights Act (CFRA). The act was passed in 1991 and amended in
1993 to conform to federal legislation discussed immediately below. The most
noteworthy differences between CFRA and PFL/TDI are that the former provides
workers at firms with at least 50 employees unpaid time off with the right to
continued health benefit coverage and guaranteed reinstatement to the same or a
comparable job; the latter provides almost all employees cash benefits during their
short-term absence but not job protection.
Many more states have mandated the unpaid job-protected approach to family-
medical leave found in the CFRA than have adopted the insurance approach. Some
35 states and the District of Columbia either proposed or passed unpaid job-protected
leave legislation shortly after the first family-medical leave bill was introduced in
Congress in 1985.30
28 CRS Report RL33710, State Family and Medical Leave Laws, by Jon O. Shimabukuro,
Cassandra L. Foley, and Tara Alexandra Rainson. (Hereafter cited as CRS Report
RL33710, State Family and Medical Leave Laws.)
29 Other jurisdictions have since passed or are considering paid family leave legislation. For
example, in 2007, Washington enacted a family leave insurance program that will
compensate eligible workers at firms with at least 25 employees who take job-protected
leave in connection with the birth or adoption of a child. Benefit payments will become
available on October 1, 2009, pending submission to the legislature of a task force’s
recommended financing plan and passage of implementing legislation by January 1, 2008.
In addition, New Jersey and New York are considering paid family leave legislation.
30 Janine A. Parry, “Family Leave Policies: Examining Choice and Contingency in
Industrialized Nations,” NWSA Journal, vol. 13, no. 3, Fall 2001.

CRS-8
The Family and Medical Leave Act
Congress passed and President Clinton signed the Family and Medical Leave
Act (FMLA, P.L. 103-3) in 1993. The federal law entitles eligible employees at
covered employers to leave without pay for the following reasons:
! the birth of a child of the employee and to care for the newborn
child,
! the placement with the employee of a child for adoption or foster
care and to care for the newly placed child,
! to care for an immediate family member (i.e., spouse, child under
age 18 or any age if incapable of self-care due to an activity-limiting
disability, or parent) with a serious health condition that necessitates
the employee’s presence,31 or
! to care for the employee’s own serious health condition (including
maternity-related disability) that makes the employee unable to
perform the functions of his/her position.
The latest Labor Department survey shows that the predominant reason for
leave-taking under the FMLA in 1999-2000, at 49%, was to attend to the employee’s
own health (including maternity-related disability). Caregiving for newborn, newly
adopted, or newly placed foster children followed at almost half the rate. About the
same fraction of FMLA leave-takers used their time off to care for ill family
members.32
Employees who take leave under the act are generally guaranteed the right to
reemployment in the same or comparable positions. Employers cannot retaliate
against workers for taking FMLA leave by, for example, firing them. But, employers
are allowed to terminate leave-takers for legitimate business reasons (e.g., the duties
of the unit in which the employee works are outsourced).
Private sector firms that had 50 or more employees on their payrolls for at least
20 workweeks in the current or preceding calendar year must allow employees to take
leave under the act if the employees worked for them at least 12 months, a minimum
of 1,250 hours, and at a facility where at least 50 employees are employed by the firm
31 The term “serious health condition” is defined at 29 C.F.R. Part 825 as an illness, injury,
or mental or physical condition that involves any period of incapacity or treatment
connected with inpatient care in a hospital, hospice, or residential mental facility; a period
of incapacity requiring absence of more than three consecutive days from work, school, or
other regular daily activities that also involves continuing treatment by or under the
supervision of a health care provider; any period of incapacity due to pregnancy or prenatal
care; a period of incapacity that is permanent or long-term due to a chronic condition for
which treatment may not be effective; or any absences to receive multiple treatments (or
recovery therefrom) by a health care provider for a condition that likely would result in
incapacity of more than three consecutive days if left untreated.
32 CRS Report RL30893, Explanation and Experience Under the Family and Medical Leave
Act
, by Linda Levine.

CRS-9
within 75 miles. Regardless of their size, public sector employers (e.g., federal and
local governments, Congress and its agencies) also must provide FMLA leave.33
The act’s 12 workweeks of leave in a 12-month period, firm-size threshold, and
reasons for leave are minimum standards. Employees who work for employers that
offer or are covered by collective bargaining agreements that include more expansive
family-medical leave, or who work in jurisdictions that have enacted more
comprehensive statutes are entitled to the more generous benefits.34
The 12 workweeks of leave need not be taken consecutively. Employees caring
for their own serious health condition or that of an eligible family member can take
time off intermittently or work a reduced schedule (e.g., a shortened workday).
Employees must obtain their employer’s agreement if they want to take leave
intermittently or work a reduced schedule in the case of the two other FMLA-
qualifying reasons.
Employees may elect, or employers may require them, to use accrued paid
vacation time or personal leave for the act’s unpaid leave. The substitution of paid
family or sick leave is subject to the employer’s policy concerning the use of these
benefits.
The FMLA differs from TDI by being national in scope, providing more reasons
for leave,35 continuing health benefit coverage for absent workers, and guaranteeing
job security. The TDI programs, for their part, provide cash benefits and do not have
firm-size exclusions. Employees drawing TDI benefits cannot be terminated,
however, if they have not exhausted their entitlement to leave under the FMLA or
comparable state laws. Analogously, employees receiving cash payments under
California’s PFL program while caring for newborn, newly adopted, or newly placed
children and while caring for children, spouses, or parents cannot be terminated while
still entitled to leave under the FMLA or CFRA.
33 Bills have proposed changes to the firm-size threshold among other provisions of the act.
For additional information see CRS Report RL31760, The Family and Medical Leave Act:
Recent Legislative and Regulatory Activity
, by Linda Levine.
34 For example, the Oregon Family Leave Act requires employers with at least 25
employees to provide job-protected leave to employees after the birth or adoption of a child;
to care for an ill or injured child who requires home care; to care for a spouse, parent, child,
parent-in-law, or domestic partner with a serious health condition; and for pregnancy-related
disability. As recently as June 2007, the Oregon legislature amended the statute to require
that employers allow employees to use their paid sick leave for leave taken under the act;
previously, use of sick for family leave was a matter of employer policy. See also CRS
Report RL33710, State Family and Medical Leave Laws, and [http://www.dol.gov/esa/
programs/whd/state/fmla/index_PF.htm].
35 Only California’s TDI program in combination with its PFL program provides reasons for
leave comparable to those under the FMLA.

CRS-10
The Birth and Adoption Unemployment Compensation Plan
President Clinton directed the Department of Labor (DOL) to propose
regulations enabling states to utilize tax dollars accumulated in the federal-state
Unemployment Compensation (UC) program to partially replace the wages of parents
who opt to take time off to bond with their newborn or newly adopted children. The
purpose of the Birth and Adoption Unemployment Compensation (BAA-UC)
experiment, popularly known as Baby UI, was to allow DOL to determine if the
availability of cash benefits to working parents within 52 weeks of the birth or
placement for adoption of a child encourages long-term attachment to the labor
force.36
Unlike the FMLA, BAA-UC leave was not guaranteed nationwide and
employers did not have to retain employees receiving BAA-UC unless they were also
FMLA-eligible. The reasons for leave under BAA-UC were much narrower than
under the FMLA as well. Alternatively, the firm-size requirements of the FMLA did
not apply to BAA-UC, which was guided by the much broader employer coverage
of the UC program.
DOL included model state legislation in an appendix to the BAA-UC
regulations, which went into effect in mid-2000. The model Baby UI bill envisioned
the availability of BAA-UC for a maximum of 12 weeks, and the time not worked
would be counted toward the maximum duration of unemployment benefits. It also
assumed that states would base the amount of BAA-UC benefits on the same criteria
(earnings and employment histories) as their individual UC programs and would
deduct other income (e.g., employer-provided paid sick or family leave and the value
of employer contribution to disability insurance) from BAA-UC payments.
In commentary attached to the regulation, DOL noted that it was not imposing
solvency requirements on states before their enactment of BAA-UC. The department
stated its expectation that states would not initiate BAA-UC without first examining
the impact on the solvency of their UC trust funds.
In late 2003, the Bush Administration rescinded BAA-UC as part of a review
of all DOL regulations. The review was undertaken in the context of a recession
having led to much reduced balances in state UC funds and a challenge in federal
district court to the consistency of BAA-UC with federal UC law.37 The Bush
Administration declared BAA-UC to be “a misapplication of federal UC law relating
to the A&A requirements,” which state that a person must be able and available for
suitable work to be eligible for unemployment benefits.38 It disagreed with the
Clinton Administration’s explanation of the BAA-UC rule as “part of an evolving
interpretation of the A&A requirements that recognizes practical and economic
realities” (e.g., not terminating or denying UC benefits to individuals while they are
36 65 FR 114 (June 13, 2000), p. 37210.
37 See LPA, Inc. v. Chao, 211 F.Supp. 2d 160 (D.D.C. 2002) (dismissed on procedural
grounds).
38 67 FR 233 (December 4, 2002), p. 72122.

CRS-11
awaiting recall to the firms that temporarily laid them off).39 The Bush
Administration declared that
the intended recipients of BAA-UC generally do not meet this test as they have
initiated their separation from the workforce and it is their personal situation,
rather than the lack of available work, that has removed them from the labor
market. Because the BAA-UC experiment is based on an assumption of
increased future labor force attachment, the payment of BAA-UC will likely be
made for periods where parents have completely suspended their labor force
attachment. Indeed, in cases where the parent is on approved leave from a job,
BAA-UC more closely resembles a paid-leave program than a UC program.40
It further stated that “Congress intended the UC system to be subordinate to the main
task of getting people back to work.... BAA-UC is not consistent with this goal since
it encourages parents to refuse available work.”41
Some 24 Baby-UI bills were introduced in 20 states in 2001, the year after the
BAA-UC regulation became effective.42 But, no state had passed legislation before
the regulation was removed in November 2003.
In light of the inaction of states while the BAA-UC regulation was in effect and
the handful of states with TDI laws, they appear reluctant to require family-medical
leave benefits by taking either an approach based on unemployment or disability
insurance. The belief that higher taxes paid by companies located in states that adopt
either approach — arguably putting them at a competitive disadvantage with firms
in non-adopting states — might contribute to this reluctance on the part of individual
states. The UC program is largely financed through state and federal payroll taxes
of employers. And, three of the five states with TDI programs partly finance them
through a payroll tax on employers.
The Incidence and Cost of Leave Benefits
Unlike the abundant data on wages and salaries, less information is available on
the benefits paid to workers. At present, benefits account for 30% of the total
compensation (wages and benefits) of employees in the civilian economy.43 Leave
benefits — which represent 7% of total compensation — receive short shrift
compared to the information on some other supplements to wages voluntarily
provided by employers. For example, the government’s primary survey of the labor
force — the Current Population Survey (CPS) — does not ask households about time
39 65 FR 114 (June 13, 2000), p. 37213.
40 67 FR 233 (December 4, 2002), p. 72122.
41 68 FR 196 (October 9, 2003), p. 58542.
42 Lauren Couillard, “Current State Family Leave Bills Contemplate Several Payment
Systems,” Daily Labor Report, September 17, 2001.
43 BLS, Employer Costs for Employee Compensation — March 2007, June 21, 2007. Private
households, farms, and the federal government are not surveyed.

CRS-12
off from work, while it does ask about health and retirement benefits. (These
benefits respectively account for almost 8% and over 4% of total compensation). As
a result, there is limited data on gender, age, and other demographic characteristics
of workers by employer provision of paid leave.
The U.S. Bureau of Labor Statistics (BLS) more often looks to employers for
information on benefits because they “typically furnish more reliable information
than households do on the details of employer-provided benefit plans and the
employers’ costs for providing those benefits.”44 The National Compensation Survey
(NCS) collects information from companies on benefit incidence as well as
compensation cost levels and trends. Firm size, as measured by the number of
employees, is one of the company characteristics for which the NCS obtains data.
Again, employer rather than household surveys are a better source of size
information. Although the NCS lacks demographic information on employees
receiving benefits, it does afford data by job characteristics (e.g., occupation,
industry, and earnings).
Some private firms conduct compensation surveys, but the results may be
proprietary, very expensive to access, or not representative of typical business
practices (e.g., if the survey covers primarily large corporations). For these reasons,
the analysis below is derived from the NCS, and to provide demographic
information, from the National Survey of America’s Families and the Medical
Expenditures Panel Survey. The latter two are nationally representative surveys of
noninstitutionalized households in the civilian population, similar to the CPS.
Incidence by Employee and Employer Characteristics
In the Private Sector. More than three-fourths of employees at firms in the
private sector are provided paid vacations and holidays, making these the most
widely available leave benefits. (See Table 1.) About seven of every ten workers
have access to paid funeral leave and time off for jury duty. Considerably fewer
employees in the private sector — 57% — have sick leave as part of their
compensation package. Companies continue to pay almost one-half of employees
who are absent from work to fulfill military obligations. About two in five workers
can take paid leave for personal reasons. Employers in the private sector offer paid
family leave to a very small percentage of their workers (8%).
As shown in Table 1 — regardless of the type of paid leave — it usually is true
that
! relatively more private sector employees in white-collar occupations
than blue-collar occupations or service occupations have access to
leave with pay;
! relatively more full-time than part-time workers receive paid leave;
44 Diane E. Herz, Joseph R. Meisenheimer II, and Harriet G. Weinstein, “Health and
Retirement Benefits: Data from Two BLS Surveys,” Monthly Labor Review, March 2000,
p. 4.

CRS-13
! relatively more union than nonunion employees have the opportunity
to take leave with pay; and
! relatively more higher than lower paid employees are provided leave
as part of their compensation package.
(See the box below for definitions of terms from the National Compensation Survey
used in the text and in Table 1.)
Definition of Terms in the National Compensation Survey
Private nonfarm sector: All industries except agriculture and public administration.

Occupations: White-collar occupations include management, professional, sales, and
office workers. Blue-collar occupations include craft and repair workers, machine
operators, transportation and material moving workers, and laborers. Service occupations
include food, cleaning, personal, health, and protective service workers.

Full-time/part-time: The employer’s definition of full- and part-time status is used.

Establishment: An establishment usually is a single physical location at which goods or
services are produced or administrative services are performed. A company, firm, or
employer (used interchangeably) can consist of one or more establishments.

Industries: Nonfarm goods-producing industry groups are natural resources and mining;
construction; and manufacturing. Private service-producing industry groups are
wholesale and retail trade; transportation and utilities; information; financial activities;
professional and business services; education and health services; leisure and hospitality;
other services (excluding public administration); and miscellaneous service industries.

Regions: New England (Connecticut, Maine, Massachusetts, New Hampshire, Rhode
Island, and Vermont), Middle Atlantic (New Jersey, New York, and Pennsylvania), East
North Central (Illinois, Indiana, Michigan, Ohio, and Wisconsin), West North Central
(Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, and South Dakota), South
Atlantic (Delaware, District of Columbia, Florida, Georgia, Maryland, North Carolina,
South Carolina, Virginia, and West Virginia), East South Central (Alabama, Kentucky,
Mississippi, and Tennessee), West South Central (Arkansas, Louisiana, Oklahoma, and
Texas), Mountain (Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Utah, and
Wyoming), and Pacific (Alaska, California, Hawaii, Oregon, and Washington).
In terms of company rather than worker characteristics, it generally is the case
that — regardless of the type of paid leave —
! relatively more employees of larger than smaller establishments
receive leave with pay;
! relatively more workers in firms located in metropolitan than
nonmetropolitan areas have access to paid leave benefits; and
! relatively more employees at firms in the New England and Middle
Atlantic regions, compared to other regions, are provided paid leave.

CRS-14
Table 1. Percent of Workers with Paid Leave Benefits
by Employee and Employer Characteristics, March 2006
(private nonfarm industries)
Characteristic
Sick
Family
Personal
Vacation
Holiday
Funeral
Jury Duty
Military
All Workers
57
8
37
77
76
68
70
48
Worker Characteristics
White-collar occupations
72
11
46
83
84
78
80
57
Blue-collar occupations
45
4
29
79
80
64
66
43
Service occupations
38
5
24
59
50
46
51
32
Full-time
68
9
42
90
88
76
78
53
Part-time
22
3
19
36
37
39
45
29
Union
59
6
47
83
83
81
82
55
Nonunion
57
8
36
77
75
66
69
47
Average wage under $15 per hour
46
5
28
69
67
57
60
39
Average wage $15 or more per hour
73
11
48
88
88
81
82
60
Establishment Characteristics
Nonfarm goods-producing industries
48
7
34
86
85
72
72
52
Private service-producing industries
60
8
37
75
74
66
70
47
1-99 workers
48
6
26
70
68
56
58
35
100 or more workers
69
10
50
86
86
82
84
62
Metropolitan area
59
9
38
78
77
69
72
50
Nonmetropolitan area
50
4
29
75
73
60
62
39
New England
67
10
48
77
81
74
81
56
Middle Atlantic
62
6
45
79
78
75
79
54
East North Central
54
8
39
76
76
71
71
50
West North Central
57
6
27
73
73
67
66
44
South Atlantic
55
9
34
79
77
67
71
49
East South Central
53
6
34
77
76
61
67
41
West South Central
55
8
32
78
77
61
65
44
Mountain
57
6
39
74
72
62
64
47
Pacific
60
10
32
77
74
65
64
42
Source: U.S. Bureau of Labor Statistics, National Compensation Survey: Employee Benefits in Private Industry, March 2006.

CRS-15
The picture is more mixed for incidence of paid time off by sector of
employment. Substantially larger percentages of businesses that produce goods than
produce services offer employees leave for vacations and holidays. The opposite is
true for sick leave. If government is added to the private service-producing sector
shown in Table 1, the gap in sick leave provision between the two sectors is even
wider. When the BLS last surveyed benefit incidence in state and local governments
in 1998, 96% of their employees had sick leave.45 Federal employees similarly have
near universal access to paid sick leave as well as many of the other benefits for
which data are collected in the NCS. They also are permitted to use their annual
leave not only for vacations but also for personal reasons.46 In addition, they can use
sick leave for family caregiving and bereavement. Some state governments also
permit their employees to use sick leave for other reasons (e.g., family caregiving).47
Among Working Parents. Utilizing data from the latest round (2002) of the
National Survey of America’s Families (NSAF), the Urban Institute published
information on the characteristics of working parents 18-54 years old with any type
of paid leave. Significantly more fathers (83.5%) than mothers (76.2%) report
having any time off with pay. Married parents (81.5%) are significantly more likely
than single parents (73.8%) to have access to paid leave. Receipt of paid leave
increases with age of parents and age of youngest child; as a result, it appears that
“workers with a great need for leave — parents with very young children — are the
least likely to have access to leave.”48 Access to paid leave benefits increases in step
with family income measured as a percentage of the federal poverty level.
Two other studies similarly estimated a direct relationship between family
income and receipt of paid time off from work. On the basis of data from the
National Longitudinal Study of Youth, 76% of families in the bottom quartile of the
income distribution lacked paid sick leave and 58% lacked paid vacations at some
point while employed between 1990 and 1996. In contrast, 40% of families in the
top quartile of the income distribution lacked paid sick leave, and 41% lacked paid
vacations.49 Similarly, results from the Kaiser Foundation’s 2001 Women’s Health
Survey show that 64% of employed women with family income below 200% of the
federal poverty level are not paid when they miss work to care for a sick child
compared to 37% of working women in higher income families.50
45 BLS, Employee Benefits in State and Local Governments, 1998, December 2000.
Percentage applies to persons employed full-time.
46 Information on paid leave for federal employees is available at [http://www.opm.gov/
oca/leave/HTML/factindx.asp].
47 For more information see CRS Report RL33710, State Family and Medical Leave Laws.
48 Katherine Ross Phillips, Getting Time Off: Access to Leave among Working Parents,
Washington, DC: The Urban Institute, Series B, No. B-57, April 2004, p. 2-3. (Hereafter
cited as Phillips, Getting Time Off.)
49 Jody Heymann, The Widening Gap, New York, NY: Basic Books, 2000.
50 The Henry J. Kaiser Family Foundation, Women, Work, and Family Health: A Balancing
Act
, April 2003.

CRS-16
Welfare receipt at any time significantly reduces a parent’s likelihood of having
paid leave, according to the analysis of NSAF data. But, leave availability is greater
among those no longer receiving welfare than among current recipients — with
almost three in five working parents currently on welfare lacking any type of paid
time off. The study’s author describes the low rate of access to paid leave among
parents currently receiving welfare as “troubling” because
These parents may be trying to move off public assistance. Without ample work
supports, including job-protected leave, they may be unable to keep their ties to
the labor market in the event of a family crisis, or even just a sick child.51
The data from the NSAF (household) survey accord with that from the NCS
(employer) survey in terms of the relationship of benefit access to hours worked and
firm size. According to both surveys, employees who work fewer hours are less
likely to be offered time off with pay, and the incidence of paid leave is lower at
smaller than larger employers.
The availability of paid leave among working parents generally increases with
job tenure. For poor working parents, however, access to any kind of paid leave is
as likely for those with less than one year on the job as for those with two or more
years of tenure. This might be the case if poor parents tend to work part-time, in
service occupations (e.g., food preparers, building cleaners), or for small businesses
— each associated with low provision of paid leave benefits (see Table 1).
A Detailed Look at Paid Sick Leave. The Medical Expenditures Panel
Survey (MEPS), co-sponsored by the Agency for Healthcare Research and Quality
and the National Center for Health Statistics, asks a nationally representative sample
of households in the civilian noninstitutional population about demographic
characteristics, job characteristics, and access to paid sick leave. In the following
analysis of the household component of MEPS data for 2004 undertaken by the
Congressional Research Service, individuals are considered employed if they had a
job when they were interviewed or had a job to return to on the date of the interview.
Sick leave coverage is for the main job held on the interview date. Self-employed
persons and individuals who did not respond to the sick leave question are excluded.
A little more than three in five workers (61.7%) reported that their employers
provide paid sick leave.52 The MEPS also asked households about access to paid
vacations, which are available to almost seven in ten employees (69.6%). Although
the magnitudes not surprisingly vary given the different employee populations and
time periods they cover, the MEPS and NCS data agree that relatively more workers
have access to paid time off to take vacations than to care for illnesses or injuries.
As shown in Table 2, relatively more employed women (63.2%) than men
(60.3%) have sick leave in their compensation package. The difference is small but
statistically significant. Married persons (69.2%) also are significantly more likely
51 Phillips, Getting Time Off, p. 3.
52 The total employment on which the percentages were calculated is individuals who
responded to both the paid sick leave as well as demographic, income, and other questions.

CRS-17
than never-married individuals (47.3%), who could include single parents, to have
access to the leave benefit.
Although more than 60% of employees age 25 and older receive paid sick leave,
this is true for fewer than half as many younger workers. The high rate of part-time
employment among young workers and the low incidence of sick leave among part-
timers may partly account for this finding. In 2006, 45% of 16- to 24-year-olds at
work in nonfarm industries usually were employed fewer than 35 hours a week; part-
time employment among those aged 25 and older was much lower (20%).53 As
shown in Table 1, 22% of part-time workers versus 68% of full-time workers had
paid sick leave coverage in that year.54
Table 2. Percent of Workers with Paid Sick Leave by
Selected Demographic Characteristics, 2004
Total
Employed Persons With
Characteristic
Employed
Paid Sick Leave
All Workers
100.0%
61.7
Gender
Males
100.0%
60.3
Females
100.0%
63.2
Marital Status
Married
100.0%
69.2
Widowed, divorced or separated
100.0%
62.2
Never-married
100.0%
47.3
Age
16-24 years old
100.0%
27.9
25-34 years old
100.0%
64.4
35-44 years old
100.0%
68.8
44-54 years old
100.0%
72.9
55 years and older
100.0%
63.7
Ethnicity and Race
Hispanic
100.0%
45.3
Black, not Hispanic
100.0%
65.6
Asian, not Hispanic
100.0%
65.2
White, not Hispanic
100.0%
63.8
Source: Prepared by U.S. Congressional Research Service from the 2004 Medical Expenditures Panel
Survey (MEPS) household component.
53 BLS, Employment and Earnings, January 2007, Table 22.
54 The MEPS data also show that the rate of paid sick leave receipt is lower among persons
employed part-time (23.8%) than among persons employed full-time (71.8%).

CRS-18
Similarly, Hispanics are significantly less likely to receive paid sick leave than
the non-Hispanic groups shown in Table 2. The industry employment pattern among
Hispanics may contribute to this outcome, because they work at well above-average
rates in a few industry groups where access to paid sick leave is limited. In 2006,
when Hispanics accounted for 13.6% of all employed persons, they represented
19.4% of workers in agriculture and related industries (e.g, crop production) and the
same share of workers in leisure and hospitality industries (e.g., traveler
accommodations, restaurants and other food services); 25.1% of workers in the
construction industry were of Hispanic origin as well.55 As shown in Table 3, the
fraction of workers with sick leave in these industry groups was well below the
average of 61.7%: in 2004, 32.2% of workers in construction, 22.5% in leisure and
hospitality, and 30.3% in natural resources had paid sick leave. (Leisure and
hospitality is an exception to the above-average incidence of paid sick leave in the
service-producing sector noted in Table 1, as is the “other services” industry group
that includes automotive repair and maintenance shops, beauty salons, and religious
organizations).
Table 3. Percent of Workers with Paid Sick Leave
by Industry, 2004
Total
Employed Persons
Industry
Employed
With Sick Leave
All industries
100.0%
61.7
Natural resources
100.0%
30.3
Mining
100.0%
55.2
Construction
100.0%
32.2
Manufacturing
100.0%
63.2
Wholesale and retail trade
100.0%
53.8
Transportation and utilities
100.0%
70.7
Information
100.0%
77.9
Financial activities
100.0%
76.9
Professional and business services
100.0%
66.3
Education, health, and social services
100.0%
75.1
Leisure and hospitality
100.0%
22.5
Other services
100.0%
46.2
Public administration
100.0%
90.3

Source: Prepared by U.S. Congressional Research Service from the 2004 Medical Expenditures Panel
Survey (MEPS) household component.
55 BLS, Employment and Earnings, January 2007, Table 18.

CRS-19
MEPS data suggest a positive relationship between educational attainment and
the incidence of paid sick leave. (See Table 4.) Just 28.0% of employees with less
than 12 years of formal education have paid sick leave; the share doubles among
those who attended school for exactly 12 years (56.3%); the percentage of employees
with postsecondary education who receive paid sick leave is still higher, topping 80%
for those with at least 4 years of college. This relationship may be partly related to
occupational employment patterns. Generally, employers require higher levels of
educational attainment for white-collar occupations (e.g., managers and
professionals) than blue-collar occupations (e.g., construction and factory workers)
or service occupations (e.g., sales counter clerks and hairdressers). According to the
NCS data in Table 1, 72% of private nonfarm employees in white-collar occupations
in 2006 had access to sick leave compared to considerably fewer employees in blue-
collar (45%) and service (38%) positions.
Table 4. Percent of Workers with Paid Sick Leave
by Education, 2004
Total
Employed Persons With
Years of Schooling
Employed
Sick Leave
Total
100.0%
61.7
Fewer than 12 years
100.0%
28.0
12 years
100.0%
56.3
1-3 years of college
100.0%
64.1
4 years of college
100.0%
80.8
5 or more years of college
100.0%
85.0

Source: Prepared by U.S. Congressional Research Service from the 2004 Medical Expenditures Panel
Survey (MEPS) household component.
The MEPS data in Table 5 provide more detailed information on receipt of sick
leave benefits by occupation than the NCS data. Persons in all but one white-collar
occupational group report above-average access to paid sick leave, the exception
being sales and related workers (e.g., cashiers, retail salespersons). For example,
86.9% of all workers who hold management, business, and financial operations jobs
have the benefit, as do 79.5% of all workers employed in professional and related
occupations. Persons in blue-collar occupations and service occupations report well
below average receipt of sick leave. For example, 42.8% of employees in
construction, extraction, and maintenance occupations (e.g., automotive service
technicians and mechanics, and carpenters) and 40.3% in service occupations (e.g.,
nursing, psychiatric, and home health aides and child care workers) have paid sick
leave — some 20 percentage points below the average across all occupations of
61.7%.

CRS-20
Table 5. Percent of Workers with Paid Sick Leave
by Occupation, 2004
Total
Employed Persons
Occupation
Employed
With Sick Leave
All occupations
100.0%
61.7
Management, business, and financial
100.0%
86.9
operations occupations
Professional and related occupations
100.0%
79.5
Service occupations
100.0%
40.3
Sales and related occupations
100.0%
49.3
Office and administrative support jobs
100.0%
68.5
Farming, forestry, and fishing jobs
100.0%
21.8
Construction, extraction, and
100.0%
42.8
maintenance occupations
Production, transportation, and material
100.0%
50.0
moving occupations

Source: Prepared by U.S. Congressional Research Service from the 2004 Medical Expenditures Panel
Survey (MEPS) household component.
A positive relationship between employee earnings and the prevalence of paid
sick leave appears in the MEPS data, which echoes the pattern found in the NCS
shown in Table 1.56 Just 16.9% of persons who earned $7.25 an hour or less in 2004
received sick leave according to the data in Table 6. The share almost quadruples
among those who earned between $7.26 and $20.00 per hour.57 The percentage of
employees who had access to the benefit was still higher, over 80%, for those paid
more than $20.00 an hour. Part of the reason low-wage workers are less frequently
offered paid sick or other leave benefits may be that employers consider them more
easily replaceable than higher skilled workers in whom they tend to make greater
investments (e.g., training).
56 Additionally, a study of 2006 NCS microdata by the Institute for Women’s Policy
Research (IWPR) estimated that 21% of workers in the bottom quartile of the wage
distribution had paid sick leave in 2006 while 72% of workers in the top quartile received
the benefit. Testimony of IWPR President Heidi Hartmann before the U.S. Senate
Committee on Health, Education, Labor, and Pensions, Hearing on the Healthy Families
Act, February 13, 2007.
57 An hourly rate of $7.25 was chosen because that is the wage to which the federal
minimum was raised in the U.S. Troop Readiness, Veterans’ Care, Katrina Recovery, and
Iraq Accountability Act of 2007 (P.L. 110-28). The next interval ($7.26-$20.00) was chosen
because the average hourly earnings of all wage and salary workers in 2004 was $20.34, as
estimated by CRS from the March Supplement to the CPS.

CRS-21
Table 6. Earnings of Workers with Paid Sick Leave
by Earnings, 2004
Total
Employed Persons
Hourly Wage
Employed
With Sick Leave
Total
100.0%
61.7
$7.25 or less
100.0%
16.9
$7.26-$20.00
100.0%
60.1
$20.01-$30.00
100.0%
82.9
$30.01-$40.00
100.0%
86.4
$40.01-$50.00
100.0%
90.8
Over $50.00
100.0%
83.5

Source: Prepared by U.S. Congressional Research Service from the 2004 Medical
Expenditures Panel Survey (MEPS) household component.
Cost to Employers
Paid time off from work composes a considerable part of the employee benefit
package. The cost to employers of offering leave with pay — $1.96 per hour worked
on average in nonfarm private industries and state and local government —
nonetheless comes in well behind insurance (e.g., health insurance) and legally
required benefits. (See Table 7.) If Congress required employers to provide family-
medical leave with pay as has been proposed in some bills, the cost of leave benefits
to employers would increase. If Congress instead established a temporary disability
insurance program funded in whole or part through a tax on employers as has also
been proposed, their cost of legally required benefits would rise.58
BLS computes benefit costs across all surveyed employers, whether or not they
provide the benefit. Therefore, the cost per hour worked will be affected by the
incidence of benefit provision. Not surprisingly then in light of the above-described
frequency of provision by type of leave, the employer’s average cost per hour worked
is highest for vacations (92 cents) followed by holidays (64 cents). The lower
incidence of sick leave benefits is reflected in its average cost across all surveyed
employers of 30 cents per hour worked.
A good deal of variation exists between private firms and state and local
government in labor costs for time not worked. The widest disparity between the two
types of employers occurs in connection with paid sick leave: the time off allowed
58 Because employees generally are no more valuable (i.e., productive) to employers after
imposition of a benefit, employers appear to have no economically sound reason to raise
their workforce’s total compensation as a result of the requirement. Therefore, economists
theorize that firms will try to finance the added cost of the benefit by reducing or slowing
the growth of other components of compensation. For additional information, see CRS
Report 93-499, Employee Benefits: The Labor Effects of Work-Based Mandates, by Linda
Levine, which is out of print but available from the author upon request.

CRS-22
employees to care for illness or injury costs private firms 22 cents per hour worked
on average; state and local government, 75 cents per hour worked on average. Once
again, this difference reflects the generally greater prevalence of sick leave among
government workers.
Table 7. Employer Costs Per Hour Worked for
Employee Compensation, March 2007
All Civilian Workersa
Compensation
Private Nonfarm
State and Local
Total
Component
Industry
Government
Cost
Percent
Cost Percent
Cost
Percent
Total
27.82
100.0
25.91
100.0
38.66
100.0
Wages and salaries
19.47
70.0
18.34
70.5
25.90
67.0
Benefits
8.35
30.0
7.58
29.5
12.76
33.3
Paid leave
1.96
7.0
1.78
6.8
3.01
7.8
— Vacation
0.92
7.0
0.90
3.5
1.04
2.7
— Holiday
0.64
3.3
0.58
2.2
0.97
2.5
— Sick
0.30
2.3
0.22
0.8
0.75
1.9
— Other
0.10
1.1
0.08
0.3
0.25
0.6
Supplemental payb
0.69
2.5
0.76
2.9
0.33
0.9
Insurance
2.33
8.4
1.97
7.5
4.36
11.3
— Health
2.19
7.9
1.83
7.0
4.22
10.9
Retirement and savings
1.16
4.2
0.87
3.7
2.82
7.3
Legally requiredc
2.21
7.9
2.20
8.6
2.24
5.8
Source: U.S. Bureau of Labor Statistics, the National Compensation Survey’s Employer Costs for
Employee Benefits, March 2007.
Note: Benefit costs are computed across all surveyed employers, whether or not they provide the
benefit. Percentages may not add to 100% due to rounding and omission of miscellaneous benefits.
a. Includes workers in the private nonfarm economy excluding private households and includes the
public sector excluding federal government.
b. Supplemental pay is premium pay for working overtime, weekends, or holidays; shift differentials;
and nonproduction bonuses.
c. Legally required benefits are social security, unemployment compensation, and workers’
compensation.

CRS-23
Within the private sector, the cost of leave benefits per hour worked usually is
less on average at smaller than larger companies because relatively few small
businesses offer paid leave. (See Table 8.) For example, the provision of paid sick
leave at workplaces with fewer than 99 employees averages 14 cents per hour
worked; at workplaces with 100 or more employees, 30 cents per hour worked.
There is little variability in the average cost of sick leave provision between firms
with 1 to 49 employees versus 50 to 99 employees, just as there is little difference in
the incidence of paid sick leave between the two according to NCS data.59 However,
the average cost of offering employees sick leave almost doubles between firms with
100 to 499 employees (22 cents per hour worked) and 500 or more employees (41
cents per hour worked). This difference in average leave benefit costs of large and
very large firms is evident regardless of the reason for leave.
Table 8. Employer Costs Per Hour Worked for Leave Benefits
by Type of Leave and Firm Size, March 2007
Paid Leave
Size of Firm
Total
Vacation
Holiday
Sick
Other
All employees
1.78
0.90
0.58
0.22
0.08
1 to 99 employees
1.16
0.58
0.41
0.14
0.04
— 1 to 49 employees
1.11
0.55
0.39
0.13
0.03
— 50 to 99 employees
1.31
0.65
0.45
0.16
0.05
100 or more employees
2.44
1.25
0.76
0.30
0.12
— 100 to 499 employees
1.81
0.92
0.60
0.22
0.07
— 500 or more employees
3.21
1.66
0.96
0.41
0.17
Source: U.S. Bureau of Labor Statistics, the National Compensation Survey’s Employer Costs for
Employee Benefits, March 2007.
59 According to unpublished NCS data for March 2006 (when 57% of employees in nonfarm
private industries had access to paid sick leave), 48% of employees at firms with 1-14
employees, 49% of employees at firms with 15-49 employees, 47% of employees at firms
with 50-99 employees, and 69% of firms with 100 or more employees had access to paid
sick leave.

CRS-24
Concluding Remarks
Access to the paid time off from work that employers voluntarily provide is not
evenly distributed across employees. This unevenness appears to exacerbate wage
inequality, with leave benefits more often available to higher than lower paid
workers, to more rather than less educated workers, to white-collar compared to blue-
collar or service workers, to persons working full- rather than part-time, and to
employees of larger in contrast to smaller firms.60
The U.S. government has a comparatively limited role in mandating or
regulating leave benefits. The sole leave entitlement Congress passed — unpaid time
off under the FMLA — has a long hotly debated history. State governments have
been more active in this policy area than the federal government. Nonetheless, very
few jurisdictions appear interested in enacting individually a family-medical leave
statute that provides both cash benefits and job security. Businesses for their part
have been loosening the link between employment and benefit provision in the last
several years (e.g., the shift from traditional pensions to 401k retirement plans and
ceasing to extend employee health insurance to retirees).
60 For information on wage inequality see CRS Report RL33835, Real Earnings and the
Distribution of Earnings
, by Gerald Mayer.