"Balancing Careers and Care: Examining Innovative Approaches to Paid Leave"

[Gavel sounds.] The Subcommittee on Workforce Protections will come to order. I note that a quorum is present. The subcommittee is meeting today to hear testimony on Balancing Careers and Care: Examining Innovative Approaches to Paid Leave. Under Committee Rule 7, the chair and ranking minority member will each make an opening statement of five minutes. I now recognize myself for five minutes for an opening statement. Today, we are here to discuss a topic that touches the lives of every American worker: paid leave. Whether it is the birth of a child, caring for a sick family member, or managing one's own serious health condition, the ability to take time off work without losing one's livelihood is a critical component of a modern workforce. For years, the debate over paid leave has often been framed as a choice between a one-size-fits-all federal mandate or doing nothing at all. But as we will hear today, there is a third way. Across the country, states and private employers are leading the way with innovative, flexible, and sustainable paid leave programs that meet the unique needs of their workers and businesses. Currently, 13 states and the District of Columbia have enacted mandatory paid family and medical leave programs. Additionally, several other states have established voluntary programs or encouraged private insurance solutions. These state-led efforts provide valuable lessons on what works and what does not when it comes to program design, funding, and administration. At the same time, many private employers are voluntarily offering paid leave benefits to attract and retain talent. According to the Bureau of Labor Statistics, 27 percent of private industry workers had access to paid family leave in 2023, up from 12 percent in 2014. This growth demonstrates that employers recognize the value of supporting their employees' needs outside of the workplace. However, a patchwork of different state laws can create significant administrative burdens for employers operating in multiple jurisdictions. This is why it is essential for us to examine how federal policy can support and build upon these innovative approaches without stifling the flexibility that allows these programs to succeed. Our witnesses today bring a wealth of expertise on this issue. We will hear about the Bipartisan Policy Center's work on paid leave, the experience of state workforce agencies in administering these programs, and the perspective of employers who are navigating this evolving landscape. I look forward to a productive discussion on how we can empower more Americans to balance their careers and their caregiving responsibilities. I now recognize the ranking member, the gentlewoman from Minnesota, Ms. Omar, for five minutes for her opening statement.

Thank you, Chairman Mackenzie. And thank you to our witnesses for being here today. Paid family and medical leave is not a luxury; it is a fundamental necessity for workers and their families. In the United States, we are the only industrialized nation that does not guarantee paid leave to its workers. This is a policy failure that has profound consequences for our economy, our public health, and the well-being of millions of Americans. While I appreciate the focus on innovative approaches, we must be clear: a patchwork of state laws and voluntary employer programs is not a substitute for a national standard. Currently, millions of workers, particularly those in low-wage jobs, have no access to paid leave. They are forced to make impossible choices between their paycheck and their health or the health of a loved one. The lack of a national paid leave policy disproportionately affects women, especially women of color, who are more likely to be primary caregivers and more likely to work in jobs without benefits. This contributes to the gender wage gap and limits economic opportunity for families across the country. When workers have access to paid leave, they are more likely to return to work, their children have better health outcomes, and businesses benefit from increased productivity and lower turnover. We have seen the success of state programs, like the one in my home state of Minnesota, which recently passed a comprehensive paid family and medical leave law. These programs prove that paid leave is popular, feasible, and effective. But your zip code should not determine whether you can afford to take time off to care for a newborn or a dying parent. I am concerned that some of the 'innovative' approaches being discussed today, such as voluntary private insurance models, may leave behind the very workers who need leave the most. We need a federal policy that is universal, portable, and provides meaningful wage replacement. I look forward to hearing from our witnesses about how we can achieve a system that truly works for all American workers. I yield back.

The gentlewoman yields back. I would now like to introduce our panel of witnesses. Ms. Adrienne Schweer is a Fellow at the Bipartisan Policy Center. Ms. Julie Squire is the Vice President of Policy and General Counsel at the National Association of State Workforce Agencies. Ms. Elyse Shaw is the Director of the Education, Labor and Worker Justice Team at the Center for Law and Social Policy. And Ms. Greta Kessler is the Vice President of Employee Health and Benefits at Marsh McLennan Agency. We thank you all for being here today. We look forward to your testimony. Pursuant to Committee Rule 7, each witness will have five minutes for their oral testimony. Ms. Schweer, you are now recognized for five minutes.

Chairman Mackenzie, Ranking Member Omar, and members of the subcommittee, thank you for the opportunity to testify today. My name is Adrienne Schweer, and I am a Fellow at the Bipartisan Policy Center, where I lead our work on paid family leave. At BPC, we believe that paid leave is a critical issue that requires bipartisan solutions, and we are encouraged by the growing interest in this topic on both sides of the aisle. The need for paid leave is clear. Most workers will need to take time off at some point in their careers for family or medical reasons. Yet, as noted, many lack access to paid leave. This gap is particularly acute for low-income workers and those working for small businesses. Over the past several years, we have seen a significant shift in the landscape of paid leave in the United States. States have become the laboratories of democracy, testing different models for delivering this benefit. In our research at BPC, we have identified several key principles for effective paid leave policy. First, it should be accessible to all workers, regardless of the size of their employer or their income level. Second, it should be affordable for both workers and employers. Third, it should be flexible enough to accommodate the diverse needs of families and businesses. And finally, it should be administratively simple to ensure that benefits reach those who need them in a timely manner. We have also seen the emergence of innovative private-sector solutions. Many insurance companies are now offering paid leave products that can be integrated into existing benefit packages. These private-market solutions can provide a valuable option for employers, particularly those who operate in multiple states and are looking for consistency. However, challenges remain, including the need for better data and the importance of ensuring that private plans meet certain minimum standards. As Congress considers federal action, we recommend a balanced approach that builds on the successes of state and private-sector programs. This could include providing incentives for employers to offer paid leave, establishing a federal baseline of benefits, or creating a framework that allows for better coordination between state and federal systems. By working together, we can create a paid leave system that supports workers, strengthens families, and promotes economic growth. Thank you, and I look forward to your questions.

Thank you, Ms. Schweer. Ms. Squire, you are now recognized for five minutes.

Chairman Mackenzie, Ranking Member Omar, and members of the subcommittee, thank you for inviting me to testify. My name is Julie Squire, and I am the Vice President of Policy and General Counsel for the National Association of State Workforce Agencies, or NASWA. NASWA represents the state agencies in all 50 states, D.C., and the territories that administer unemployment insurance, veteran reemployment services, and other workforce programs. In recent years, several of our member agencies have been tasked with implementing and administering new state paid family and medical leave programs. This is a significant undertaking that involves building new IT systems, developing regulations, and establishing processes for collecting premiums and paying benefits. Each state has taken a slightly different approach, reflecting their unique economic and political environments. One of the primary challenges states face is the complexity of coordinating paid leave with other existing programs, such as unemployment insurance and disability insurance. Ensuring that workers do not receive duplicate benefits while also making the application process as seamless as possible is a major priority. Additionally, states must navigate the interaction between state paid leave laws and the federal Family and Medical Leave Act, or FMLA. Another key issue for states is the long-term solvency of their paid leave funds. Most state programs are funded through payroll taxes, and states must carefully manage these funds to ensure they can meet future benefit obligations. This requires sophisticated actuarial modeling and the ability to adjust premium rates as needed. We have seen states use different funding models, including employee-only contributions, employer-only contributions, or a split between the two. NASWA provides a platform for states to share best practices and learn from one another's experiences. We have found that early and frequent communication with stakeholders, including employers and worker advocates, is essential for a successful program launch. We also emphasize the importance of robust IT infrastructure and clear, accessible information for both workers and employers. As you consider federal policy, we encourage you to look to the states as a resource and to consider how federal action might impact state administration. Thank you.

Thank you, Ms. Squire. Ms. Shaw, you are now recognized for five minutes.

Thank you, Chairman Mackenzie, Ranking Member Omar, and members of the subcommittee. My name is Elyse Shaw, and I am the Director of the Education, Labor and Worker Justice Team at the Center for Law and Social Policy, or CLASP. CLASP is a national non-profit that advances policy solutions to improve the lives of people with low incomes. We believe that access to paid family and medical leave is a matter of economic justice and racial equity. While we are here to discuss innovative approaches, it is important to recognize that the most significant innovation in paid leave has been the passage of comprehensive state laws. These programs are proven to work. They provide a reliable source of income for workers when they need it most, and they do so in a way that is affordable for both workers and employers. However, the current state-by-state approach leaves millions of workers behind. In states without paid leave laws, workers must rely on the generosity of their employers. Unfortunately, low-wage workers, who are disproportionately people of color and women, are the least likely to have access to employer-provided paid leave. This lack of access exacerbates existing inequalities and traps families in a cycle of poverty. A national paid leave standard is the only way to ensure that all workers, regardless of where they live or what kind of job they have, can take the time they need to care for themselves and their families. We are concerned about proposals that would rely on voluntary private insurance or other market-based approaches. These models often fail to provide adequate wage replacement, have restrictive eligibility requirements, and can be prohibitively expensive for small businesses and low-wage workers. Furthermore, private insurance companies have a profit motive that can conflict with the goal of providing universal access to benefits. A public social insurance model, like the ones successfully implemented in several states, is the most efficient and equitable way to provide paid leave. A federal paid leave program should be comprehensive, covering parental leave, family caregiving, and personal medical leave. It should provide a progressive wage replacement rate to ensure that low-wage workers can actually afford to take leave. And it should include strong job protections so that workers do not fear losing their jobs when they take leave. We urge Congress to pass the FAMILY Act, which would establish a national paid leave program that meets these criteria. Thank you for the opportunity to testify.

Thank you, Ms. Shaw. Ms. Kessler, you are now recognized for five minutes.

Chairman Mackenzie, Ranking Member Omar, and members of the subcommittee, thank you for the opportunity to be here today. My name is Greta Kessler, and I am the Vice President of Employee Health and Benefits at Marsh McLennan Agency. We work with thousands of employers across the country, helping them design and manage their employee benefit programs, including paid leave. From our perspective, the landscape of paid leave is rapidly changing. Employers of all sizes are increasingly recognizing that offering paid leave is not just the right thing to do, but it is also a business imperative. In today's tight labor market, a robust paid leave policy is a key tool for attracting and retaining top talent. We see many employers going above and beyond what is required by law to provide generous leave benefits to their employees. However, the proliferation of state-mandated paid leave programs has created significant challenges for our clients, particularly those with employees in multiple states. Each state has its own set of rules regarding eligibility, benefit amounts, duration of leave, and administrative requirements. This creates a complex and often confusing environment for both employers and employees. For a multi-state employer, managing these different programs can be an administrative nightmare. This is where innovative private-sector solutions can play a vital role. Many of our clients are looking for ways to streamline their paid leave offerings and provide a consistent experience for all their employees, regardless of their location. We are seeing a growing interest in private insurance products that can wrap around or replace state-mandated benefits. These private plans can offer more flexibility and can be tailored to meet the specific needs of an employer's workforce. We also see a need for greater clarity and coordination at the federal level. While we do not necessarily support a one-size-fits-all federal mandate, we do believe there is a role for the federal government in providing a framework that encourages innovation and reduces administrative burdens. This could include things like clarifying the interaction between state laws and ERISA, or providing tax incentives for employers who offer high-quality paid leave programs. By fostering a more supportive environment for private-sector solutions, we can expand access to paid leave while maintaining the flexibility that businesses need to thrive. Thank you.

Thank you, Ms. Kessler. We will now move to the question-and-answer portion of the hearing. I will recognize myself for five minutes for questions. Ms. Schweer, in your testimony, you mentioned the importance of flexibility in paid leave programs. Can you elaborate on why flexibility is so important for both employers and employees, and how some of the innovative approaches you've seen provide that flexibility?

Thank you, Chairman. Flexibility is crucial because every family's situation is different. A new parent might need several weeks of continuous leave, while someone caring for an elderly parent might need intermittent leave to attend doctor's appointments. Similarly, a small business with only a few employees has different operational needs than a large corporation. Innovative approaches, like some of the private insurance models, allow for this kind of customization. For example, some private plans allow employers to choose the level of wage replacement or the duration of leave that best fits their budget and their employees' needs. They can also offer features like 'return-to-work' support, which can help employees transition back to the workplace after a period of leave. This kind of flexibility is much harder to achieve in a rigid, one-size-fits-all government program. By allowing for a variety of models, we can ensure that more workers have access to the specific type of support they need.

Thank you. Ms. Squire, you talked about the administrative challenges states face. One of the concerns we often hear from employers is the burden of complying with multiple, often conflicting, state laws. From your perspective, what are some of the most significant administrative hurdles for employers, and are there ways that states or the federal government could help alleviate those burdens?

The biggest hurdle is definitely the lack of uniformity. Each state has its own definitions of 'family member,' its own waiting periods, and its own reporting requirements. For an employer with workers in five or 10 different states, this means they have to track and comply with five or 10 different sets of rules. This is not only time-consuming but also increases the risk of non-compliance. States are trying to address this by collaborating through organizations like NASWA to share information and, where possible, align their processes. However, there are limits to what states can do on their own. Federal guidance or a more standardized framework could certainly help. For example, if there were a common set of definitions or a more streamlined way for employers to report data across multiple states, that would be a huge benefit. We also see a need for better coordination between state paid leave programs and federal laws like FMLA and the ADA. Anything that reduces the complexity for employers will ultimately make these programs more successful.

Thank you. Ms. Kessler, you mentioned that many of your clients are looking for private-sector solutions to manage their paid leave offerings. What are some of the specific advantages of these private-sector models over state-run programs, and what are some of the barriers that prevent more employers from adopting them?

One of the main advantages is consistency. A private plan can provide the same level of benefits to all employees, regardless of which state they work in. This simplifies administration and ensures that all employees are treated fairly. Private plans also often offer better customer service and faster claims processing than state agencies, which can be overwhelmed by high volumes. As for barriers, the biggest one is the cost and complexity of navigating the different state requirements for 'opting out' of a state program in favor of a private one.

...and the private sector. I'm also interested in how we can ensure that any federal policy doesn't inadvertently discourage employers from offering their own benefits. Ms. Kessler, in your experience, how do employers react when new government mandates are introduced?

Thank you for the question. In my experience, when new mandates are introduced, employers often feel a sense of administrative burden. They have to navigate complex compliance requirements which can vary significantly from state to state. This often leads to a 'wait and see' approach where they might hold off on expanding their own voluntary benefits until they fully understand the impact of the new regulations.

Thank you. That's a very important point. I now recognize the Ranking Member, Ms. Omar, for five minutes for her opening statement or questions.

Thank you, Mr. Chairman. And thank you to our witnesses for being here today. Paid leave is not a luxury; it is a necessity for every worker in this country. We are the only industrialized nation that does not guarantee paid leave to its citizens. Ms. Shaw, can you speak to the impact that the lack of a national paid leave policy has on low-wage workers and communities of color?

Absolutely. The lack of a national paid leave policy disproportionately affects low-wage workers, who are often the least likely to have access to employer-provided benefits. For many of these workers, taking time off to care for a newborn or a sick family member means losing a paycheck or even their job. This exacerbates existing economic inequalities and hits communities of color particularly hard, as they are overrepresented in low-wage industries.

...and that's why we're here today. I want to thank our witnesses for their testimony and for sharing their expertise with us. I now recognize the Ranking Member for any closing remarks she may have.

Thank you, Mr. Chairman. And thank you again to our witnesses for being here today. Your testimony has been incredibly valuable as we consider how to best support working families. It is clear that the current patchwork of leave policies is not meeting the needs of many Americans, particularly those in low-wage jobs or working for small businesses. We've heard today about the importance of federal standards to ensure that all workers, regardless of where they live or who they work for, have access to paid leave. We've also heard about the need for policies that are inclusive of all types of families and all types of caregiving needs. As we move forward, I hope we can work together in a bipartisan way to find solutions that provide real security for workers and their families while also supporting the needs of our economy. I look forward to continuing this conversation. And with that, I yield back.

I thank the gentlelady. I also want to thank our witnesses for their participation today. Your insights are very helpful as we look at these innovative approaches. There being no further business, the subcommittee stands adjourned. [Gavel sounds.]