Private Sector Employers Seeing Benefits in Offering Paid Family and Medical Leave, EY Study Finds

New York, 6 April 2017

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Majority of employers do not offer PFML, with cost perceived as the main barrier faced—despite productivity and job satisfaction benefits reported by employees with access to PFML

A survey recently conducted by Ernst & Young LLP exploring the adoption of paid family and medical leave (PFML) benefits among private sector companies in the U.S. found that less than half of private sector employees have access to any PFML benefits. PFML is defined as leave granted to an employee to care for a newborn, adopted or sick child, sick adult relative or for a personal health condition and is currently only mandated in four U.S. states.

The study was conducted to better understand the type and duration of leave available to and used by employees and more clearly identify the barriers for implementing PFML policies.

Cost and administrative burden were among the key factors cited by employers as the reasons for not implementing PFML policies. Cost was of chief concern by businesses of all sizes, including small businesses with less than 100 employees (41 percent) and large organizations with 500+ employees (61 percent).  Interestingly, however the larger the firm, the more they felt it was an administrative burden (46 percent of large businesses v. 24 percent of small businesses).

The Benefits of PFML

Of the employers that have implemented PFML policies, tangible benefits have been felt across their organizations. An overwhelming majority of employers reported that the policies are having a positive effect on employee-related outcomes such as morale (82 percent) and operating outcomes such as productivity (71 percent) and profitability (63 percent).  This is especially noteworthy given that the primary concern of those who have not yet adopted PFML benefits is cost.

Employees with access to PFML benefits also reported higher levels of job satisfaction than those without access to PFML.  For example, 71% of employees who had access to PFML benefits for the birth of a child reported being “very” or “extremely satisfied” with their current employment compared to only 50% of employees who reported not having access to such a benefit.

According to the study, employees between 25-44 years old more commonly reported having access to PFML benefits. Employees within this age range were also most likely to say that PFML benefits were important in their decision to join and/or remain with employers.

Supporting Policy Changes

Public policy can influence employers to provide PFML benefits, but divisions exist on the right approach, chiefly along the lines of company size and industry.

For all respondents, regardless of whether they provided PFML benefits to their employees, the majority of large companies supported state or federal policy changes that would fund PFML benefits through taxation. However, less than 20 percent of smaller companies supported such policy changes.

Nearly three-quarters of large employers also supported the use of tax credits for businesses to encourage adoption of PFML benefits; small companies were split on this policy option.

To learn more about the recent PFML study visit: http://www.ey.com/us/en/home

Survey Methodology

1,546 U.S. private sector human resource decision-makers and 3,068 U.S. employees in the private sector aged 18 and older were surveyed from August to September 2016 for this study. This work was supported by Pivotal Ventures, the executive office of Melinda Gates.

About EY

EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities.

EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young LLP is a member firm serving clients in the US. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com.

This news release has been issued by Ernst & Young LLP, a member of the global EY organization that provides services to clients in the US.

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