Small U.S. businesses actually want federal paid family leave

Among the many reasons the United States does not yet have federal paid family leave is the idea that it’s too expensive and burdensome for small businesses to offer months of time off to new parents. But new research shows that when given the option, small businesses like the policy.

In a survey of small companies in New York and New Jersey, which do have paid family leave, 71% said they were very or somewhat supportive of paid family leave, according to a November working paper from the National Bureau of Economic Research. That’s up from 62% a year earlier, before the pandemic.

"Contrary to some commonly cited rhetoric, small employers in states with [paid family leave] programs are actually quite supportive of PFL," the paper said.

President Joe Biden’s Build Back Better Act includes 4 weeks of paid family leave — a historic first for the United States that still falls many months short of what most other countries offer new parents. The United States is one of just seven countries around the world that doesn’t guarantee any paid maternity leave, leaving the vast majority of workers with nothing at all.

Studies have found paid family leave benefits families, employees and businesses. Women with access to leave are more likely to return to work, which allows companies to hang on to existing workers and save on the costs of replacing them in a tight labor market. The economy benefits when men take paternity leave too.

The new NBER research shows that firms that had workers that used paid leave were more supportive of it. Of those companies interviewed, 22% said they had employees use their state leave and 29% had workers take leave under the Families First Coronavirus Response Act — boosting support for paid leave at those companies by 10 percentage points.

The survey polled 539 companies in New York and New Jersey with less than 100 employees across a range of industries.