Learning from employer experiences with paid leave policy expansions during the COVID-19 pandemic

Abstract

The United States does not have a federal policy offering employees paid leave. We study employer attitudes toward the Families First Coronavirus Response Act (FFCRA) federal emergency paid leave policies temporarily adopted during the COVID-19 pandemic to draw lessons for proposed permanent federal paid leave policies. We analyzed a 2021 survey of 300 San Francisco Bay Area employers to examine employers’ experiences with paid sick leave (PSL) and paid family leave (PFL) policies during the COVID-19 pandemic, along with their attitudes regarding FFCRA paid leave. Most firms reported that it was not difficult to comply with or seek reimbursement for FFCRA leave. Nevertheless, most smaller firms did report difficulty in understanding policy details, and many reported being unaware of FFCRA paid leave availability. FFCRA paid leave was broadly popular among firms aware of it: 64% supported (9% opposed) the PSL provisions, and 52% supported (12% opposed) PFL. However, support for permanent extension dropped to just over 40%, despite this Bay Area sample having long familiarity with California's state paid leave policies. We conclude that federal pandemic paid leave offers a potential model that could be refined for future paid leave policies, but support is mixed.

Introduction

The COVID-19 pandemic highlighted the critical public health importance of employee paid leave policies—including paid sick leave (PSL) and paid family leave (PFL) for caregiving. In recognition of the widespread lack of paid leave availability, the US federal government emergency pandemic response included new temporary PSL and PFL policies passed in March 2020 as part of the Families First Coronavirus Response Act (FFCRA). These leave policies were notable for offering employers federal reimbursement of paid leave costs, rather than simply a mandate that employers provide paid leave.

Paid sick leave, which covers short-term absence for acute illness or to obtain preventive care, is associated with increased preventive care seeking,¹ decreased presenteeism,² and a decreased likelihood of forgoing needed medical care.³ During the pandemic, cities with pre-existing PSL policies had 17% higher vaccination coverage than cities without such policies, with the strongest associations among the most socially vulnerable neighborhoods.⁴ Emergency PSL policies were estimated to have led to a reduction of approximately 400 confirmed cases of the disease per state per day in those states that did not have pre-existing policies.⁵

Pre-pandemic PFL policies, which are designed to allow workers to take extended periods of leave for family caregiving, have also been found to have important health benefits,⁶ though the research has primarily focused on parental leave. Paid family leave among new parents is associated with decreased infant mortality,^7,8 increased breastfeeding,^9,10 improved timeliness of early vaccinations,¹¹ increased postpartum care attendance,¹² and decreased infant hospitalizations.¹³

Paid leave policy landscape in the United States

The United States is a global outlier in its lack of paid leave provisions,^14-17 leaving most workers to rely on their employers to provide these benefits voluntarily. In 2022, 79% of employees had access to PSL through their jobs but just 25% had access to PFL.¹⁸ Prior to the pandemic, paid leave policies were slowly beginning to expand in cities and states across the United States. By the end of 2019, 10 states, the District of Columbia (D.C.), and at least 20 cities or counties had passed PSL laws; 8 states and D.C. had passed PFL laws.^19,20

The San Francisco Bay Area and California have been at the vanguard of these new policies (Appendix Table A1). San Francisco adopted a PSL ordinance in 2006²¹—followed by Oakland (2014), Emeryville (2015), and Berkeley (2016)—and in 2015, California began requiring employers statewide to provide most employees with 3 days of PSL per year (self-funded by the employer). Paid family leave benefits (to care for a seriously ill family member or bonding with a new child) in California began statewide even earlier, in 2004, and by the pandemic onset provided 6 weeks (8 weeks as of July 2020) of PFL at 60% of wages for most workers (70% for low-income workers). Because even 70% wage replacement is insufficient for many low-income workers to be able to financially afford leave, San Francisco's Paid Parental Leave Ordinance (PPLO) in 2017 implemented the country's first policy to provide up to 6 weeks of leave for new parents at 100% pay. Unlike the state's PFL program, which is financed through payroll taxes, the San Francisco PPLO is an unfunded employer mandate, with each employer required to self-finance the supplemental compensation for their own leave-taking employees. While the policy was complex and sometimes confusing for employers to comply with, the PPLO increased paid parental leave offering and employer support for the policy was high.²² However, awareness and understanding of the PPLO among employees were low, especially among low-wage workers,²³ workers of color,²⁴ and workers in blue-collar occupations.²⁵

The COVID-19 pandemic ushered in a new set of temporary PSL and PFL policies for COVID-related leaves. The federal FFCRA, which was effective from April 1, 2020 through December 31, 2020, required covered employers to provide 2 weeks of PSL at full pay (up to $511/day) to employees unable to work because they were quarantined and/or experiencing COVID-19 symptoms, or 2 weeks of sick leave at two-thirds pay to employees unable to work because they needed to care for someone in quarantine or a child whose school or childcare center was closed due to COVID-19.²⁶ FFCRA's separate PFL provisions entitled employees to an additional 10 weeks of expanded family and medical leave at two-thirds pay to care for a child whose school or childcare provider was closed due to COVID-19. The FFCRA mandate only applied to firms with fewer than 500 employees, and allowed firms with fewer than 50 employees to qualify for an exemption from the PFL (but not PSL) provisions if they would have jeopardized the viability of their business.²⁷ However, in 2020, California added a COVID-19 supplemental mandate that required 80 hours of PSL for firms with 500 or more employees.

A crucial component of the FFCRA was that covered employers were eligible for tax credits that reimbursed the cost of the FFCRA-mandated PSL and PFL (after the FFCRA paid leave mandate expired on December 31, 2020, the American Rescue Plan Act (ARPA) extended federal reimbursement of voluntarily-provided qualifying paid leave through September 30, 2021).

Impact of paid leave policies on employers

The small body of evidence that examines the impact of PFL policies on employers has found overall positive or neutral effects on employee productivity, profitability, morale, and costs.^6,22,28 One study of small employers in New York and New Jersey found increased employer support for state PFL policies during the COVID-19 pandemic, particularly among firms that had employees using PFL²⁹; by contrast, we examine support for the federal FFCRA policies.

The purpose of this study was to examine employer experiences with and attitudes toward FFCRA federal emergency paid leave policies temporarily adopted during the COVID-19 pandemic. We do so in a sample of San Francisco Bay Area employers who already had long familiarity with California paid leave policies. To help interpret these results, we also examine knowledge and awareness of the FFCRA and examine outcomes by key employer characteristics: size (<50, 50-499, 500+ employees) and whether the employer is in a low-wage industry.

Data

This paper draws on the Bay Area Employer Survey: Paid Leave During COVID-19, a survey of 300 San Francisco Bay Area employers fielded between May and August 2021. Target respondents were human resources managers with knowledge of the firm's paid leave benefits, eligibility, and use; especially in smaller businesses, these respondents could be owners or general managers who are not full-time human resources professionals. The survey asked about changes in employers’ PSL and PFL policies during the COVID-19 pandemic; leave-related administrative experiences during the COVID-19 pandemic; and employers’ knowledge, attitudes, and experiences with the FFCRA. The survey first attempted to re-interview panel respondents from the Bay Area Parental Leave Survey of 2018 Employers described previously,²¹ which had included 392 employers sampled from San Francisco and surrounding comparison counties (Alameda, Contra Costa, Marin, San Mateo, and Santa Clara); those employers had 20 or more worldwide employees, with oversamples of larger employers (100+ employees) and those from industries that disproportionately employ low-wage workers (accommodation and food service and selected retail). After excluding businesses no longer open, 159 of 339 estimated eligibles were interviewed, for a response rate of 47%, calculated using the American Association for Public Opinion Research (AAPOR) method. Of these, 141 had valid data for the present analysis. To understand the representativeness of this sample, Appendix Table A2 compares the weighted response among the 2021 panel respondents vs attritors on the most relevant 2018 question, which asked about employer support for California's Paid Family Leave program at the time, finding very similar support levels between panel respondents and attritors (81% vs 78% were very supportive, and 8% vs 10% were either neutral or opposed). To increase the sample size to the target of 300 total interviews in 2021, a refresher sample was drawn from the same 2018 sampling frame (with pre-COVID firm size of 20 or more employees and with at least 1 establishment located in the San Francisco Bay Area); repeated outreach by email and phone was attempted until achieving 159 additional completed interviews. To examine sensitivity of results when also including this refresher sample, Appendix Figures A1-A3 present results among just the panel sample, while the main results below analyze data for the full 2021 sample of 300 employers. Results from the panel sample do not differ meaningfully from the full analysis sample, lending support to the robustness of our main results as representative of the Bay Area.

Outcome variables: FFCRA knowledge, experiences, difficulty, and support

The survey measured firms’ awareness of FFCRA emergency PSL and PFL policies and, among those aware, their experiences with FFCRA (whether they had employees take FFCRA leave, and whether they tried to claim the associated federal reimbursement). It then measured potential difficulties employers may have had understanding or implementing FFCRA policies. It also measured whether firms found complying with FFCRA or claiming reimbursement to be difficult and whether they perceived their employees having difficulty understanding FFCRA. In addition, it measured the sources of information from which they learned FFCRA details. Finally, the survey elicited attitudes toward the policy: whether they support the FFCRA PSL and PFL emergency pandemic policies, and whether they would support a permanent extension of such policies. In the Supplemental appendix, we also report measures of changes in PSL and PFL offering during the pandemic.

Methods

In addition to unadjusted descriptive statistics reported in the main figures, in Supplemental material, we also show robustness when adjusting differences in outcomes using linear probability models that control for whether the employer is located in San Francisco vs surrounding counties, whether it is a self-reported essential business, employer size (<50, 50-499, 500+ employees), and industry average wage level (as previously described in Goodman et al.²²). Because the survey over-sampled low-wage and larger employers, all results are weighted to reflect the population distribution of private employers in San Francisco with 20 or more employees. For employers with missing data, complete case analysis was used.

Results

Descriptive statistics by firm size and wage level are shown in Appendix Table A3.

Employer experiences with FFCRA

Awareness and experiences

Figure 1 shows awareness and experiences with FFCRA overall and among small firms (Appendix Table A4 presents results by wage level and firm size). Among employers overall, the data reveal relatively high levels of awareness (71.4% FFCRA PSL, 59.8% FFCRA PFL) and uptake (65.0% of firms had employees take FFCRA PSL, 46.0% PFL). A closer look at subgroup data, however, suggests that size and wage level remain statistically significant determinants of firm awareness of both PSL and PFL federal mandates. Small firms were consistently less likely to have heard of the FFCRA's PSL (58.5% in contrast to 88.3% of mid-sized firms) and PFL (44.9% compared to 79.5% of mid-sized firms) mandate (Appendix Table A4). A similar pattern exists by wage level, with low-wage firms less likely than their non-low-wage counterparts to have heard of FFCRA PSL (7.1% vs 82.9%) and the FFCRA PFL (57.4% vs 80.6%) (Appendix Table A4). Importantly, despite the substantial overlap between small and low-wage firms (Appendix Table A3), adjusted linear probability analysis controlling for both size and wage level finds that small firm size and low-wage status are independently statistically significant.

Figure 1.

FFCRA awareness and experiences. Source: Bay Area Employer Survey: Paid Leave During COVID-19. ***P < 0.001. Significance for small vs mid-size firms.

The results in Figure 1 (and Appendix Table A4) also suggest that firm size plays a significant role in FFCRA utilization. Small firms were much less likely than mid-sized firms to have had employees take either FFCRA-sponsored PSL (48.0% of small firms vs 83.2% of mid-sized firms and 65.0% of firms overall) or PFL (28.4% of small firms vs 65.3% of mid-sized firms and 46.0% overall).

Figure 1 also shows firms’ administrative experiences with FFCRA. Among firms who had used FFCRA PSL/PFL, over half had tried to claim federal reimbursement (59.1% PSL, 55.7% PFL). While there were not significant differences by size or wage level in reimbursement claims, low-wage firms were more likely to have experienced difficulty receiving reimbursement for PFL (28.9% vs 8.1% of non-low-wage firms), while small firms were less likely to have experienced difficulty (1.6% vs 26.7% of mid-sized firms) (Appendix Table A4).

Reported difficulties with FFCRA

Figure 2 shows results regarding difficulties employers encountered in interpreting and implementing FFCRA policies (Appendix Table A5 presents these results by wage level and firm size). In terms of understanding, 70.5% of employers overall reported difficulty understanding at least 1 aspect of the FFCRA requirements, with the most common areas of difficulty being the intersection of FFCRA and state/local mandates (55.3%) and the federal reimbursement process (52.2%). Finer-grained analysis by subgroup reveals a strong size gradient in difficulty, with small firms significantly more likely to report difficulty in 4 out of the 5 policy areas, and large firms least likely to do so in all 5. When asked about employee understanding of FFCRA requirements, however, less than a third of firms overall (27.7%) said that they perceived employees having difficulty, though this proportion was significantly higher among small firms (39.1% vs 21.0% mid-sized firms and 27.7% of firms overall). Implementing and carrying out FFCRA policies seem to have posed less of a challenge. Just under a quarter of firms overall (24.8%) reported difficulty complying with the FFCRA mandate, and less than a fifth of firms (17.7%) indicated difficulty claiming federal reimbursement for employees on FFCRA-covered leave.

Figure 2.

FFCRA understanding. Source: Bay Area Employer Survey: Paid Leave During COVID-19. *P < 0.05; **P < 0.01; ***P < 0.001. Significance for small vs mid-size firms.

Sources of information

Table 1 summarizes the results regarding sources of information utilized by management and employees in understanding FFCRA requirements. Among employers overall, the most common sources of information were internet searches (66.3%) and payroll processing companies (66.3%), followed by the federal government (61.5%), an HR association (59.1%), and the state government (52.7%). When examining each of these categories by size and wage level, small firms are less likely to have received information from the federal government (47.4% vs 74.7% mid-sized firms), an HR association (33.5% vs 73.0%), or a payroll processing company (62.5% vs 78.8%). Large firms also exhibited differentials with reference to mid-sized firms, with large firms much more likely to have learned FFCRA details from an HR association (92.9% vs 73.0% mid-sized firms) and less likely to have learned from a payroll processing company (31.6% vs 78.8%). By wage level, low-wage firms were less likely than non-low-wage firms to have received information from the federal government (59.4% vs 76.7%) or an internet search (63.9% vs 84.0%). When it comes to sources of information available to employees, 72.3% of employers overall reported distributing education materials on FFCRA benefits to employees. This proportion was significantly lower, however, among small employers, only 59.0% of whom say that they provided information to employees in contrast to 79.4% of mid-sized firms and 87.2% of large firms.

Table 1.

FFCRA literacy and information sources by firm size and wage level (among firms aware of FFCRA).

FFCRA outcomes	Frequency, percentage, or mean of employers {Unadjusted significance} [Adjusted significance]
	Overall	Firm size			Wage level
		Small	Mid-size (Ref)	Large	Low-wage	Non-LW (Ref)
Subsample of firms who had heard of FFCRA PSL policy (n)	71.4% (n = 224)	58.5% (n = 101)	88.3% (n = 99)	75.9% (n = 24)	70.1% (n = 106)	82.9% (n = 118)
Firm: sources of information
Federal government	61.5%	47.4% {**} [*]	74.7%	62.0%	59.4% {*} [*]	76.7%
State government	53.7%	47.9%	59.4%	53.0%	52.3%	63.3%
Local government	47.4%	35.4% {*}	55.4%	58.8%	48.4%	40.1%
Payroll processing	66.3%	62.5% {+} [+]	78.8%	31.6% {***} [**]	67.1%	60.2%
HR association	59.1%	33.5% {***} [***]	73.0%	92.9% {*} [*]	57.1% {*}	72.9%
Internet search	66.3%	66.9%	71.1%	48.6%	63.9% {**} [**]	84.0%
News media	41.3%	32.3%	45.2%	48.5%	40.8%	45.3%
Employees: sources of information (Employer-reported)
Firm-provided materials	72.3%	59.0% {*} [*]	79.4%	87.2%	71.5%	78.0%
Payroll company	33.3%	40.5%	29.2%	23.0%	34.9%	21.8%
Union	7.5%	6.2%	7.4%	12.3%	7.0%	10.5%

⁺ P < 0.1; *P < 0.05; **P < 0.01; ***P < 0.001 in a test for differences relative to reference scenario (mid-size/non-low-wage firm). Adjusted significance levels control for size, wage level, essential/non-essential business status, and SF/non-SF county. Unadjusted significance levels are denoted in parentheses.

Changes to paid sick and family leave after COVID-19 onset

To provide context for employers’ attitudes toward the FFCRA, we examined changes in employer-provided PSL and PFL benefits. Using employer-reported measures, we found that during the pandemic, paid leave was more generous and more widely available. Appendix Table A6 presents the percentage of firms reporting various types of changes to PSL policies following COVID-19 onset. A total of 73.6% of firms overall report expanding PSL during COVID in at least 1 area. A higher percentage of low-wage firms increased PSL accrual rates (14.3% vs 3.4% of non-low-wage firms), expanded eligible employee groups (19.3% vs 5.1%), and expanded acceptable reasons for employees taking PSL (55.7% vs 39.9%). There were no significant differences by firm size in the percent of firms increasing PSL generosity during COVID, but small firms that reported increasing the maximum PSL days were more likely than mid-size firms to say that they would continue the higher leave after the end of the pandemic. Appendix Table A7 shows that less than half of employers reported increasing PFL generosity during COVID, in contrast to the overwhelming majority who indicated PSL expansions. There were also fewer distinctions by subgroup, though again, more low-wage firms reported expanding eligible employee groups than non-low-wage firms (15.4% vs 4.2%).

Employer support for PSL/PFL expansions

When asked about support for the FFCRA legislation, firms expressed stronger support for PSL than PFL provisions (63.5% for PSL vs 52.2% for PFL), with no significant variation by size or wage level (Appendix Table A8). Support for permanent versions of FFCRA PSL and PFL legislation was lower overall (42.0% for PSL, 44.0% for PFL). Figure 3 shows the distribution of support for PSL/PFL expansions in more detail. Almost half of firms were “very supportive” of FFCRA PSL provisions, while support for the PFL provisions was more evenly split between “very” and “somewhat supportive.” In both cases, very few were either “somewhat” or “very opposed”; the majority of responses that were not “supportive” fell into the neutral “neither opposed nor supportive” category. While strong opposition to permanent expansions was rare, substantially more respondents were “somewhat opposed” when compared to the temporary provisions.

Figure 3.

Detailed support for FFCRA. Source: Bay Area Employer Survey: Paid Leave During COVID-19.

Discussion

This paper provides new evidence about employers’ experiences with temporary paid leave mandated by the FFCRA policy and their attitudes toward making such policy expansions permanent. We use a sample of employers from the San Francisco Bay Area where there was a pre-existing unfunded mandate for employers to provide 3 days of PSL, and there was already a longstanding state-funded PFL program.

The FFCRA substantially expanded PSL availability, providing 10 days of federally reimbursed PSL (though only for COVID-19 related purposes) in addition to the pre-existing California unfunded mandate for employers to self-fund 3 days of PSL. Prior evidence suggests that the FFCRA increased leave-taking (predominantly PSL) during the COVID-19 pandemic,³⁰ increased the likelihood that employees stayed home when sick,³¹ and reduced the transmission of COVID-19.⁵

The FFCRA also provided an additional 10 weeks of federally-funded PFL for COVID-related child care. This differed in purpose from the pre-existing 6 weeks of California state-funded PFL available for new child bonding and caregiving of family members with severe illness. It also differed in bureaucratic administration methods, with the California PFL payments made directly to employees, whereas for FFCRA, employers were required to submit for tax credit reimbursement from the federal government.

Our results show that many firms in the San Francisco Bay Area did significantly expand PSL and PFL offerings during the pandemic, with low-wage firms reporting the largest expansions. Almost three-quarters of firms reported expanding their PSL policies in 1 or more ways. In contrast, less than half of firms reported increasing PFL generosity during the pandemic.

Lack of awareness and other difficulties may have prevented some firms from utilizing FFCRA benefits to their fullest. Most firms had heard of FFCRA, though a higher proportion were familiar with the PSL than PFL provisions. Small firms (20-49 employees) and low-wage firms were the least likely to have heard of these programs. This is consistent with our prior study of San Francisco's Paid Parental Leave Ordinance, which found the lowest awareness among low-wage and small firms.²² We also found that small firms were more likely to report challenges understanding FFCRA details, with over half of them reporting difficulty understanding eligibility, coverage, reimbursement, and interaction with state and local mandates. These challenges might be smaller in a less tumultuous non-pandemic period, and mitigated with experience, but they do reinforce the notion that greater simplicity and administrative support could enhance take-up of paid leave programs.

Despite the challenges, 64% of respondents familiar with FFCRA reported that their firm supported the PSL provisions (9% opposed), and 52% supported the PFL provisions (12% opposed). Support levels were similar by firm size and wage level. We note that these support levels could be over-estimated due, for example, to social desirability bias, and it is unknown how generalizable they are to other regions given that the Bay Area is generally politically liberal area and already accustomed to related paid leave policies.

FFCRA paid leave policy support must also be interpreted in the context of the unusual pandemic period, when PSL and PFL needs were extraordinarily high. Thus, we also report respondents’ level of support for permanent expansions (of nonspecific policies, eg, “a permanent version of the federal paid family leave policy, under which the federal government would reimburse businesses for part of the cost of qualifying family leaves”). Reported support for permanent expansion was somewhat lower than for the pandemic period policies, at just over 40% both for PSL and PFL. This support is substantially lower than the 72% of San Francisco firms in 2009 supporting San Francisco's 2007 PSL mandate (of 1 hour of PSL accrual per 30 hours worked, capped at 9 accrued days),²¹ or the 91% of firms in our sample that in 2018 supported California's PFL program (Appendix Table A2).

What do these results imply for potential future paid leave policies in the United States? At least in a politically liberal region such as the San Francisco Bay Area, there would potentially be substantial support for temporary FFCRA-like supplemental paid leave policies during future extraordinary periods such as the COVID-19 pandemic. There is also strong support for some level of mandated PSL, but only mixed support for permanently extending FFRCA-like additional federal PSL days beyond existing mandates, even if funded by the federal government. Thus, other regional or federal policies might consider current PSL levels in the Bay Area (such as 1 hour accrual per 30 hours worked) to be a useful level for guiding policy.

Similarly, the strong support for California's pre-pandemic tax-financed PFL program (providing 6 weeks of partial pay for bonding and caregiving leave), and lesser support for permanent expansion of FFCRA-like programs, can help guide future PFL elsewhere. Indeed, compromises in negotiating the 2021 version of the House-passed Build Back Better (BBB) Act³² were consistent with such considerations, proposing 4 weeks of paid family and medical leave.

Future research would be useful to better understand the tradeoffs of different bureaucratic mechanisms for delivering government-funded PFL. California's PFL requires each individual employee to navigate a complex government bureaucracy for claiming PFL benefits, which can result in some claimants missing out on benefits.²³ By contrast, the FFCRA required employers to continue payroll disbursements as usual to the employee on leave, and then submit for reimbursement from the federal government. Although smaller and lower-wage employers reported more difficulty with the FFCRA reimbursements, a simpler system of federal reimbursement could result in a more equitable PFL program from the perspective of workers from vulnerable populations.

Conclusion

Federal pandemic-era paid leave expansion under the FFCRA offers a potential model for future paid leave policy expansions. Support for both FFCRA PSL and PFL expansions was high overall, but certain challenges and mixed support for permanent FFCRA-like expansions will need to be explored in future studies elsewhere to inform future PSL and PFL policy proposals.

Supplementary material

Supplementary material is available at Health Affairs Scholar online.

Funding

Funding for this study was provided by the Robert Wood Johnson Foundation. The views expressed here do not necessarily reflect the views of the Foundation.

Data availability

The data that support the findings of this study are available from the first author, WHD, upon reasonable request.