employees who quit in a given period. In response,
Asked if the introduction of the PFL program had
92.8 percent of employers surveyed reported that PFL
resulted in “any cost increases,” 86.9 percent of employers
had a “positive effect” or “no noticeable effect.” And
responding indicated that it had not. Moreover, some
with respect to employee morale, 98.6 percent said that
employers (8.8 percent of those responding to this
the effect was either positive or not noticeable.
question) indicated that the PFL program had generated cost savings for their organizations, by reducing employee
Contrary to the pre-enactment claims of business
turnover and/or by reducing their own benefit costs when
groups that the PFL program would place a particularly
employees used the program instead of (or in combination
severe burden on small businesses, our survey found
with) employer-provided paid vacation, sick leave, or
that, among the minority of employers that did report
disability benefits. Indeed, for employers that do offer
negative effects, the larger establishments—those with
such benefits, the state PFL program often functions as
more than 100 employees—were actually overrepresented,
an indirect subsidy to their payrolls. Although only 8.8
as Table 1 shows.
percent of employers reported cost savings, the real figure is probably higher: 60.0 percent of employers surveyed
Table 1. Employer Assessments of PFL’s Effects,
reported that they coordinated their own benefits for exempt employees with the PFL program, and nearly as
by Number of Employees, 2010
many (58.4 percent) did so for non-exempt employees.
Less than 50 “No Noticeable Effect or Positive Employees Effect” On:
50–99 Employees
100+ Employees
All Employer Respondents
Productivity
88.8%
86.6%
71.2%
88.5%
Profitability/ performance
91.1%
91.2%
77.6%
91.0%
Turnover
92.2%
98.6%
96.6%
92.8%
who were out on leave. However, the great majority
Morale
98.9%
95.6%
91.5%
98.6%
of employers reported no such cost increases. They
The minority of employers who reported cost increases (13.1 percent) in most cases incurred additional hiring and training expenses to cover the work of employees
typically covered the work of employees on leave by
N=175
assigning the work temporarily to other employees.
Note: The number of employees shown refers to the stratum of firms from which the establishment was drawn and in some cases may not match current firm size due to the ef fects of the 2008-2009 recession.
Labor law makes a distinction between “exempt” and “nonexempt” employees. The latter are typically paid
Another concern business groups had raised when the
on an hourly basis and must be given overtime pay for
legislation was being debated was that PFL would be
work beyond a certain limit in accordance with federal
subject to abuse, with workers filing claims that were
and state requirements. In contrast, the former are
not medically legitimate. However, asked if they were
generally paid on a salary basis and are not covered
“aware of any instances in which employees that you
by overtime regulations. 7 For covering the work of
are responsible for abused the state Paid Family Leave
exempt workers on leave, temporary reassignment
program,” 91.2 percent of all employers surveyed
of work to other employees was the most common
replied “No.” And among the 9 percent of employers
method, cited by nearly all (96.6 percent) employers
who did report abuse, it was a relatively rare
surveyed. And nearly two-thirds (63.3 percent) of
occurrence: 27.2 percent of all employer respondents
employers surveyed used this method most often
who were aware of abuse reported they knew of only
in covering the work of non-exempt employees on
one instance, and nearly all (99.5 percent) knew of no
leave. Most of the rest reported that the most common
more than five instances in which abuse of PFL
method was to hire temporary replacements to cover
had occurred.
the work.
92
ucla L us k i n sch o o l o f publ i c affa i rs
CPO_2012_final.indb 92
12/13/11 4:13 PM