Paychex survey finds Main Street mixed on who should enforce and pay for mandatory paid family leave
On January 1, 2018, New York became the latest state to implement mandatory paid family leave legislation. And, according to a recent Paychex Small Business Survey, nearly half (48%) of small business owners say they would, on some level, support legislation requiring paid family leave. The study, conducted in late November 2017 by Paychex, Inc., a leading provider of integrated human capital management solutions for payroll, HR, retirement, and insurance services, also found that 35% of American small business owners lack strong feelings either way on the topic of mandatory paid family leave, while 18% oppose the idea.
The federal Family and Medical Leave Act (FMLA) already requires all covered employers with 50 or more employees to provide unpaid family and medical leave to eligible employees. As of January 1, 2018, New York joined California, New Jersey, and Rhode Island in providing statewide mandatory paid family leave for eligible employees. The District of Columbia and the state of Washington have also passed recent paid family leave legislation with scheduled benefit effective dates in 2020.
According to the Paychex survey, while 48% of small business owners say they would support legislation requiring paid family leave, larger businesses are much more likely to do so with 78% of those respondents with 20-500 employees indicating they would support such legislation.
“No matter how large or small the organization, most employers want to create a workplace culture that supports employees in times of need,” said Martin Mucci, Paychex president and CEO. “However, for small businesses, mandatory paid leave may present challenges. Whether it’s having a key member of a small team out of the office for an extended period of time or the back-end administration of such a program, mandatory paid leave will introduce new dynamics small business owners will have to navigate.
“Here at Paychex, we are proud to not only have announced our own paid family leave program for our nearly 14,000 employees in 2017, but also to employ more than 500 HR generalists across the country who are in place to help our impacted clients navigate this type of new legislation,” Mucci added.
Of those survey respondents who indicated they would be either strongly supportive (29%) or somewhat supportive (19%) of mandatory paid family leave legislation, exactly who business owners feel should establish the requirements are mixed. Forty-three percent feel the federal government should make the rules, 40% feel it should fall on private employers/individual businesses, and 17% say it should be up to state governments.
Those survey respondents who expressed support for mandatory paid family leave legislation are mixed on how such a program should be funded:
- 26% – Tax incentives for companies that voluntarily provide paid family leave
- 26% – Pretax payroll contributions from employees
- 15% – A combination of employer and employee pretax contributions
- 12% – New or higher taxes on higher income people
- 11% – A combination of new or higher taxes on higher income people and corporations
- 9% – Pretax payroll contributions from employers
- 1% – New or higher taxes on corporations
According to the new tax plan, which President Trump signed into law on December 22, 2017, some employers that provide “paid family and medical leave” to their employees may be eligible for a tax credit that ranges from 12.5%to 25% of wages paid to qualifying employees. This provision is available with respect to applicable wages paid in 2018 and 2019.
To learn more about the tax credit for employers who provide paid family leave benefits to their employees click here. To view an infographic highlighting data from the Paychex Small Business Snapshot, visit www.paychex.com/WORX.
About the Paychex Small Business Snapshot
Data included in the Paychex Small Business Snapshot was taken from the results of the Paychex Small Business Survey, administered by Bredin, a third-party research firm specializing in small business. The survey was conducted online between November 14, 2017 and November 23, 2017 and polled 257 principals of U.S. companies with 2-500 employees.
Disclaimer: The data cited in this news release represents the opinions of the survey respondents and not those of Paychex or its employees.
Paychex, Inc. (NASDAQ: PAYX) is a leading provider of integrated human capital management solutions for payroll, HR, retirement, and insurance services. By combining its innovative software-as-a-service technology and mobility platform with dedicated, personal service, Paychex empowers small- and medium-sized business owners to focus on the growth and management of their business. Backed by 45 years of industry expertise, Paychex serves approximately 605,000 payroll clients as of May 31, 2017, across more than 100 locations and pays one out of every 12 American private sector employees. Learn more about Paychex by visiting www.paychex.com, and stay connected on Twitter and LinkedIn.