Contributors

Jorge Hernandez-Perez is a senior at Columbia University majoring in Ethnicity and Race Studies with a concentration in Statistics. Currently, he is a research assistant at the Brookings Institution’s Center for Universal Education. Throughout his time at Columbia, he has researched social policies for and interned at the Brookings Institution, the Center on Poverty and Social Policy, the New York State Department of Education, the Energy, Equity, Housing, and Health Program (E2H2), and the Early Childhood Initiative at the Bipartisan Policy Center.

Key Things to Know

By January 2024, thirteen states and the District of Columbia had established mandatory paid family leave (PFL) programs, generally structured as social insurance. States finance benefits through payroll taxes levied on employers, employees, or both. No state’s tax rate surpassed 1.4 percent in 2024, and in most cases, rates fell well below.
When a family member needs full-time care—a spouse battles a chronic illness, a child arrives—a worker applies to their state’s social insurance. The insurance then replaces a portion of the eligible worker’s wages for a limited duration of leave.

**Source: Bureau of Labor Statistics, Employee Benefits Survey, March 2024**

Over half of the top 10 percent of earners enjoy PFL from their employers. Meanwhile, only a handful of low-wage workers have access to such benefits. In other words, absent the support of paid leave insurance, poor families sacrifice income, deplete savings, cut back basic needs and delay bill payments to fulfill caregiving obligations. Because care labor disproportionately falls on women, access to compensated leave also improves labor force attachment among mothers and could narrow the gender wage gap.

Case Study

In 2004, California launched the United States’ first PFL program with parameters for the duration of leave, the percentage of wages replaced, and eligibility.

Workers were entitled to approximately 55 percent of their regular wages for up to six weeks within a rolling twelve-month period.
Eligible employees took leave to care for a seriously ill child, spouse, parent, domestic partner, or child of a domestic partner. Employees who took time off of work to bond with a new child were also eligible for benefits.

Following the program’s debut, leave-taking increased among workers with newborns, as well as less-educated, unmarried, and non-white women.

Potential Pitfalls

In 2022, 37 percent of workers eligible for California’s social insurance earned less than $20,000 a year, with women, Black, and Latine Californians overrepresented. Such workers, however, made up only 14 percent of insurance claims. The limited number of low-income applicants for wage replacements also received compensation for a shorter period, although California law entitles them to eight weeks of PFL. Do low-income families encounter disruptive care obligations less frequently? Perhaps, their relatives inexplicably recover faster. What accounts for low-income workers’ reduced enrollment in public paid leave is less their need or willingness to apply than shortcomings in the policies of California’s program.

At the time, public PFL replaced only 70 percent of wages for workers earning less than $29,000 annually. However, rent, gasoline, food, health insurance, educational, and child care costs place a disproportionate burden on poor families, who depend on every dollar of their income. When states calculate PFL benefits at less than worker’s regular wages, low-income families on leave remain most vulnerable to financial hardship: Chances are, the 29 percent of households “one emergency from poverty” will fall behind on bills and turn to other public benefits to offset the loss in income. In other cases, eligible low-wage employees may forgo applying altogether. Between 2009 and 2010, nearly one-third of Californians who were aware of the insurance but refrained from applying cited the 55 percent wage replacement rate as their reason.

When social insurance replaces less than 100 percent of regular wages, decisions about who takes leave are informed by differences in parental incomes and gendered care expectations. These, to all appearances, personal decisions are influenced by structural inequities: Mothers working full-time earn 73.5 cents on the dollar paid to fathers. Even when both partners leave the workforce, income disparities dictate kitchen-table discussions around the duration of leave. Unsurprisingly, mothers remain on leave for longer periods in countries with replacement rates under 100 percent of income, even when different legal durations were accounted for. If benefit structures disproportionately push women to apply to the PFL insurance, leave to care for a loved relative could become a “mommy track.” Namely, employers stigmatize participation in the PFL program, questioning women’s dedication to the job and restricting their opportunities for promotion and raises.

Conclusion

To ensure more equitable access, social insurance must replace 100 percent of wages for low-income workers. In January 2025, California raised replacement rates to 90 percent for workers earning less than around $63,000 annually. Previously, only the first $153,164 of an employee’s earnings were taxed at 0.9 percent to fund the insurance: CEOs earning millions contributed no more than $1,378.48. To support the program’s expansion, California eliminated this cap on taxable earnings.

Paid Family Leave Social Insurances

Contributors

Key Things to Know

Case Study

Potential Pitfalls

Conclusion

Further readings

Paid Family Leave Social Insurances

Contributors

Key Things to Know

Case Study

Potential Pitfalls

Conclusion

Further readings

Facial Recognition Technology

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