National Academies Press: OpenBook

Work and Family: Policies for a Changing Work Force (1991)

Chapter: 6 New Family-Related Benefits

« Previous: 5 Standard Employee Benefits
Suggested Citation:"6 New Family-Related Benefits." National Research Council. 1991. Work and Family: Policies for a Changing Work Force. Washington, DC: The National Academies Press. doi: 10.17226/1537.
×
Page 114
Suggested Citation:"6 New Family-Related Benefits." National Research Council. 1991. Work and Family: Policies for a Changing Work Force. Washington, DC: The National Academies Press. doi: 10.17226/1537.
×
Page 115
Suggested Citation:"6 New Family-Related Benefits." National Research Council. 1991. Work and Family: Policies for a Changing Work Force. Washington, DC: The National Academies Press. doi: 10.17226/1537.
×
Page 116
Suggested Citation:"6 New Family-Related Benefits." National Research Council. 1991. Work and Family: Policies for a Changing Work Force. Washington, DC: The National Academies Press. doi: 10.17226/1537.
×
Page 117
Suggested Citation:"6 New Family-Related Benefits." National Research Council. 1991. Work and Family: Policies for a Changing Work Force. Washington, DC: The National Academies Press. doi: 10.17226/1537.
×
Page 118
Suggested Citation:"6 New Family-Related Benefits." National Research Council. 1991. Work and Family: Policies for a Changing Work Force. Washington, DC: The National Academies Press. doi: 10.17226/1537.
×
Page 119
Suggested Citation:"6 New Family-Related Benefits." National Research Council. 1991. Work and Family: Policies for a Changing Work Force. Washington, DC: The National Academies Press. doi: 10.17226/1537.
×
Page 120
Suggested Citation:"6 New Family-Related Benefits." National Research Council. 1991. Work and Family: Policies for a Changing Work Force. Washington, DC: The National Academies Press. doi: 10.17226/1537.
×
Page 121
Suggested Citation:"6 New Family-Related Benefits." National Research Council. 1991. Work and Family: Policies for a Changing Work Force. Washington, DC: The National Academies Press. doi: 10.17226/1537.
×
Page 122
Suggested Citation:"6 New Family-Related Benefits." National Research Council. 1991. Work and Family: Policies for a Changing Work Force. Washington, DC: The National Academies Press. doi: 10.17226/1537.
×
Page 123
Suggested Citation:"6 New Family-Related Benefits." National Research Council. 1991. Work and Family: Policies for a Changing Work Force. Washington, DC: The National Academies Press. doi: 10.17226/1537.
×
Page 124
Suggested Citation:"6 New Family-Related Benefits." National Research Council. 1991. Work and Family: Policies for a Changing Work Force. Washington, DC: The National Academies Press. doi: 10.17226/1537.
×
Page 125
Suggested Citation:"6 New Family-Related Benefits." National Research Council. 1991. Work and Family: Policies for a Changing Work Force. Washington, DC: The National Academies Press. doi: 10.17226/1537.
×
Page 126
Suggested Citation:"6 New Family-Related Benefits." National Research Council. 1991. Work and Family: Policies for a Changing Work Force. Washington, DC: The National Academies Press. doi: 10.17226/1537.
×
Page 127
Suggested Citation:"6 New Family-Related Benefits." National Research Council. 1991. Work and Family: Policies for a Changing Work Force. Washington, DC: The National Academies Press. doi: 10.17226/1537.
×
Page 128
Suggested Citation:"6 New Family-Related Benefits." National Research Council. 1991. Work and Family: Policies for a Changing Work Force. Washington, DC: The National Academies Press. doi: 10.17226/1537.
×
Page 129
Suggested Citation:"6 New Family-Related Benefits." National Research Council. 1991. Work and Family: Policies for a Changing Work Force. Washington, DC: The National Academies Press. doi: 10.17226/1537.
×
Page 130
Suggested Citation:"6 New Family-Related Benefits." National Research Council. 1991. Work and Family: Policies for a Changing Work Force. Washington, DC: The National Academies Press. doi: 10.17226/1537.
×
Page 131
Suggested Citation:"6 New Family-Related Benefits." National Research Council. 1991. Work and Family: Policies for a Changing Work Force. Washington, DC: The National Academies Press. doi: 10.17226/1537.
×
Page 132
Suggested Citation:"6 New Family-Related Benefits." National Research Council. 1991. Work and Family: Policies for a Changing Work Force. Washington, DC: The National Academies Press. doi: 10.17226/1537.
×
Page 133
Suggested Citation:"6 New Family-Related Benefits." National Research Council. 1991. Work and Family: Policies for a Changing Work Force. Washington, DC: The National Academies Press. doi: 10.17226/1537.
×
Page 134
Suggested Citation:"6 New Family-Related Benefits." National Research Council. 1991. Work and Family: Policies for a Changing Work Force. Washington, DC: The National Academies Press. doi: 10.17226/1537.
×
Page 135
Suggested Citation:"6 New Family-Related Benefits." National Research Council. 1991. Work and Family: Policies for a Changing Work Force. Washington, DC: The National Academies Press. doi: 10.17226/1537.
×
Page 136
Suggested Citation:"6 New Family-Related Benefits." National Research Council. 1991. Work and Family: Policies for a Changing Work Force. Washington, DC: The National Academies Press. doi: 10.17226/1537.
×
Page 137
Suggested Citation:"6 New Family-Related Benefits." National Research Council. 1991. Work and Family: Policies for a Changing Work Force. Washington, DC: The National Academies Press. doi: 10.17226/1537.
×
Page 138
Suggested Citation:"6 New Family-Related Benefits." National Research Council. 1991. Work and Family: Policies for a Changing Work Force. Washington, DC: The National Academies Press. doi: 10.17226/1537.
×
Page 139
Suggested Citation:"6 New Family-Related Benefits." National Research Council. 1991. Work and Family: Policies for a Changing Work Force. Washington, DC: The National Academies Press. doi: 10.17226/1537.
×
Page 140
Suggested Citation:"6 New Family-Related Benefits." National Research Council. 1991. Work and Family: Policies for a Changing Work Force. Washington, DC: The National Academies Press. doi: 10.17226/1537.
×
Page 141
Suggested Citation:"6 New Family-Related Benefits." National Research Council. 1991. Work and Family: Policies for a Changing Work Force. Washington, DC: The National Academies Press. doi: 10.17226/1537.
×
Page 142
Suggested Citation:"6 New Family-Related Benefits." National Research Council. 1991. Work and Family: Policies for a Changing Work Force. Washington, DC: The National Academies Press. doi: 10.17226/1537.
×
Page 143
Suggested Citation:"6 New Family-Related Benefits." National Research Council. 1991. Work and Family: Policies for a Changing Work Force. Washington, DC: The National Academies Press. doi: 10.17226/1537.
×
Page 144
Suggested Citation:"6 New Family-Related Benefits." National Research Council. 1991. Work and Family: Policies for a Changing Work Force. Washington, DC: The National Academies Press. doi: 10.17226/1537.
×
Page 145
Suggested Citation:"6 New Family-Related Benefits." National Research Council. 1991. Work and Family: Policies for a Changing Work Force. Washington, DC: The National Academies Press. doi: 10.17226/1537.
×
Page 146
Suggested Citation:"6 New Family-Related Benefits." National Research Council. 1991. Work and Family: Policies for a Changing Work Force. Washington, DC: The National Academies Press. doi: 10.17226/1537.
×
Page 147
Suggested Citation:"6 New Family-Related Benefits." National Research Council. 1991. Work and Family: Policies for a Changing Work Force. Washington, DC: The National Academies Press. doi: 10.17226/1537.
×
Page 148
Suggested Citation:"6 New Family-Related Benefits." National Research Council. 1991. Work and Family: Policies for a Changing Work Force. Washington, DC: The National Academies Press. doi: 10.17226/1537.
×
Page 149
Suggested Citation:"6 New Family-Related Benefits." National Research Council. 1991. Work and Family: Policies for a Changing Work Force. Washington, DC: The National Academies Press. doi: 10.17226/1537.
×
Page 150
Suggested Citation:"6 New Family-Related Benefits." National Research Council. 1991. Work and Family: Policies for a Changing Work Force. Washington, DC: The National Academies Press. doi: 10.17226/1537.
×
Page 151
Suggested Citation:"6 New Family-Related Benefits." National Research Council. 1991. Work and Family: Policies for a Changing Work Force. Washington, DC: The National Academies Press. doi: 10.17226/1537.
×
Page 152
Suggested Citation:"6 New Family-Related Benefits." National Research Council. 1991. Work and Family: Policies for a Changing Work Force. Washington, DC: The National Academies Press. doi: 10.17226/1537.
×
Page 153
Suggested Citation:"6 New Family-Related Benefits." National Research Council. 1991. Work and Family: Policies for a Changing Work Force. Washington, DC: The National Academies Press. doi: 10.17226/1537.
×
Page 154

Below is the uncorrected machine-read text of this chapter, intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text of each book. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

6 New Family-Related Benefits The changing composition of the work force increased numbers of em- ployees combining family and work responsibilities has made employers, unions, and elected officials more aware of the severe problems workers often face in fulfilling both job and home obligations. The majority of employers have taken little formal action to reduce this tension by means such as altered work schedules, special leave arrangements, or new types of benefits to purchase services previously provided by family members. How- ever, a small number of firms have pioneered innovative programs and are experimenting with changes in established programs. In addition, federal and state laws enacted over the last decade have created new rights, entitle- ments, and tax incentives affecting employee benefits. This chapter de- scribes these developments and reviews research assessing the availability, demand for, and impact of such programs. EMPLOYER-SPONSORED PROGRAMS Some very innovative work policies and programs designed to ease work-family tensions are the result of employers' increased attention to the problems their employees face in meeting home and job responsibilities. They are quite varied, ranging from flexible work schedules to new flexible benefits that can be tailored to individual family preferences. Table 6-1 shows the types of benefits offered today. Although the adoption of radically new policies and programs is largely limited to a relatively small number of firms, mainly in industries with severe recruitment problems (e.g., hospitals), em- ployer interest in these policies and programs is widespread. Management literature over the last decade has reflected increasing con 114

NEW FAMILY-RELATED BENEFITS 115 TABLE 6-1 Life-Cycle Stages and the Range of Employer-Sponsored Policies and Programs Available Life-Cycle Financial Programs and Counseling and Stage Assistance Services Information Time New worker Health and dental Fitness center Wellness and Holidays insurance Employee health Vacations Disability insurance assistancepro- promotion Sick time Life insurance grams (EAPs) programs Disability leaves Pension and/or other Health risk EAPs Leaves of absence retirement programs appraisals (deathin family, Other benefits other) Marriage Spouse benefits Spouse reloca- EAPs Marriage leaves Flexible benefits lion Spouse becomes Job search assis joint annuitant in lance for pension plan spouse Pregnancy Adoption benefits Prenatal Parental leaves and adoption Medical coverage for courses of absence prenatal and post- Information Maternity disability natal care from benefits leaves Coverage for delivery manager at hospital or Use of accumu birthing center lated sick Change in beneficiary leaves Coverage for Alternative work employee benefits schedules and job arrange ments Childrearing Medical and dental On-site child care Referrals Parental leaves coverage for Family day care Seminars Flexible work dependents School-age care Support groups hours Well-baby care Sick care Handbooks Use of accumu Dependent care as- Breastfeeding EAPs lated sick sistance plans on site leaves (DCAPs) Earned time-off Vouchers' discounts policies Life insurance for Sick leave for dependents family illness Divorce Garnisheeing wages Stepchildren fees coverage in medical EAPs and dental plans Divorced spouse and dependents can con- tinue medical coverage for up to 36 months (COBRA) Prepaid legal EAPs Personal leaves of absence table continues

116 TABLE 6-1 Continued Life-Cycle Financial Programs and Counseling and Stage Assistance Services Information Time WORK AND FAMILY: POLICIES FOR A CHANGING WORK FORCE Elder care DCAPs Long-term care for dependents Respite care Adult day care Prepaid legal fees EAPs Referrals Seminars Support groups Handbooks Family leaves Flexible work hours and job arrangements Use of accumu- lated sick leave Earned time-off policies Retirement PensionsPreretirement Part time employ Retiree health andcounseling ment for retirees dental care; lifeNewsletters insurancefor retirees Long-term careTelephone 401(k) plans and otherhotlines before-tax savings plans Death Spouse and eligible EAPsGrief counsel- Funeral leaves dependents can ing through Personalleavesof continue medical EAPs absence coverage for up to 36 months Beneficiaries receive life insurance and other benefits Spouse receives at least 50~c of remaining benefits SOURCE: Friedman and Gray (1989:2-3). Reprinted by permission. corn about work and family issues. A review of the Periodicals Index found a gradual decline between 1959 and 1980 in the number of pages devoted to adversarial techniques and organizational loyalty and an in- creased number dealing with employee motivation and family life (Kanter, 1983~. Another indicator of the new concerns is the frequent addition to employer and employee surveys of questions about new benefits (U.S. Cham- ber of Commerce, 1987; Bureau of Labor Statistics, 1988b, 1989a). These surveys and the studies based on them provide the basis on which we have assessed the availability of new types of programs and the characteristics of the businesses that provide them. The programs discussed include: paid

NEW FAMILY-RELATED BENEFITS TABLE 6-2 Family-Related Leaves Type of Leave 117 Definition Maternity Leave exclusively for women related to pregnancy, childbirth, or adoption but not tied to the actual length of pregnancy related work disability. Paternity Leave during or after childbirth or adoption for the father. Pregnancy disability Medical leave for pregnancy- and childbirth-related disabilties. Disability related to normal childbirth is typically 6 to 8 weeks. Parental or infant care Leave after childbirth or adoption for mothers and fathers for the purpose of infant care, independent of mother's disability. Family Leave for employee care of ill children, ill spouses, ill parents, or other ill or disabled family members. NOTE: Any of these leaves may either be unpaid or provide partial or total wage replace ment and may provide for continuation of some or all benefits (typically health insurance) and a right to return to the same or a comparable job. The wage replacement may be supplied by the employer or by some other source, such as employer insurance or a state fund. and unpaid leave, alternative work schedules and locations, family support services, and flexible benefit packages. Paid and Unpaid Leave As discussed in Chapter 5, paid time off is an important employee ben- efit, accounting for a major share of total compensation. It includes vaca- tions; holidays; leaves for military duty, jury duty, funerals, disability, and sickness; and, to a limited extent, personal leave. Recently, much attention has focused on a variety of family-related leave policies, defined in Table 6-2. Such leaves, paid and unpaid, are mainly intended to address the need for time off for pregnancy and childbirth as well as care for infants and sick family members (Saltford and Heck, 1989; Trzcinski, 1989; Zigler and Frank, 1988; Ross, 1990; U.S. Chamber of Commerce, 1989~. We describe below the need or demand for dependent care leave and current policies and/or programs to meet that need. This section explains the reasons for the attention this subject is receiving and considers possible new approaches to meet the perceived needs of families. Scope of the Problem On average, slightly more than 2 million employed women (2 percent of the civilian labor force) give birth to or adopt a child each year (Spalter- Roth et al., 1989~. And 51 percent (1.9 million) of all women with infants (up to age 1) were in the labor force in June 1988 (Bureau of the Census,

118 WORK AND FAMILY: POLICIES FOR A CHANGING WORK FORCE 1989a). Women working full time in medium- and large-sized private firms and in government are usually able to piece together 2 to 4 months of paid leave for pregnancy and childbirth (with access to some benefits) by using combinations of vacation time and sick, disability, maternity, and personal leaves. As we saw in Chapter 5, however, approximately 60 percent of full- time employees are not covered by short-term disability insurance in me- dium- and large-sized firms, and in small firms 54 percent do not have sick leave. In 1989, about 40 percent of women in larger firms had access specifi- cally to maternity leave (others, as noted above, use combinations of vaca- tion and sick leave). Only 3 percent of mothers, however, are entitled to paid maternity leave the remaining 37 percent use unpaid leave (Table 6- 3~. An analysis of 1981-1985 data from the Survey of Income and Program Participation found that almost 47 percent of employed women who had first births reported having some type of paid sick leave or unpaid maternity leave that included a job guarantee, compared with 16 percent in 1961-1965 (O'Connell, 1990~. Despite this increase, of the 54 percent without formal leave, 28 percent quit their jobs, 20 percent had informal unpaid leave but no job guarantee, 2 percent never stopped working, and 4 percent said they lost their job. From these diverse sources, combined with data on women's concentration in part-time jobs, in small firms, and in industries less likely to have benefits (also discussed in Chapters 2 and 5), we estimate that the majority of women (approximately 60 percent) do not have paid leave for pregnancy and childbirth. Many women may not have access to unpaid leave or a job guarantee, but we cannot estimate the proportion on the basis of the available data. This problem is being addressed in some states by legislation. There are no national legal requirements for employers to offer any kind of leave to any of their employees, not even sick leave; some employ- ers offer none and others offer very minimal leave. However, voluntarily provided benefits are regulated by state and federal laws. According to the current interpretation of the federal Pregnancy Discrimination Act (PDA) of 1978, passed as an amendment to Title VII of the Civil Rights Act of 1964, if employers with 15 or more employees have a sick leave or disabil- ity program, then physical problems related to pregnancy and childbirth must be covered like any other sickness or disability. In addition, some city and county jurisdictions have fair employment laws similar to the PDA governing family leave provisions. In some states, fair employment prac- tice laws extend PDA-type requirements to employers of five or more em- ployees (e.g., California). In Puerto Rico and the five states that have short-term disability laws, all employers are covered (Spalter-Roth et al., 1989), although all do not require the employer to guarantee the em- ployee's job. About one-quarter of U.S. workers live in these jurisdictions.

NEW FAMILY-RELATED BENEFITS 119 TABLE 6-3 Family-Related Benefit Programs for Selected Full-Time Employees (percent eligible), 1989 Private Medium- and Large-Sized Firms All Professional/ Technical/ Production/ Program Employees Administrative Clerical Service Leave Vacation 97 98 99 95 Personal leave 22 28 30 14 Sick leave 68 93 87 44 Maternity leavea Paid 3 4 2 3 Unpaid 37 39 37 35 Paternity leavea Paid 1 2 1 1 Unpaid 18 20 17 17 Sickness and accident insurance 43 29 29 58 Family benefits Employer assistance for child care 5 6 6 3 Adoption financial assistance 5 8 6 3 Elder care 4 2 Long-term care insurance 3 3 3 2 Health promotion programs In-house infirmary 36 40 35 34 Wellness programs 23 30 25 19 Employee assistance programs 49 57 50 44 Flexible benefit plansb 9 14 15 3 Reimbursement accountsC 23 36 31 11 aPaid or unpaid leave provided to new mothers or fathers for the specific purpose of caring for their child during the early days of infancy. This plan is separate from any sick leave, annual leave, vacation, personal leave, or short-term disability plan that the employee may take. bFlexible benefit plans, also known as flexible compensation and cafeteria plans, allow employees to choose between two or more benefits or benefit options, including cash, in determining their individual benefit packages. CReimbursement (flexible spending) accounts, which are used to finance benefits or ex- penses unpaid by insurance or benefit plans, may be part of a flexible benefits program or stand alone (free-standing accounts). These accounts may be financed by the employer, em- ployee, or both. The employee contribution is made through a salary reduction arrangement. SOURCE: Bureau of Labor Statistics (199Oa:Tables 1 and 2).

120 WORK AND FAMILY: POLICIES FOR A CHANGING WORK FORCE Additional leave to care for an infant, sick child, or other ill family members was rarely available in the past, although some employers have made informal arrangements to grant such leave on a case-by-case basis. Recently, 15 states have passed some form of parental or family leave laws for men and women; these laws generally exempt small employers, however (see Table 6-4~. The probable impact of a mandatory leave entitlement has been a matter of considerable controversy. The General Accounting Office (1989) esti TABLE 6-4 Family Leave Legislation Since 1987 Weeks per 1 2-Month Employers State Period Purpose and Eligibility Covered Other Provisions CT 24 max. Birth, adoption, Public-sector Health coverage medical disability, employees continuous ill child/spouse/parent 16a (as above) Private sector, (as above) 75+ employees ME 8a max. Birth, adoption, Private sector, Health coverage seriously ill 25+; city, town, continuous but at employee/child/ municipal agency, employee's spouse/parent 25+; all other expense public sectors MD 12 max. Birth, adoption, State employees Health coverage foster child, ill child/ of executive suspended unless spouse/parent/dependent branch employee pays MN 6 Birth, adoption 21+ Health coverage (mothers and fathers employees continuous can use concurrently) ND avg. Birth, adoption, or State employees Health insurance b foster child, child/parent/ continuous at spouse with serious employee's health condition expense NJ 12a Birth, adoption, 100+ for first year, Health insurance seriously ill child/ 75+ for second continuous spouse/parent and third years, 50+ for fourth year OK c Birth, adoption, terminally or critically ill child/dependent adult OR 12 State employees Birth, adoption 25+ employees Health coverage continuous

NEW FAMILY-RELATED BENEFITS TABLE 6-4 Continued 121 Weeks per 1 2-Month Employers State Period Purpose and Eligibility Covered Other Provisions PA 18,a26max. Birth, adoption, 10+ employees Health insurance serious health condition continuous of any family member RI 13 Birth, adoption, Private sector, 50+ Health coverage ill child employees; public continuous sector, 30+ employees TN 16 Birth, adoption 100+ employees Continuous benefits (women only) not required VT 12 max. Maternity (birth only), Private sector, Health coverage ill employee 10+ employees continuous WA 12a Birth, adoption, Private sector, Continuous benefits terminal illness 100+; local not required of child government 100+ employees WV 12 max. Birth, adoption, ill child/ spouse/parent State employees and county school board employees Health insurance continuous WI 6 max. Birth, adoption 50+ employees Health coverage continuous 2d Ill child/spouse/parent 50+ employees (as above) aIn a 24-month period. Length of leave based on hours worked; 16 weeks on average for full-time employees. CAnnual leave, enforced leave, leave without pay, sick leave due to pregnancy. dAny 2-week period during the year. SOURCE: Adapted from Institute for American Values (1989, 1990). mates that in one year 6O,000 employees in firms of 50 or more employees may need time off to care for a seriously ill child, 165,000 for a seriously ill parent, and 676,000 for a seriously ill spouse; few at present have such leave. An estimated 610,000 employees may have a serious illness, and 60 percent do not have short-term disability protection. The numbers would be significantly larger if smaller firms were included. Even in states in which family leave entitlements are established by law, there are problems in their use. The Equal Employment Opportunity Commission (EEOC), the agency responsible for enforcing the Pregnancy Discrimination Act, reports that during the last 3 years they received a yearly average of 3,400 charges of employer discrimination related to

22 WORK AND FAMILY: POLICIES FOR A CHANGING WORK FORCE maternity. Of the average 2,500 maternity cases closed each year during this period, 25 percent were settled without a finding of discrimination but usually resulted in some relief granted to the employee. In about 3 percent of cases, the EEOC found reasonable cause to believe the employer dis- criminated. Although this represents only a little over a quarter of the cases, it demonstrates significant compliance problems. Also, formal complaints are likely to represent only a fraction of the instances in which discrimination may have occurred, since many employees may not have adequate knowledge of the law, may fear reprisal, or may not want to make the effort to bring a complaint. The EEOC also takes maternity cases to litigation: for example, one Title VII suit alleged discriminatory layoffs and discharges for female employees due to pregnancy. In another, a court action was filed against an employer for not reinstating female employees wanting to return to work after pregnancy (Equal Employment Opportun ity Commission, 1985~. There is other evidence of compliance problems. O'Connell (1990), using SIPP data that included over 5,000 women and covered the years between 1981 and 1985, found that over4 percent of the women reported that they were let go from their jobs because of pregnancy. According to another survey, this one of 200 small establishments in two Northeast communi- ties, one-fifth of firms with fewer than five employees did not provide statutory benefits such as Social Security and unemployment insurance (Kamerman and Kahn, 1987~. Trzcinski (1989) found that among 600 Connecticut firms a substantial number offered no maternity or parental leave, despite a state maternity leave statute; no follow-up questions were pursued, however, to clarify what appeared to be violations of the law. Such lack of compliance warrants further study. The availability of family leave affects men as well as women. An esti- mated 3.2 million employed men have wives who give birth or adopt a child each year. Approximately 19 percent of men in medium- and large- sized firms have access to paternity or parental leave, but only 1 percent have paid leave specifically for these purposes (see Table 6-3~. Leaves for fathers are more common for state employees (Makuen, 1988; Pleck, 1988, 1989~. Among New York state employees, for example, all parents are entitled to unpaid infant care leave for up to 7 months, and they may re- ceive up to 2 years at the discretion of the supervisor (Makuen, 1988; Cook, 1989~. The use of leave by fathers even when it is available also appears to be rare. One study found that, among 119 firms that offered unpaid leaves, only nine claimed that any fathers used them (Catalyst, 1986~. The reason that men do not use such leaves more frequently appears to be related to the often negative attitude of supervisors (reviewed in Chapter 3~. A small number of fathers who feel strongly about using their leave entitle

NEW FAMILY-RELATED BENEFITS 123 meets have filed administrative complaints of discrimination when denied leave (fleck, 1989~. Data on women's use of leave for pregnancy and childbirth are scant. Use is likely to be determined by availability but also by job demands, attitudes of other employees and managers, and whether the leave is paid or unpaid. According to analysis of SIPP data, 47 percent of pregnant workers reported using leave, with either pay or a job guarantee, for a first pregnancy (O'Connell, 19901. Workers using leave were relatively older, college-educated, full-time employees who worked until their last trimester of pregnancy. Women are less likely to be entitled to maternity benefits for second or subsequent pregnancies because, at that stage of their work life, mothers are more likely to be working in part-time and temporary positions than are women without children, and such positions are less likely to pro- vide maternity benefits. Available evidence suggests that having leave- either paid or with a return job guarantee increases the likelihood of an early return to work following childbirth (O'Connell, 1990~. Low-income women, however, find it very difficult to utilize unpaid leave especially if critical benefits such as health insurance are discontinued. Without the guarantee of a position at the end of maternity leave, women are faced with the choice of returning to work earlier than they would like to or than is advisable or dropping out of the labor force. Dropping out of the labor force is the preferred choice for some women and their families. However, the economic costs of a break in employment are high. Using projections from the Panel Study of Income Dynamics ~ 1979- 1984), Spalter-Roth and Hartmann (1990) estimate that childbirth and adoptions cost women $31 billion in foregone wages annually. In addition, women terminating employment generally forfeit health insurance and reduce their opportunity to earn pension benefits (Spalter-Roth and Hartmann, 1990; Trzcinski, 1988b); the latter exposes them to greater risk of poverty and the need for public assistance in old age. Both lower wages and job loss result in larger numbers of women in need of public assistance and, consequently, in higher costs for income assistance programs. Spalter-Roth and Hartmann (1990) estimate public assistance costs of $108 million annu- ally for employed women who quit work due to lack of maternity leave. Impact on Employers Little research has been done in this country to learn how employers manage when they offer maternity or parental leaves. Available evidence suggests that clerical workers are most often replaced by temporary hires, while the tasks of production workers are generally covered by others working overtime. In the case of managers in larger firms, colleagues tend to take on extra work (General Accounting Office, 1987a; Trzcinski, 1989~.

24 WORK AND FAMILY: POLICIES FOR A CHANGING WORK FORCE Small firms often claim to experience difficulties, for example, not hav- ing enough people to share the work of someone who is absent. In a study of 30 small firms in three states, Butler and Wasserman (1988) found that they had financial and operational problems, as well as difficulties with client relationships. The severity of the problems faced by small employers relates to the length of leave used by an employee. Costs for various types of leave may include wage replacement, contin- ued benefits for workers taking leave, wages and overtime pay for replace- ment workers, and perhaps reduced productivity. Very few data are avail- able on the costs of current voluntary leave programs beyond those noted in Chapter 5, although there is some information from states that require paid short-term disability leaves (Berman, 1987~. Wage replacements in these states are covered from an insurance fund. In two of the states, em- ployers are not required to contribute to the fund, and in all states there is at least a small employee contribution. In 1985, pregnancy-related disability claims ranged from 11 to 19 per- cent of total claims, and the average length of leave was about 10 weeks (Berman, 1987~. In New York and New Jersey, average total disability benefits paid were lower for women than for men. In New Jersey, women took 3 more days of leave than men, but benefits went primarily to women in lower-wage jobs. Only 3 percent of women taking leave earned $25,000 or more a year. Governor Kean concluded that the New Jersey program is not a major hardship on employers and "fosters economic survival for low and middle income women who wish to have children" (Keen, 1988~. The data and the studies are far too fragmentary to reach firm conclu- sions about the impact that mandatory unpaid leave would have on employ- ers and on labor markets. Many large employers already provide paid and unpaid leave. Assuming that the length of job-protected leave required does not exceed current norms (6 months or less), there is unlikely to be an adverse impact on larger firms. In smaller firms, or even mid-sized firms primarily employing women, the effects are less easy to predict. Limited research on existing programs that include small firms suggests that such policies are feasible; however, the impact has not been fully explored. Alternative Schedules and Locations Time and space that is, when, how much, and where people work- provides a basic framework for employment and family life. Most employ- ees in industrial economies have traditionally been expected to work for a particular period, usually 9 am to 5 pm, Monday through Friday. As of 1985, however, only 46 percent of women and 42 percent of men in nonagricultural occupations were found to work a 35- to 40-hour, 5-day week. Some 31 percent of women and 14 percent of men worked fewer

NEW FAMILY-RELATED BENEFITS than 35 hours a week; others-9 percent and 26 percent, respectively worked 49 hours or more (Presser, 1989~. 125 ~r Part-time work, shift work, overtime, second jobs, home-based work, and, recently, flexible schedules are growing (Bailyn, 19881. The down- sizing and restructuring of many firms, technological changes, and the growth of the service economy are making these changes both possible and necessary. Flexibility appears to be increasingly called for, if not always implemented, in the new corporate world (e.g., Reich, 1987; Kanter, 1989~. It is also a way to help workers meet the conflicting demands of work and family, although not all the effects of the nonstandard arrangements are beneficial to employees. In a Conference Board study of 500 large employers, 90 percent of the firms surveyed offered regular part-time work and 50 percent offered some form of flextime (Christensen, 19893; 35 percent offered a compressed work week, and almost 20 percent offered job sharing, home-based work, and phased retirement. In the financial services and insurance sectors, flexibil- ity is most likely to be in the form of part-time work and job-sharing ar- rangements. Manufacturing industries are more likely to offer compressed work weeks, phased retirement, and home-based work. In recent years, hos- pitals have developed some of the most innovative work configurations to cope with severe shortages in nursing personnel. These include special Saturday-Sunday work shifts of 12 hours each day with pay and benefits equivalent to a regular 40-hour work week. Managerial work is the least amenable to flexible arrangements, while professional positions may allow for more discretion. Most programs in- volve technical and less-skilled work, and resistance to flexibility remains strong. "Top management is often reluctant to implement changes; unions hesitate to negotiate new arrangements; supervisors find it difficult to manage workers on flexible schedules; and employees who cannot partici- pate in certain arrangements such as flextime resent those who can" (Chris- tensen, 1989:11~. Part-Time Work We focus on the issues of part-time work, flexible schedules, and alter- native work locations because they are a means of accommodating em- ployees with family responsibilities. Part-time work (defined by the U.S. Department of Labor as working less than 35 hours a week), as well as such nontraditional arrangements as temporary and subcontract work, are all increasing (Belous, 1989; Kahne, 1988~. As we saw in Chapter 2, their growth has been greatest in the service sector. Several studies found that traditional part-time work appears to be helpful mainly to women living with employed husbands, particularly the wives of skilled blue-collar

26 WORK AND FAMILY: POLICIES FOR A CHANGING WORK FORCE workers (Blank, 1989; Moen, 1985; Ferree, 1987), although little research has been done on the extent to which shorter or more flexible hours are valued. Blank (1989) concluded that the impact of part-time work on wages is less important than previously thought when self-selection is taken into account. Other studies, however, have generally found that low wages and sparse benefits are associated with part-time work; it is therefore a poor alternative for single parents or couples who must rely on wives' incomes and benefits in times of recession and layoffs. In 1987 the median hourly earnings for part-time workers were $4.42 an hour, compared with $7.43 for full-time workers, and not all of the difference is accounted for by indi- vidual and job characteristics (Blank, 1989~. Furthermore, 84 percent of part-time workers do not receive health insurance as an employee benefit. To the extent that they are members of families of workers who receive health insurance for their dependents, this need not be a problem; it is often serious, however, for the families of the 20 percent of part-time workers who are heads of households, many of whom live in poverty (Levitan and Conway, 1988~. The absence of health insurance benefits for these families is very significant. Evidence on the relationship between part-time work, lower wages, and lower benefits comes from such sources as employer survey data (e.g., Bureau of National Affairs, 1988a) and multivariate re- gression estimates (e.g., Ehrenberg et al., 19881. Evidence suggests that part-time work also has some positive effects on the family stress problems discussed in Chapter 3. For example, in a Swedish study, mothers' reports of daily fatigue and psychological stress related to the birth of a first child were significantly reduced by both leave arrangements and part-time schedules (Moen, 1989~. U.S. studies suggest that negative effects of maternal employment on mother-infant relation- ships are associated only with full-time work (Hayes et al., 1990~. There are few data available on employer motivation for using part-time workers or on the overall costs and benefits. A Bureau of National Affairs 1988a) survey of 223 members and an earlier survey of 68 firms (Nollen, 1982) both concluded that scheduling requirements, particularly large daily or weekly variations in workload, were the primary reason for hiring part-time workers. Employers report some savings related to lower wages, benefits, and overtime, as well as less absenteeism and turnover (Nollen, 1982~. Several studies by economists also found the use of part-time workers related to lower wages as well as industry and size of firm (Blank, 1989~. At the same time, employers report increases in admini-strative and training costs and managerial problems for those supervising part-time workers. Recently, what Kahne (1988) calls "new concept part-time work" has become more common: permanent part-time work (with some job security), job sharing (with two people doing one full-time job), work sharing (often

NEW FAMILY-RELATED BENEFITS 127 the result of production cutbacks), and phased retirement. There is also part-time work as a temporary arrangement for full-time workers, used to accommodate family care needs. This is part of the life-cycle approach to work, outlined in Table 6-1, which recognizes that people may need such an arrangement while children are young or a family member is seriously ill, but they want to maintain their commitment to return to full-time work. For employees, these arrangements tend to provide job attachment, prorated wages, some benefits, and seniority. Employers are more likely to retain an experienced employee and avoid additional recruitment and training costs. Despite these advantages, such arrangements are among the least frequently offered options. The new types of part-time work do not involve savings through lower wages, and costs tend to be higher. Managerial jobs have proved particularly difficult to adapt to part-time status. Flexible Schedules Flextime offers another alternative to standard work schedules. It gener- ally means variations in the usual rigidly scheduled workday. Experiments with flextime in the United States began in the 1970s, and by the 1980s about 13 percent of the full-time and 43 percent of the part-time labor force were on some type of flexible schedule (Bureau of Labor Statistics, 1989a). Government and service workers are more likely to have flextime options than other workers (Mellor, 1986~. Table 6-S shows that the likelihood of a firm's offering a flexible schedule policy formal or informal differs only slightly by size of firm. There is a wide range of possible flextime options. Under flextime, employees choose a starting and ending time, work the standard number of hours per day (most often including a core period such as 10 am to 2 pm) and remain with a chosen schedule for a set period of time. Under com- pressed time, employees work the standard amount of time each week but do so in less than 5 days. Under maxiflex, employees may vary their daily hours as they wish and are not required to be present for any core period. There is some evidence that additional management and scheduling time are required, as well as some concern about potential employee abuses. Yet several studies find that flexible schedules modestly reduce absentee- ism and tardiness, as well as somewhat increase job satisfaction and em- ployee morale, at relatively little cost (Nollen, 1979, 1982; Staines, 1989; Christensen and Staines, 1990; Bureau of National Affairs, 1988a). There is a growing interest in alternative schedules, particularly among large employers (Christensen, 1989~. It is widely believed that flextime would be most helpful to women because they continue to be the main providers of care for dependents. One study suggests that it is helpful to women who are married and have school

28 WORK AND FAMILY: POLICIES FOR A CHANGING WORK FORCE TABLE 6-5 Benefits and Work Schedule Policies Aiding Child Care, 1987 (percentage) Establishments with 10 or More Employees Type of Benefit 10-4950-249 250+ or Policy TotalEmployeesEmployees Employees Child care benefits or services 11.19.015.3 31.8 Employer-sponsored day care 2.11.92.2 5.2 Assistance with child care expenses 3.12.44.7 8.9 Child care information and referral services 5.14.36.3 14.0 Counseling services 5.13.87.6 17.1 Other child care benefits 1.0.71.6 2.9 Work-schedule policies aiding child care 61.262.058.1 59.4 Flextime 43.245.137.7 34.9 Voluntary part-time work 34.836.032.0 25.1 Job sharing 15.516.013.7 15.7 Work at home 8.39.25.6 3.8 Flexible leave 42.943.839.9 40.2 Other leave or work schedule policies 2.11.92.9 3.1 None 36.836.738.1 32.5 Total establishments (thousands) 1,202919236 47 SOURCE: Bureau of Labor Statistics (1988a:Table 1). age children (Presser, 1989), but other evidence indicates that it is of lim- ited help. Flextime cannot solve the problem of those who simply do not have enough time for all their responsibilities (Christensen and Staines, 1990~. Also, it is often difficult to find child care for nonstandard hours, such as the long hours of compressed work weeks normally 10 hours for 4 days (Axel, 1985; Presser, 1989; Hayes et al., 1990~. Thus it is perhaps not surprising that analyses of the May 1985 Current Population Survey found little difference in the use of flextime between men and women or parents and nonparents (Presser, 1989~. Alternative Locations Alternative locations, or flexplace, includes traditional home-based work as well as newer arrangements, such as satellite offices and remote or

NEW FAMILY-RELATED BENEFITS 129 neighborhood centers. There is very little information available on remote centers, however, and home-based work remains the most prevalent alterna- tive location in the United States. Employees doing clerical and high-level professional work are often linked electronically through computers an innovation called telecommuting. Like part-time work, home-based work has a long history. It was quite prevalent and controversial, for instance, in the garment industry at the turn of the century. Although it is much less common today, it is still controver- sial. For some it offers flexibility, but for others it has been a source of exploitation. A U.S. Department of Labor regulation prohibiting home- based work in selected garment industries in the 1940s was only recently lifted, and it is still the subject of litigation. New possibilities opened up by computer technology are largely responsible for recently revived interest, and modest growth seems likely (Christensen, 1989; Boris and Daniels, 1989; Bailyn, 1988, 1989~. About half of today's 18 million home-based workers are self-employed, including the two largest categories, farmers and family day care providers. The remainder are employed by the relatively few companies that offer structured home-based programs. In general, advantages for workers in the latter group include greater control over time, savings in time and money by not commuting, and gaining some flexibility for meeting household de- mands, though many still have to make child care arrangements, and others work late at night (Christensen, 1988~. However, the situation is very dif- ferent for low-level clerical employees and operatives, on one hand, and high-level professionals, on the other (Axel, 1985; Christensen, 1988; Hor- vath, 1986~. Home-based operatives are typically immigrant women (sometimes ille- gal), often Hispanic and Chinese, with few skills, who earn little and re- ceive no benefits. There is evidence of employers requiring long hours and paying low wages in violation of wage and hour laws, just as was true for other immigrants in the early part of this century (Boris and Daniels, 1989~. However, Fernandez-Kelley and Garcia (1989) caution about generalizing for all minority groups. They found that, for Cuban women, home-based work was often a strategy for reaching a modest standard of living and reconciling conflicts between economic coals such as earning money and - ~7 , ~. ~` , . cultural norms against women working away from home. For Mexican wo- men, it tended to be a last resort to stay barely a step above poverty, perhaps the only alternative to unemployment. In general, unions have been strongly opposed to home-based industrial work for operatives and have fought to keep the ban on home-based work in order to improve working conditions. This is understandable, in view of a history of long hours, low wages, poor working conditions, and the use of child labor. Unions have also been concerned with the difficulty of

130 WORK AND FAMILY: POLICIES FOR A CHANGING WORK FORCE organizing home-based workers. The recent evolution of home-based cleri- cal work utilizing electronic networks raises some of the same concerns for unions. Nonetheless, the American Federation of State, County, and Municipal Employees (AFSCME) and the University of Wisconsin recent- ly negotiated a successful home-based work project (duRivage and Jacobs, 1989~. Clerical employees of the University of Wisconsin Hospital work at home, saving the hospital costly new space, and receive the same base pay, benefits, and promotion opportunities as other workers. Both the union and the employer are involved in monitoring the situation, and the union stays in touch with workers through electronic mail and weekly meetings. High-level professionals have a far more favorable situation (Bailyn, 1988, 1989; Olsen and Primps, 1984~. Working at home appears to be of most benefit to higher-income women who can afford to trade income for flexibility. Even so, the impact on these employees of totally meshing home and work life is yet to be seen. It could lead to a new type of workaholic (Foegen, 1984), as well as isolation, lack of career advance- ment opportunity, and reduced job satisfaction. Some of these managerial and professional women, like many production and service workers, take these jobs whatever the limitations, because the advantages of being able to work at all outweigh the disadvantages of this kind of work (Bailyn, 1989; Olsen, 19851. Employers benefit by reduced overhead expenses for space, utilities, and parking. There is also evidence that employees who work through telecom- muting may be more productive than their counterparts who work in a central location. However, problems of quality control and difficulties for managers who need to communicate with employees remain. Unless new solutions can be found to resolve some of these drawbacks, further expan- sion of home-based work is likely to be limited (Bailyn, 1989; Silver, 1989~. Therefore, predictions of dramatic increases in flexplace arrangements (Ambry, 1988; McGee, 1988) seem unwarranted. Legal Constraints In addition to union and employer resistance to more flexible working arrangements, there is a complex set of federal, state, and local laws that have institutionalized the 35- to 40-hour week and the 7- to 8-hour day as full-time work, with important implications for benefit requirements and overtime payments. For example, the Fair Labor Standards Act (FLSA) imposes a requirement that, except for executives and administrators, over- time be paid to most employees working more than 40 hours during a week and to many employees working more than 8 hours a day. The Walsh- Healy Act has a similar provision for employees working on government contracts of more than $10,000. For government employees, however,

NEW FAMILY-RELATED BENEFITS 131 flex-time and compressed work weeks can be introduced without triggering over-time premiums. Home-based work is also affected by federal, state, and local laws and regulations such as those governing equal employment opportunity, occupational safety and health, workers' compensation statutes, and child labor laws (Elisburg, 1985~. While the simplest forms of flexible schedules pose few problems, great- er flexibility makes legal implications more likely. Like the home-based work ban, these laws were originally instituted to protect workers from excessive hours of work, to provide adequate compensation, and to increase the pool of available jobs. These concerns persist and proposed changes will have to address them, requiring cooperation between management, unions, and government at all levels (Staines, 1989~. Family Support Services Thus far, we have reviewed programs that enable employees to spend more time or more convenient time with infants, children, and other depen- dent family members. We now focus on programs that help employees who need to make arrangements for the care of family members while they work. Such arrangements include on-site centers, subsidies for other organi- zations to provide needed services, vouchers for employees, and the provi- sion of information through referral services, seminars, and supportive coun- seling. Several unions have recently become active in this area, especially those with large female memberships. Most of the programs are directed toward child care; far less is being done to help with care for elderly or disabled family members. Dependent Care Child care centers at or near the workplace are not new. Some work-site centers were established as early as the Civil War. During World War II, 2,500 centers, often subsidized by the government, were available in war industries; the centers were dismantled after the war, despite the resistance of many working women (Auerbach, 1988~. Interest in employer-sponsored child care reemerged in the 1960s. Between 1964 and 1972, approximately 18 corporate and 70 hospital-based centers opened. In the early 1970s the Amalgamated Clothing and Textile Workers Union negotiated for one of the first centers established through collective bargaining (Friedman, 1985; Kamerman and Kahn, 1987~. In 1989 the Conference Board's Work and Family Information Center identified over 1,000 on- or near-site centers (Table 6-6~. One of the few programs serving a broader clientele, the Stride Rite Intergenerational Center, which opened in 1990, will eventually pro- vide care for 55 children and 24 elderly persons. In general, on-site

132 WORK AND FAMILY: POLICIES FOR A CHANGING WORK FORCE programs tend to be of high quality, often serving as a showcase for sponsoring employers and unions. While the numbers are growing, the capacity of on-site care is very small relative to need. An estimated 11 percent of establishments with 10 or more employees report providing any child care benefits or services. A mere 2 percent report sponsoring child care programs, and half of those are child care centers. Even for establishments with more than 250 employees, the figure is only 5.2 percent (Bureau of Labor Statistics, 1988a). Large firms, governments, and service establishments (especially hospitals) are most likely to have centers. The Conference Board reports even smaller numbers of employers providing services (Table 6-6~. The bureau num- bers are higher, in part because local branches of large employers are counted as separate establishments, while the Conference Board would report only one employer. Also, unlike the Conference Board, the Bureau of Labor Statistics includes nonprofit organizations such as child care centers. At present, some government agencies and public-sector unions in par- ticular are expanding or considering expansion of on-site child care (Cook, 19891. The Internal Revenue Service has announced plans to open 10 new centers, and other agencies are undertaking feasibility studies. In New York, the state and four public-sector unions have initiated the Empire State Child Care system, with 30 centers for more than 2,000 children. An experimen- tal 24-hour center is planned. The parents pay a fee and, after start-up, the centers are expected to cover all operating costs except for space, utilities, and maintenance. TABLE 6-6 Employer-Provided Child Care Services Type of Service Number On- or near-site child care center Hospitals Corporations Government Family day care, school-age child care, sick child care Referral services Discounts, vouchers Flexible benefits Total 1,077 777 200 100 50 ,000 so 2,00 4,177 SOURCE: Friedman and Gray (1989:Table 1); data from the Conference Board. Reprinted by permission.

NEW FAMILY-RELATED BENEFITS 133 There are several ways that on-site child care programs can be initiated and operated. One way is for employers to own, operate, and perhaps par- tially subsidize a center. The Bureau of Labor Statistics estimates that, of those establishments that provide centers, 20 percent are free to employees, 40 percent require employees to pay part of the costs, and 40 percent re- quire the full cost to be paid by employees (Bureau of Labor Statistics, 1988, unpublished data). Alternatively, employers contract with an inde- pendent operator, provide funds to employees or to labor unions, or hire a local agency to recruit, train, and license family day care providers. An approach seen as particularly helpful for small businesses is a consortium of geographically close employers who provide seed money for a facility, perhaps underwrite operating costs, or provide a partial subsidy for tuition. Some employers also make provisions for more specialized needs. One of these is care for sick children, which requires establishing infirmaries sick rooms in existing centers, or subsidization for in-home nursing ser- vices. Another is before- and after-school care, often run in collaboration with school districts or community agencies. A third is some arrangement for children during the summer, perhaps a camp, as well as care arrange- ments for holidays, snow days, and other times when schools but not workplaces are closed. There are also a few experiments providing tele- phone contact arrangements for children who need assistance when they get home from school (Friedman and Gray, 1989~. Two airports are estab- lishing 24-hour centers because of the nonstandard hours of their employees (Presser, 19891. The Conference Board reports that it was able to locate only 50 employ- ers that provide voucher or discount programs for nonemployer- based care of dependents among the medium- and large-sized firms it sur- veyed (see Table 6-6~. In voucher programs, employers subsidize either directly or by adding the money to employees' paychecks whatever child care or elder care program an employee chooses. Some employers, for example Polaroid and the Ford Foundation, limit this benefit to lower- income employees (Friedman, 1985~. In a discount program, employers negotiate with a specific provider for a reduced fee (usually 10 percent) and guarantee a certain number of places for the children of their employees. Several national for-profit child care franchises offer discount programs (Friedman, 1985~. Because the providers often are large, expensive, for- profit chains, it is mainly higher-paid employees who can afford to take advantage of the benefit. Although there is no comprehensive study of employer motivation for providing child care, a wide variety of sources provide some information. Surveys suggest that the primary reason for employers to offer child care support is to address problems of recruitment, morale, absenteeism, and turnover, as well as public relations. In general, expense, lack of evidence

134 WORK AND FAMILY: POLICIES FOR A CHANGING WORK FORCE of positive effects, liability issues, concern about paternalism, and reluc- tance to interfere with employees' personal lives appear to constitute barri- ers to expansion of such programs. For example, in a survey of over 1,500 human resource professionals conducted by the American Society for Per- sonnel Administrators (1988), expense (77 percent) and insurance liability issues (76 percent) were the most frequently mentioned obstacles to their firms' involvement in child care. Large companies (500 or more) were the most concerned with liability (81 percent). There are also questions about utilization. Friedman (1985) estimates that less than 5 percent of workers may have children in need of care arrangements, and some of those may prefer other alternatives. Several centers for example, two opened by AT&T in the 1970s closed because they were underutilized (Kamerman and Kahn, 1987~. For the present, the only employers with extensive involvement in child care are those who need to attract women with young children into the labor force and whose employees work during hours when other child care is not readily available. This is particularly true of hospitals, but to some extent also of other service industries. To the extent that projected work force shortages materialize, an increasing number of employers may be- come involved in child care arrangements. Resource and Referral Services The number of employers providing resource and referral services for child care and elder care is also small but is growing rapidly. Such services not only help employees locate care, but they also are believed to increase the supply of care available in the community. In addition, they help people to evaluate the quality of available programs and to select those that meet the differing economic circumstances and cultural goals of individual em- ployees. The Bureau of Labor Statistics reports that about 5 percent of establishments offer such services (see Table 6-5~. More than 1,000 com- panies report providing them for child care and 200 for elder care (Fried- manandGray,1989~. In general, it is far more efficient for employers to help employees find adequate services than for workers to do so on their own. Most individuals do not have the information needed and lack time to acquire it (Grubb, 1988~. Employers can establish their own staff or contract with a commu- nity resource and referral program. At times, these programs are also di- rectly involved in encouraging new providers to enter the field by sub- sidizing training and support programs. One example is the California Child Care Initiative, started by Bank of America: 23 employers and foundations and 10 government agencies joined to create a pool of over $3 million for child care, resulting in over 1,600 additional licensed family day care

NEW FAMILY-RELATED BENEFITS 135 homes (Friedman, 1989a). IBM contracted with Work/Family Directions to provide a nationwide network of referral services to help with both child care and elder care. About 35 other companies now use that service, which directly and indirectly helped to start 45,000 new child care programs (Fried- man and Gray, 1989~. A similar initiative was part of the recent AT&T collective bargaining agreement. As with operating centers, employers must also be concerned with liabil- ity issues when they recommend other centers. Efforts to minimize the risk include careful selection of the vendor, offering referrals rather than recom- mendations, explaining that responsibility for the choice lies with parents, and including disclaimers when appropriate. Quality ratings by voluntary organizations, with small user fees, might help address this problem, but an employer's role in such programs and the potential liability involved . . In t fear use remain a concern. Counseling Some employers provide counseling and related services for child care and elder care, often through Employee Assistance Programs (EAPs), which are a development from alcoholism programs. Such programs are intended to relieve worker stress. The expanded role for EAPs began in the early 1970s when the National Institute on Alcohol Abuse and Alcoholism launched a large-scale initiative to promote employer policies to deal with alcoholic employees. The broader model was developed on the assump- tions that (1) employers would more readily adopt programs designed to deal broadly with "troubled employees"; (2) supervisors should not be placed in a position in which they are encouraged to diagnose the problem of a particular worker; and (3) such programs would be more readily supported by workers if they offered access for self-referral of all troubled employees rather than requiring supervisor involvement (Roman, 1988~. Two unanticipated results occurred. First, EAPs have been adopted by employers at a very rapid rate: according to national survey data, more than a third of the U.S. work force in the private sector now has access to EAPs (Bureau of Labor Statistics, 1989b). Second, EAPs have come to devote a considerable proportion of their resources to family issues. A 1984 study of 439 EAPs in private-sector organizations in six states indicated that family- related problems, mainly revolving around marital conflict and often re- lated to work-family issues, constituted about half the typical EAP caseload (Blum and Roman, 1989~. A growing number of EAPs are becoming pro- active in providing assistance with child care and elder care and in cases of domestic violence (Bureau of National Affairs, 1988b; Googins, 19884. In addition, assistance rendered for employee alcohol and drug problems also has substantial impact on family members.

136 WORK AND FAMILY: POLICIES FOR A CHANGING WORK FORCE Other Family-Oriented Policies Employers are also addressing other family issues, such as relocation and antinepotism rules. Traditionally, relocation policies, if they existed at all, were concerned mainly with managerial and professional employees and tended only to provide assistance with the sale and purchase of homes, moving expenses, etc. Today, they are more likely to include financial incentives, help with schools for children, and counseling and job place- ment services for spouses, although it has been reported that these programs are often inadequate (Friedman and Gray, 1989~. Many large companies have policies imposing some constraints on hiring members of the same family, particularly in management ranks, be- cause of concern with problems of bias, family fights, and morale. In an American Society of Personnel Administrators survey, 60 percent of 252 responding companies were found to have some such restrictions. But ad- justments in these policies are now being made and, increasingly, more couples work for the same organization (Burden and Googins, 1987; DuPont Co., 1989~. Universities, where such rules were once pervasive, have virtu- ally abolished them. Flexible Benefit Programs A small number of employers have developed flexible benefit packages, usually referred to as cafeteria plans. These cafeteria plans offer employees a degree of freedom in selecting the benefits most useful for their particu- lar situation. Such plans may also reduce benefit costs. In a typical cafete- ria plan, the employer provides a set of core benefits (usually including health insurance, life insurance, disability income benefits, vacations, and retirement plans), and the employees choose either additional coverage in some of the basic benefits (often needed by one-earner couples' or other benefits. These may include child or elder care (more likely to be important for two-earner couples and single-adult families), dental care, or legal ser- vices. In some plans, employees choose from several packages of benefits, all with the same total value. As is true of benefits generally, the cost may be borne entirely by employers, employees may be required to contribute, or employees may merely be offered the opportunity to participate through a group plan (Employee Benefit Research Institute, 1987; Saltford and Heck, 1989~. Approximately 9 percent of employees in large- and medium-sized firms have access to flexible benefit programs, a proportion that grew slowly over the past decade (see Table 6-31. While reducing costs is often given by employers as an important reason for turning to cafeteria plans, the evidence on savings is far from conclu- sive. For example, experience under the Federal Employees Health Insur

NEW FAMILY-RELATED BENEFITS 137 ance System, which annually offers a choice among health insurance plans, has shown that employees tend to shift into plans that provide benefits they expect to use in the coming year. Over time, this undercuts the actuarial base of the benefit plan and drives up costs. Estimating costs and benefits is difficult because of the diversity of plans. One difficulty is that some have higher administrative costs, which may be appreciable for smaller firms (Wyatt Company, 1988~. Case studies have produced mixed evidence about the use of flexible benefits by employees (Meisenheimer and Wiatrowski, 1989~. In one bank, 94 percent of employees made some change following the introduction of a plan. Employee satisfaction in this instance rose from 39 percent before the plan was introduced to 87 percent 2 years later. In one service organ- ization, however, 88 percent of employees selected a package very similar to what they already had. In any case, the plans do increase employee choice and are likely to be especially helpful to dual-earner families by alleviating the problem of duplicate benefits. The most recent addition to flexible benefit plans is the Dependent Care Assistance Plan (DCAP). Under the Economic Recovery Act of 1981, DCAPs make it possible for employees to receive up to $5,000 of untaxed income to cover costs of dependent care. Such a plan can be provided as part of a comprehensive cafeteria benefit plan, or it can be a free-standing Flexible Spending Account (FSA) added to a traditional benefit plan. Em- ployers rarely contribute to the costs of DCAPs and have only modest administrative expenses. They may even save money, because they are not required to pay unemployment insurance and Social Security taxes on the portion of the salary that is tax-exempt. Like all special provisions to exempt income from taxation, FSAs and DCAPs reduce revenues and are of greater benefit to families with high incomes. For example, a $5,000 DCAP is worth about $750 to a family in the 15 percent tax bracket and $1,400 to a family in the 28 percent bracket (Robins, 1988~. There are some restrictions on DCAPs and other FSA plans. Employees must specify anticipated expenditures at the beginning of the year and forfeit any portion not spent. In order to use the funds for child care, the children must be 13 or younger, the care provider may not be anyone the employee takes as a personal tax exemption, and documentation is re- quired. To be applicable for the care of elderly or handicapped family members, the relative must be in the employee's home for 8 hours a day and the employee must provide more than 50 percent of the relative's finan- cial support. A survey of over 2,000 employers found that 19 percent offered some form of cafeteria plan (Wyatt Company, 1988), and almost 75 percent of those offered a reimbursement account (DCAP'. Both cafeteria plans and the dependent care option tend to be available in larger firms and in those

138 WORK ED FAMILY: POLICIES FOR A CHANGING WORK FORCE with relatively more female employees (Bureau of Labor Statistics, 1987; Wyatt Company, 1988~. They are also more likely to be offered to profes- sional, administrative, technical, and clerical employees than to production workers (see Table 6-3~. FSAs are also becoming popular with employers and are expected to grow rapidly (Besharov and Tramontozzi, 19881. While more firms are offering the plans, employees are only beginning to use them. Wyatt Company (1988) found that only 7 percent of eligible employees used DCAPs, and the Conference Board found a range of utili- zation rates for these programs from 2 percent of Mellon Bank employees to 9 percent of employees at Chemical Bank (Friedman, 1985~. The utiliza- tion rates are much higher, however (e.g., 25 percent in one company), when measured as a percentage of employees with children. EMPLOYERS WlIO PROVIDE BENEFITS Large national surveys provide data both on employers who offer family- oriented benefit programs and on employees who are eligible to receive them. Case studies provide further insights into the incentives for and bar- riers to undertaking these programs, and there is some information on the success of these programs in meeting employer goals. All these data have limitations, however, and little sophisticated analysis has been done so far. For example, establishments are not the best unit of analysis, and there is little information on the adequacy of coverage or the utilization of available programs. Still, a general picture emerges. The employer characteristics that appear to be most closely related to the provision of family-oriented programs are size, type of industry, the propor- tion of women employees, unionization, and corporate culture. The charac- teristics are often interrelated. Employer Size Definitions of the size of firms vary somewhat. As previously noted, the Bureau of Labor Statistics defines medium- and large-sized firms as those with at least 50 to 250 employees, depending on the industry. But some researchers define as small those with less than 100 employees (Swain, 1988), while employer surveys tend to categorize firms with 500 to 1,000 employees as medium, and very large firms as those with more than 5,000 employees (Wyatt Company, 1988~. However size is defined, the evidence suggests that larger firms are more likely than smaller ones to provide some family-oriented programs: certain types of leave, formal flextime, depen- dent care support services, and flexible benefit plans (Bureau of Labor Statistics, 1989a; Trzcinski, 1989; Axel, 1985; Friedman, 1989b; Kamerman and Kahn, 1987; Wyatt Company, 1988~.

NEW FAMILY-RELATED BENEFITS 139 This difference can in part be attributed to the fact that large firms offer more benefits in general and can negotiate more advantageous terms in adding additional services. Some programs, such as flexible ben- efit plans, require additional administrative procedures, which are more easily handled by large firms. Small firms also have special problems with some programs, such as parental leave and, as discussed in Chapter 5, must pay a far higher per capita cost for some benefits such as health insur- ance. At the same time, small firms may in some cases find it easier to provide flexibility (Kamerman and Kahn, 1987~. These issues are vitally important because the number of small firms is growing and they employ a substantial part of the work force. In 1988 approximately 38 percent of nonfarm wage and salary workers in the pri- vate sector, and 45 percent of women, worked for firms with fewer than 100 employees (Piacentini, 1990~. Less than 11 percent of today's employees work for Fortune 500 companies, so often highlighted for their innovative work and family programs (Kanter, 1989~. Unless ways can be found for small firms to provide family-oriented benefits without placing an unmanageable burden on them, such benefits will not be available. Industry and Occupation The availability of family-oriented programs also varies by sector and by industry. Public-sector employers, for instance, have focused to a greater extent on on-site child care centers, subsidies for other child care services, and unpaid maternity and paternity leaves (Cook, 1989~. Private industry offers more time and schedule alternatives, dependent care assistance plans, and flexible spending accounts. Within the private sector, service indus- tries, particularly finance, insurance, and health care establishments, tend to provide more nonstandard hours and family-oriented programs than goods-producing industries; retail businesses in particular frequently offer part-time work (Bureau of Labor Statistics, 1988a). As documented in this chapter and in Chapter 5, occupation is a factor as well: managers and professionals are likely to have better benefits in general than clerical, blue-collar, and service workers. Women Employees As noted previously, family-supportive policies are most likely to be available in sectors with a large proportion of women employees and where there is a shortage of skilled employees, such as health care, utilities, and finance. However, in female-dominated industries not facing recruitment problems, such as retail trade, firms offer few such benefits.

140 WORK AND FAMILY: POLICIES FOR A CHANGING WORK FORCE Unionization A number of researchers have concluded that unions in the private sector have not been particularly concerned with work and family issues, because unionized firms do not generally have more family-oriented pro- grams than nonunionized firms (Friedman and Gray, 1989; Axel, 1985; Auerbach, 19881. Others report that unionization is positively related to the availability of pregnancy disability and various parental leave poli- cies (Trzcinski, 1989), as well as standard benefits (Freeman and Medoff, 1984~. Kamerman and Kahn (1987) found that unionization increased benefits even among the smallest firms. In any case, other factors must be taken into account. For instance, nonunion employees are concentrated in growth industries. Also, union efforts often have focused on federal legisla- tion as a way to resolve these issues, rather than on bargaining. It must be noted, however, that more family-related benefits were negotiated in 1989 than ever before. New or improved plans addressing family care, for ex- ample, were adopted in the auto, steel, and telephone communication indus- tries (Ruben, 1989~. Public-sector unions, particularly those in state and local governments, have been in the forefront of negotiating innovative programs, such as the Empire State Child Care system discussed earlier. Even unions with a predominantly male membership, such as the United Mine Workers, are beginning to press for such programs (Scott, 1987~. A range of collective bargaining initiatives is shown in Table 6-7. As discussed earlier, unions have generally been opposed to part-time work, home-based work, and flexible schedules in large part because they are concerned about the potential of such options for the exploitation of workers. At the same time, it is increasingly recognized that such pro- grams offer some advantages to employees, and some unions are reconsid- ering their positions (Cook, 1989~. Workplace Culture While not readily measured, the set of norms, values, and informal mech- anisms that shape day-to-day life in an organization are likely to be im- portant in determining both the availability and the use of benefits. The tone is most often set by the top officials and tends to permeate the entire workplace. On one hand, workplace culture that rewards innovation and change is likely to encourage trying new family policies; on the other hand, even adoption of family-supportive policies may be ineffective when a negative informal culture keeps employees from using the pro- grams. For example, on the basis of several small studies, Fleck (1989) reports that an unsympathetic attitude on the part of managers and cowork- ers tends to keep men from using family leaves even when they are avail

141 A: . _ Cal - ;^ C), ~Cq .= ~ o ° A 30 ;^ 0, Ct Lo V ~ V _ , V) V o ._ Cal a' > .~ Cal ._ ._ ._4 ._ Cal 50 Cal - ._ 1 o 3 a: Cal a) Ct ~L) Ct At: v Ct 3 O Cal ~ Ct PA Cal V - I: V V ~,=0 rat rat ~X rat rat X X X X X ~ X X X ~ V V, - , ~O to ^ ~O ~ _ .,,, o =_ o O ~ 3 c' 3 ~ s ,< _ D II) U O ~ e 0 0 ~ ~ ~ Z -> e ° < _ ~ C C ~ ° -- ~ ~z v ~ v ~ o -

142 s _, s 1 . ° Cal o ; LO ~ C) Cal o X o - ~ ~ o ~ C) ~ V it, .o ~ ~ a V 1 Ct O ~X =^ U~ ~D O ;s>< In< C Cal ~X ~.- -0 c~ ~D VV Q,-s ,VX 3 A' ~V o _ ~ ~ 3 - ~ ° ·- 5 ~ ~ ~ ~ ~ 3 ~ ~ ~ ~ i - ·- ·= V ad,= ~ ~ ~ ~ ~ ~ ~ ¢ _^ ¢ o V ~ ~ ~ o

NEW FAMILY-RELATED BENEFITS 143 able and that men are more inclined to take leave when a child is born if it is not called paternity leave. There is a small group of innovative firms and unions, unrelated to size, industry, or sex composition of the work force, that appear to have a sup- portive culture (Kahn and Kamerman, 1987; Berkeley Planning Associates, 1988; Axel, 1985~. These establishments range from large, profitable chem- ical companies, with a predominantly male work force, to small, marginal firms in the garment industry, with a predominantly female work force. A key element in creating and sustaining a supportive culture appears to be an innovative leader, either a high-ranking officer in the business, most likely the chief executive officer, or a union president. Lack of top management commitment was a barrier to family-related programs men- tioned by half the respondents in the survey by the American Society for Personnel Administrators (1988~. Having a tradition of supportive atti- tudes, frequently tied to the philosophy of a company's founder or location of the establishment in a progressive community, also has an influence (Berkeley Planning Associates, 1988; Axel, 1985~. So far, the effect of the policies of one firm on others has not been investigated, but there is evi- dence that, as in the case of technological progress, others often follow once the ice is broken (Kanter, 1989~. Business Conditions As discussed in Chapter 5, the provision of voluntary benefits is strongly influenced by the general economic climate and by federal and state tax policies. Firms facing strong competition or experiencing financial prob- lems have incentives to reduce compensation costs. Predictably, these companies are least likely to expand benefits and may attempt to reduce previously offered ones (Auerbach, 1988; Axel, 1985), unless they can bring about offsetting gains. Large and small firms with increasing profits and rapid growth tend to offer more generous benefits (Swain, 19881. Although new types of employee benefit programs may offer some ad- vantage to the community for example, increasing the supply of child care, reducing traffic congestion, or just being "good for families" few employers introduce them solely out of a sense of social responsibility. Employers are likely to provide voluntary benefits, standard or innovative, because they are expected to be profitable. Recruitment is generally the primary reason given. Longer-term interests may include the firms' reputa- tion for good citizenship in the community and judgments about employee morale and performance. As discussed in Chapter 5, a number of businesses have recently re- duced rather than increased health insurance benefits because of the rapid escalation in insurance premiums. In the aggregate, voluntary benefits

44 WORK AND FAMILY: POLICIES FOR A CHANGING WORK FORCE have not expanded significantly since the 1970s. In an analysis based on U.S. Income and Product Accounts data, Woodbury (1989) found that vol- untary benefits grew rapidly between 1968 and 1975 at an annual rate of 5.9 percent. However, the rate of growth fell to 3.1 percent in the late 1970s and actually declined at an annual rate of 1.2 percent between 1980 and 1985. Some firms have devised innovative types of benefits and expanded the total nonwage package they offer to employees. This does not reflect the general national picture, and in the near term it appears unlikely that these new types of benefits will be widely adopted. Two major initiatives deserve attention. In 1988 IBM announced an extension of its unpaid personal leave of absence to 3 years (IBM, 1988a, 1988b). This leave may be taken for any number of personal reasons but was designed to be particularly helpful in meeting family needs. In addi- tion, the IBM sickness and accident program provides 6 to 8 weeks of paid leave for childbirth. In 1989, AT&T, the Communication Workers of America, and the International Brotherhood of Electrical Workers an- nounced a ground-breaking collective bargaining agreement that extends the newborn child leave for mother or father from 6 months to a year and creates a similar leave program for employees who need time off to care for seriously ill family members. The leave is unpaid, but premiums for health care benefits are paid by the employer for the first 6 months and by the employee for the rest of the time; the company also pays the premium on basic group life insurance for the entire leave (Bureau of National Affairs, 1989~. Recruitment is the primary reason given by employers for offering both standard and new types of benefits. Benefits are particularly important in tight labor markets and in industries competing for highly skilled employ- ees. In one study of 204 employers, more of them ranked attracting talented employees first or second among five reasons for providing child care than any other (Magic, 19831. Retaining valued employees is also a consider . . a. . . atlon In benetlt decisions. Costs and administrative complications are the most frequently cited reasons for not offering benefits (Magic, 1983; Burud et al., 1984; Axel, 1985; Auerbach, 1988; Kamerman and Kahn, 1987~. In a survey of over 2,000 employers, for example, complexities of administration (37 percent) and higher costs (22 percent) were the most often identified reasons for not adopting flexible benefit plans (Wyatt Company, 1988~. Equity con- cerns were also mentioned when benefits are limited to one group. This suggests that a general leave policy might be more acceptable than parental leave, for example. Business organizations (e.g., the U.S. Chamber of Commerce, 1987) and government agencies (e.g., the General Accounting Office, 1987a, 1989) have attempted to estimate the costs of selected new programs, but efforts

NEW FAMILY-RELATED BENEFITS 145 to estimate the benefits have been left almost entirely to private research- ers. So far, the results of both efforts have been quite limited. Child care and flextime have received the most attention. A small num- ber of studies that investigated the effects of employer-provided child care (e.g., Milkovich and Gomez, 1976; Youngblood and Chambers-Cook, 1984; Ransom and Burud, 1986J found that absenteeism and turnover were lower among parents who used centers than those who did not. Ransom and Burud (1986) also reported a significant effect on job performance, but Krug et al. (1972) and Miller (1984) observed no significant differences between the two groups based on management ratings of workers. Fried- man (1989b) reviewed 17 studies of employer-supported child care and concluded that it is almost impossible to prove any direct effect of employer-provided child care on productivity but found some positive effects on related factors. For flextime, a preponderance of the evidence points toward improved job performance, but some studies find no effects. In a survey of the early literature, Nollen (1979) reports that improvement in various productivity- related behaviors ranged from 0 to 45 percent. In later studies, Harrick et al. (1986) found that workers on flextime used less leave and reported increased satisfaction with their schedules. However, the only study that controlled for workers' demographic characteristics found no effect of true flextime on absenteeism (McGuire and Liro, 1987~. It is interesting to note, however, that reports by managers in German and Swedish firms, where they have had years of experience with family-oriented benefits, tend to be more consistently positive than the research results mentioned above (Galinsky, 1989a). NEW GOVERNMENT PROGRAMS Government policies are important not only for what they accomplish directly, but also for their symbolic effect, which influences the general climate in the country. Efforts of federal and state governments to establish and promote programs to help families in general, and families in which all the adults are in the labor force in particular, are therefore noteworthy. Since the 1940s, federal and most state tax policies have subsidized fami- lies, especially traditional families. This has been accomplished by pro- viding some tax relief to employed persons for each dependent, including full-time homemakers, through personal income tax exemptions and by permitting income splitting. Aid to Families with Dependent Children (AFDC), the main form of public support for the poor, in earlier years enabled poor women with very young children to stay home. More re- cently, new tax policies such as the earned income tax credit encourage poor heads of households to work.

146 WORK AND FAMILY: POLICIES FOR A CHANGING WORK FORCE Tax Credits and Incentives Federal tax policy recognizes dependent care as a necessary expense of employment and permits a proportion of the costs of purchased care to be deducted from personal income taxes under the Dependent Care Credit (DCC): 30 percent of actual expenses up to $2,400 for one child and $4,800 for two or more children up to maximum credits of $720 and $1,440, re- spectively. The remaining costs are borne by workers. Use of the DCC increased dramatically along with mothers' employment: from 2.7 million people in 1976 to 8.4 million in 1985. Although no estimates are available of the tax losses of states, losses of the federal government were estimated at $4 billion per year (Besharov and Tramontozzi, 1988~. However, to the extent that additional people are in the labor force because of these credits, tax collections will also be larger. There has been a general policy thrust in the 1980s toward putting more money into the hands of individuals so that they can make their own deci- sions on how to spend it. Therefore, tax deduction and credit policies are more prevalent, and fewer tax dollars are put into the direct purchase of services. For example, the amount of federal dollars for child care in- creased from $1 billion in fiscal 1972 to almost $7 billion in 1987, virtually all of it in tax credits (Besharov and Tramontozzi, 1988; Robins, 1988~. Neither the federal tax exemption nor the credit are refundable; thus, they benefit moderate and higher-income workers, but provide no support to the working poor, who do not have an income tax liability (Marr, 1988; Robins, 19881. Only 3 percent of the dependent care tax credit goes to families in the bottom 30 percent of the income distribution. If the credit were refundable to those who work but do not earn enough to pay income taxes, the share going to the bottom 30 percent would increase to 17 percent (Barnes and Giannarelli, 1988~. Employer-Based Tax Incentives Several initiatives have also been undertaken to encourage more em- ployer involvement in the provision of services, particularly those related to child care. One was an educational campaign. Between 1983 and 1985 the White House sponsored 33 breakfasts for corporate chief executive officers to educate them about child care (Freidman and Gray, 1989~. Another was tax incentives for employers. By establishing Dependent Care Assistance Plans (discussed above), employers can shield up to $5,000 of employees' income from taxation. Conservative estimates put the loss of tax dollars for DCAPs at $40 million in fiscal 1987 and $65 million in 1988; a rise to $150 million for 1989 was estimated because of the expanding use of tax credits (Besharov and Tramontozzi, 19881.

NEW FAMILY-RELATED BENEFITS 147 Employers can also take tax deductions for child care expenses, such as on-site child care centers, voucher programs, and resource and referral pro- grams. They can make contributions to qualified tax-exempt child care centers, information and referral agencies, and similar organizations and deduct them as charitable contributions. Finally, under Internal Revenue Code Section 502(C)~9), there are tax benefits for money given to child care centers in which employees' children are served and employees have financial responsibility for the program. Munnell (1989) estimated the pre- sent revenue loss from income and payroll taxes because of employer- provided child care at $0.3 billion in 1989; she expects it to rise to $1.4 billion in 1993. A number of states also offer tax incentives for employers, but the amount is relatively small. Although helpful, such credits do not appear to play a major role in employers' decisions to provide services. Proposed Legislative Initiatives At this writing there are several modest legislative proposals to further increase tax incentives for employers to provide child care support. One calls for annual grants of $25 million (for 3 years) to assist businesses in providing child care services for employees and, when possible, the com- munity. Businesses receiving the grants would have to spend three times the amount of the grant for services; priority would be given to businesses with fewer than 100 employees (Stephen and Stewart, 1989~. There are also proposals for federal programs with universal coverage, such as child allowances, publicly available child care (similar to the pub- lic school system), and national health care, and several states are consider- ing paying family members who stay home and care for the elderly (see Linsk et al., 1988~. Fuchs (1988), for example, favors universal programs such as the child allowance programs used in Europe and Canada, which are not tied to employment or poverty status. He estimates the cost of provid- ing all families an allowance of $2,000 per child under the age of 12 at $83 billion annually. The net costs to the federal government would be consid- erably less than this, however, since the allowance would replace the cur- rent personal income tax exemption for children, as well as programs such as AFDC, the Dependent Care Credit, and the Earned Income Tax Credit. Fuchs points out that if the program were financed by a proportional tax levied on all nonpoverty households, the net effect would be to increase women's economic well-being and sharply reduce the proportion of chil- dren living in poverty. Under current budget constraints, such a proposal is not likely to be adopted. Hill and Morgan (1990) believe that what is needed is a "child security system" similar to the Social Security system, funded separately by a small income surtax on every parent for 35 years after each birth. The funds

148 WORK AND FAMILY: POLICIES FOR A CHANGING WORK FORCE would cover health care (or insurance) for all children from prenatal care through adolescence; there might also be some payments to whoever is raising the children. For intact middle-income families, this system would simply ease the money crunch when the children are young but would not reduce lifetime costs of childrearing. One-parent or low-income families would receive a subsidy. Equal Employment Opportunity and Family Leave To the extent that the federal government's equal employment opportu- nity policies are concerned with the treatment of pregnancy and childbirth, they are important for families. The Pregnancy Discrimination Act (PDA) of 1978, discussed earlier, forms the basis of the equal treatment approach, which views pregnancy-related disability the same as other disabilities. At least in part, then, because of passage of the PDA, the five states (Cali- fornia, Hawaii, New Jersey, New York, and Rhode Island) and Puerto Rico that have established state-run, short-term disability programs or mandate that private employers establish such programs do include pregnancy- and childbirth-related disabilities with their coverage. In addition, 11 states now require employers to provide leave in connection with pregnancy, childbirth, and parenting for mothers and fathers (Ross, 1990~. According to the National Association of Working Women, 21 state governments provide some parental leave for their employees. Some states, however, favor policies that treat pregnancy and childbirth differently from other disabilities, on the assumption that special treatment is required in order to afford women equal opportunity. (For a full discus- sion of the two approaches, see Williams, 1985; Trzcinski, 1989; Piccirillo, 1988; Ross, 1990.) As of 1990, 12 states required employers to provide leave only for pregnancy and childbirth and not for other disabilities. A state's right to pass such laws was upheld by the Supreme Court in 1987, and a wide variety of leave legislation has been passed since then (see Table 6-41. As a result, families face very different policies, depend- ing on where they live. Broader family leave policies and programs, including mandated leave, are being considered by the federal government. In 1990 there were five bills in Congress that included both parental leave and maternity leave (Gladstone, 1990~. A family and medical leave act recently passed by Con- gress and subsequently vetoed by the President provided unpaid leave- with a job guarantee and continued health benefits for workers who need time off to care for newborn, newly adopted, or ill children and for seri- ously ill parents or spouses unable to care for themselves, and unpaid tem- porary leave for all workers for their own illnesses, including those that are pregnancy related. Employers with fewer than 50 employees were exempt.

NEW FAMILY-RELATED BENEFITS 149 Many private groups have also made recommendations regarding paren- tal leaves. For example, the Yale Bush Center Advisory Committee on Infant Care Leave recommends a 6-month leave to care for new infants, with replacement of 75 percent of salaries up to some maximum for 3 months. Alternative financing mechanisms suggested include a federally or state-managed insurance fund modeled on the New York and New Jersey short-term disability programs and employer-selected private insurance programs such as that required by Hawaii's disability law (Zigler and Frank, 1988~. The National Research Council's Panel on Child Care Policy, while recognizing problems for small employers, nonetheless recommends up to 1 year of unpaid leave with job guarantees and health benefits, but offers no recommendations on implementation. This panel was primarily concerned with the healthy development of children and therefore dis- turbed by the lack of affordable out-of-home care of adequate quality for infants (Hayes et al., 1990~. The potential costs of implementing various family leave proposals to employers, employees, and governments vary depending on such factors as whether the leave is paid or unpaid, how expenditures are financed, and employer coverage. Costs also depend on the extent to which employees use such leaves. The General Accounting Office (GAO) (1987a, 1989) has projected the costs of mandating up to 10 weeks of unpaid leave with con- tinued health benefits for the care of new infants and for illnesses of children, parents, or the employees themselves. Assuming some restrictions on eligibility and coverage such as minimum tenure in the firm of 1 year and exemption of firms with less than 35 workers, the additional cost to employers would be approximately $300 million annually. One critical assumption in preparing estimates is how employers orga- nize work to cover an employee's absence. The General Accounting Office (1987a) examined the practices of 80 firms in two cities. They reported that overall about 30 percent of workers were replaced with little overtime or loss of output. Clerical workers were most frequently replaced, while man- agement and professional women were seldom replaced. When replace- ments were hired, the cost was similar to or less than the cost of the work- ers on leave. The GAO concluded that the only major cost was for continued health benefits for employees on leave. The U.S. Chamber of Commerce (1987) estimates the costs of the parental leave portion of similar legislation at over $2 billion, in part because it includes what employers are already paying and in part because of its high estimates of worker replacement costs. It assumes that all workers on leave take the maximum time allowed, that they are replaced, that replacement workers are somewhat less produc- tive, and that they receive wages 18 percent higher than the workers on leave. Frank (1988) estimates a range from $1.25 billion for 3 months' leave at 50 percent of wages to slightly over $5 billion for 6 months' leave

150 WORK AND FAMILY: POLICIES FOR A CHANGING WORK FORCE with full salary (1983 dollars). The U.S. Chamber of Commerce, however, estimates the costs of parental leave at full pay at $75 billion annually. Very little cost analysis is available on the short-term disability available in the five states that provide it, and there appear to be no cost estimates for instituting these programs on the national level. The cost of parental leave to employers depends very much on how the plan is structured. If the total cost of leave is borne by the individual employer, the burden could be significant, depending on whether the leave is paid or unpaid, the size of the firm, the composition of the work force, the number of employees who elect to use the leave, and the expense and difficulty of providing coverage during an employee's absence. Most of these costs can be mitigated by using broadly based insurance pools (e.g., social insurance, state disability insurance pools) and providing special exemptions for small employers. As discussed in the next chapter, Euro- pean countries have devised various leave arrangements that are extremely valuable to families and that have proved acceptable to employers. All rely on social insurance funding to spread the costs and avoid disproportionate burdens on individual employers. Critics agree that family leave is important but argue that it should be provided only on a voluntary basis (U.S. Chamber of Commerce, 1987~. In his veto message of the Family and Medical Leave Act of 1990, President Bush said, "I want to emphasize my belief that time off for a child's birth or adoption or for family illness is an important benefit for employers to offer employees. I strongly object, however, to the Federal Government mandating leave policies for America's employers and work force." Critics further argue that mandated leave would be costly for employers, no matter how it is financed, and some combination of higher prices and lower wages would result, possibly accompanied by higher unemployment and discrimination against employees who are more likely to take such leave. Policies for the Working Poor As mentioned earlier, public policy has shifted recently from AFDC to programs that encourage, or even require, participants to seek employment. Work incentive programs are based on research showing that prolonged absence from the work force significantly reduces the likelihood that an individual will reenter the labor market. Thus, for instance, the 1988 Fam- ily Assistance Act provides for support for services such as child care and requires women with children over age 3 (or, at the discretion of the state, over age 1) to take a job or participate in 20 hours of training per week. Refundable tax schemes and mandated employer health care, which are also being considered, are similarly tied to labor force participation. The minimum wage is also an important policy intended primarily to

NEW FAMILY-RELATED BENEFITS 151 help working people to earn enough to avoid poverty. It has not been suc- cessful, however, in meeting that objective, as shown by the fact that 44 percent of the heads of poor households (6 million) were in the labor force, about one-eighth of them full time, year round (Hendrickson and Sawhill, 1989~. At the same time, a large proportion of people receiving the mini- mum wage, many of them teenagers, live in households with incomes above the poverty level (Ehrenberg and Smith, 1982~. It is further argued that gains to those who receive higher wages may be more than offset by pos- sible losses for workers unable to find jobs. Hence, the minimum wage remains controversial. However, there is no consensus on the alternatives to a minimum wage in preventing poverty or on the degree to which the minimum wage should be relied on to provide an income floor for full-time employment. "The failure of work to provide an escape from poverty is inconsistent with the belief that any family that makes a reasonable effort to support itself should not be poor" (Hendrickson and Sawhill, 1989: 1~. Expansion of the earned income tax credit (EITC) is one alternative to the minimum wage. Under the recently passed Omnibus Budget Reconcili- ation Act of 1990 (P.L. 101-508), the EITC provides a credit of 23 percent of earnings up to $6,810 (up from 14 percent in prior legislation) for fami- lies with one child. For eligible families with more than one child, the credit will be 25 percent. There is an additional 5 percent credit for a child under age 1 and a 6 percent credit for taxpayers purchasing qualified health insurance for their children. The effect is to raise the earnings of people in low-income households with children generally thought to de- serve the highest priority among poor households and negative employ- ment effects are expected to be minimal (Burkhauser and Finegan, 1989~. However, the benefit is small and not sufficient to bring most eligible fami- lies above the poverty line. At the same time, the EITC is costly. In 1987, for example, 7.4 million families claimed the credit, on average $433 per family, which reduced federal tax collections by $3.3 billion (Hendrick- son and Sawhill, 1989~. It has been estimated that the reductions will amount to $18.3 billion over 5 years (1991-1995) (Stewart, 19901. Costs are also a major barrier to the introduction of general family or child allowances. Unlike the EITC, they might also reduce work incentives, although less so than welfare programs, because payments continue as earn- ings rise. Family or child allowances are standard throughout Europe and in Canada. Their universality appears to make them more popular and more acceptable politically than benefits narrowly targeted on the needy (Wilensky et al., 1985~. In addition, people are not stigmatized as welfare recipients, and administration is far simpler since proof of need is not re- quired. In the United States, however, government programs for children are

152 WORK AND FAMILY: POLICIES FOR A CHANGING WORK FORCE directed to the poor, including the new child care legislation, P.L. 101-508, which authorized $4 billion over 5 years. Under the new child care devel- opment block grant program, eligible families must have incomes less than 75 percent of the state median income. Under Title IV-A child care grants, they must need child care to enable them to take a job in order to escape poverty (Stewart, 1990~. Health insurance is a matter of particular concern to the working poor and their employers. As discussed earlier, many employers offer health insurance to their employees, and Medicaid covers some of the poor, but more than 30 million people do not have health insurance, the majority in families that include an employed person. One proposal, the Minimum Health Benefits for All Workers Act (Gordon, 1988), attempts to deal with this situation by mandating health insurance coverage by employers. All employers would be required to provide a minimum level of health insur- ance for all employees who work 17.5 or more hours per week and to include spouses and dependents unless they are covered by another employ- ment-based plan. This would reduce the number of uninsured substantially. Gordon estimates that the bill would affect 58 percent of employees work- ing in firms with less than 25 employees and 19 percent of those in larger firms. At the same time, Gordon suggests that employment might be re duced, and some full-time jobs might be recast into jobs of 17 hours a week or less, especially in low-wage industries. The additional costs for insurance premiums are estimated at $22 billion annually for employers and $3 billion for employees. A slight decrease in the costs of Medicare, Medicaid, and other government health benefit pro- grams would be expected, but so would a decline of $2.1 billion in personal income taxes and $2.6 billion in Social Security and Medicare payroll taxes, leading to a slight increase of $300 million in the federal deficit. There would also be some loss to states, because employer contributions for health benefits are tax deductible. States have enacted a wide variety of mandated health coverage laws, 645 between 1968 and 1986. If employers offer health insurance, they may be subject to requirements about services, benefits, time periods, and people covered. More recently, however, states have been developing objective criteria to measure the social and financial impact of new mandates, mind- ful of the effects many of the requirements are likely to have on costs; Washington, Arizona, Oregon, and Pennsylvania have enacted some form of impact statement (Employee Benefit Notes, June 1987~. CONCLUSIONS Employers and governments (federal, state, and local), separately and in partnership, have undertaken a number of new initiatives to address the dual

NEW FAMILY-RELATED BENEFITS 153 responsibilities to family and job of an increasingly diverse work force. New types of programs are being considered. In addition to the standard benefits (discussed in Chapter 5), the newer employer programs include several types of family leave, flexible schedules and locations, assistance with dependent care, and increased choice among benefits through flexible benefit programs. Some of these programs, such as traditional part-time work and home-based work, as well as flexible schedules, also respond to employer needs to meet workload variations, to operate at nonstandard hours, and to reduce other costs as well. To some extent, employers are also assisting employees in finding and paying for dependent care services, some by providing the services direct- ly, others by subsidizing community programs and offering information and counseling services. Flexible benefit plans increase choice among vari- ous options, which is often helpful for dual-earner families. Nevertheless, many unmet needs remain. For instance, although a sub stantial proportion of women are able to obtain unpaid maternity leave, the majority of employed women do not have access to paid leave for pregnancy and childbirth-related disabilities, and only a small minority of fathers have paid paternity leave. Furthermore, most workers are not en- titled to any leave to care for children or ill family members, and a minority of workers lack even sick leave or disability leave for their own illness. As is true for standard benefits, family leave, direct services, and flexible benefit programs are least likely to be available to those employed in the low-wage service sector, in small firms, to nonunionized workers, and to those working part time. More flexible schedule arrangements are equally likely to be available to employees in small and large organizations, and traditional part-time work is more often provided by small employers and in the service sector. Unions have traditionally been opposed to such ar- rangements. New programs have been initiated more often in firms that employ substantial numbers of women. Development and implementation of new programs by employers and unions, as well as utilization of programs by employees, are affected by individual leadership and the informal workplace culture, in addition to cost considerations. There is tentative evidence that new family programs mod- estly improve recruitment and reduce absenteeism and turnover, all of which reduce labor costs for employers. There is little evidence, however, relating these programs directly to productivity. Lack of better information about the effects of new programs on productivity and costs is frequently reported by employers as a major barrier to new benefit programs. Con- cerns about liability are mentioned as an additional obstacle for provision ~ . at some services. Employer initiatives are also influenced by governments. For instance, equal employment opportunity laws, such as the federal Pregnancy Dis

154 WORK AND FAMILY: POLICIES FOR A CHANGING WORK FORCE crimination Act, as well as emerging state and local family leave laws, have increased leave availability. Federal and state tax incentives have encour- aged the provision of various dependent care assistance and flexible benefit programs, albeit at a substantial cost to the governments in lost revenues. In contrast, regulations such as the wage and hour laws, while providing protection for vulnerable workers, have inhibited the development of more flexible schedules and locations. Family leaves are helpful to workers with household responsibilities. For example, there is some evidence that family leave policies increase women's labor force participation and reduce the need for expensive out- of-home infant care. Both paid and unpaid leave have economic advantages for families. However, unpaid leaves are of limited benefit for low-income and one-parent families, who in many cases cannot afford to forfeit in- come for even 3 or 4 months. These are also the families who experience the greatest difficulty in finding adequate infant care. Based on such information as is available on both current and proposed policies, the panel concludes that providing short-term paid leave related to childbirth and somewhat longer unpaid leave for family care would be very helpful and need not be unduly burdensome for many employers. It is important that alternative ways of sharing costs continue to be explored to find ways of allocating them equitably among employers, employees, and the community. There is similarly a need to explore various ways to share the costs of other employee benefits, including public and private insurance pools, social insurance, and direct government subsidies. It must be ex- pected, however, that the larger the share of costs to be borne by individual employers, the more the business community is likely to resist expanding or even maintaining the present level of benefits and less likely that a majority of workers will have access to benefits that appear very promising for families.

Next: 7 Family-Oriented Programs in Other Countries »
Work and Family: Policies for a Changing Work Force Get This Book
×
Buy Hardback | $50.00
MyNAP members save 10% online.
Login or Register to save!
Download Free PDF

The United States has seen a dramatic increase in the number of dual-earner and single-adult families. This volume reviews accompanying changes in work and family structures and their effects on worker productivity and employer practices. It presents a wide range of approaches to easing the conflicts between work and family, exploring appropriate roles for business, labor, and government.

Work and Family offers up-to-date information, looking at how the family and the workplace arrived at their current relationship and evaluating the quality and the cost of care for dependents in this nation.

The volume describes the advantages and disadvantages of being part of a working family and takes a critical look at the range of benefits provided, including existing and proposed employer programs for families. It also presents a comparative review of family-related benefits in other countries.

  1. ×

    Welcome to OpenBook!

    You're looking at OpenBook, NAP.edu's online reading room since 1999. Based on feedback from you, our users, we've made some improvements that make it easier than ever to read thousands of publications on our website.

    Do you want to take a quick tour of the OpenBook's features?

    No Thanks Take a Tour »
  2. ×

    Show this book's table of contents, where you can jump to any chapter by name.

    « Back Next »
  3. ×

    ...or use these buttons to go back to the previous chapter or skip to the next one.

    « Back Next »
  4. ×

    Jump up to the previous page or down to the next one. Also, you can type in a page number and press Enter to go directly to that page in the book.

    « Back Next »
  5. ×

    To search the entire text of this book, type in your search term here and press Enter.

    « Back Next »
  6. ×

    Share a link to this book page on your preferred social network or via email.

    « Back Next »
  7. ×

    View our suggested citation for this chapter.

    « Back Next »
  8. ×

    Ready to take your reading offline? Click here to buy this book in print or download it as a free PDF, if available.

    « Back Next »
Stay Connected!