A modern leave policy both employers, employees could love

Ivanka Trump is currently making the case for how tax reform can benefit families and women.  That’s an important point, and tax-reform certainly can help by letting people keep more of their hard-earned money and creating better job opportunities for all Americans.  

But policymakers should also consider other ways that they help families by modernizing our labor policies, such as by creating a system of Universal Leave Accounts (ULA).  It’s a simple idea:  Just as people are encouraged to save for retirement and education expenses, they should be encouraged to save for time that they cannot work.  Workers would put pre-tax earnings, up to a maximum, into their accounts, and then those funds could be used to “pay” for their leave time when it’s needed.

{mosads}The government could match contributions to encourage participation and provide loans for those who require leave before they have accumulated sufficient funds on their own.  Employers would likely contribute to these accounts just as they do with 401Ks.  Charities could donate to workers’ ULAs, Employees could even charitably contribute to other workers accounts to help someone in dire need of paid of leave. Importantly, the ULA could allow “gig” employees to have paid leave time, even when they are not officially employees.

Ivanka Trump hosting dinners with lawmakers to push for expanded child tax credit: report https://t.co/eglDJDdhc2 pic.twitter.com/sZsvJ5NP15

— The Hill (@thehill) October 10, 2017

This approach would avoid the biggest problem with traditional government mandates and benefit programs: their one-size-fits-all approach. For example, a typical government leave program will provide a specified number of weeks of paid leave at the time of a family medical emergency — take it or leave it.

That approach may work for some. Others might want to work part time and spread the leave allowance over a year or more. Some may have the help of a parent when a baby is an infant, and need their paid leave when the child is 6 months or older. Or some work shifts, and be able to schedule work time for when their partner can be at home caring for the baby, but need a few hours of leave each day.

Nobody — certainly no bureaucracy — can conjure up the infinite number of scenarios of how approximately 150 million working Americans might best use paid leave.

With ULA, by contrast, the government would only specify under what conditions funds could be tapped. Employers along with their employees would confirm that a leave request complies with the law.  The employer would be obligated to allow the leave.  If there is fraud on either part, fines would be imposed.

Universal Leave Accounts would also allow employees to use leave judiciously:  Unlike many paid leave benefits that are “use it or lose it”, encouraging workers to needlessly take time off, the unused money in the accounts would be there for the future.  If a worker retires with money remaining in his or her ULA, that could be used for retirement.  This would encourage more workers to consider alternatives to taking time off.  

The point is that employees should be free to structure leave to suit themselves, while also considering the needs of their employers and coworkers. No government-run program could match the flexibility of a ULA.  Our modern workforce needs modern laws and benefit systems that recognize that workers aren’t drones, but unique individuals.

Frayda Levin is a former small business owner, Carrie Lukas is the president of Independent Women’s Forum, and Christina Sandefur is the executive vice president of the Goldwater Institute.