U.S. workers lost about $28 billion in wages during Covid-19 due to lack of access to paid leave, report finds

Personal finance

Families, parents and caregivers call on Congress to include paid family and medical leave in the Build Back Better legislative package during an all-day Nov. 2, 2021 vigil in Washington, D.C.
Paul Morigi | Getty Images Entertainment | Getty Images

Missing a week of work due to illness, child care or other obligations during Covid-19 cost workers without access to paid leave an average of $815 in wages, according to new research from the Urban Institute.

Consequently, workers missed out on roughly $28 billion more in wages between March 2020 and February 2022 compared to the previous two years, according to the report from the nonprofit research organization with support from the Robert Wood Johnson Foundation.

The U.S. is one of the few countries that does not have national policies for either paid sick leave or paid family and medical leave. Instead, workers face a “patchwork” of benefits and programs through employers or on the federal, state and local level, according to the research. The Family and Medical Leave Act of 1993 provides employees with unpaid leave provided they work for a covered employer and have reasons that qualify.

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The Covid-19 pandemic exposed the gaps in paid leave coverage that many employees face.

Workers reported a 50% increase in absences from March 2020 through February 2022 due to illness, childcare, family or personal obligations compared to the preceding two years, according to the research, which looked at the Current Population Survey from the U.S. Census Bureau and the U.S. Bureau of Labor Statistics.

The weekly unpaid absence rate among all workers jumped 60% from March 2020 through February 2022.

The majority of absences — 81% — were due to worker illness.

Yet less than half all absences during the first two years of the pandemic were paid, regardless of whether it was due to sickness, child care or other family or personal obligations.

Childcare absences were the least likely to be paid, with just about 24% of child care absences compensated. In comparison, 34% of worker absences for family or personal reasons were paid, along with 45% of absences for a worker’s illness.

Low-income, women and minorities hit hardest

Certain workers saw the largest increases in unpaid absences during the pandemic.

Workers who earned less than $25,000 per year had the highest unpaid absence rate among all groups. They were also three times as likely to be absent from work without pay compared to households with incomes of $100,000 and up.

“It was just this double whammy that hit low-income workers, where they were more likely to be sick and less likely to have paid time off to deal with their own illness,” said Chantel Boyens, principal policy associate at the Urban Institute.

Having a national paid sick leave policy could help reduce the spread of Covid and other illnesses, she said.

It was just this double whammy that hit low-income workers.
Chantel Boyens
principal policy associate at the Urban Institute

“By not making that available to the workers who are most likely to be sick and be out meant we’re missing an opportunity to both prevent the spread of Covid and protect workers wages,” Boyens said.

“At the same time, we’re doing damage to the broader economy as a result,” she said.

Women were 42% more likely to be absent without pay compared to men, particularly for reasons due to child care or personal and family obligations. While 82% of child care absences were assumed by women, just 24% of them were paid. At the same time, women represented 65% of the absences for personal and family reasons, of which 34% were compensated.

Meanwhile, 66% of Hispanic workers and 57% of Black workers went without pay for absences due to illness, child care or family or personal obligations.

Where efforts to expand paid leave stand

Paul Bradbury | Ojo Images | Getty Images

Federal policies were temporarily expanded to help workers who needed access to paid leave during the pandemic. But many workers were still left out, the research found.

The Families First Coronavirus Act temporarily created paid sick and family and medical leave for reasons related to Covid-19. It was originally available from April to December 2020, and then extended twice through December 2021.

The policy provided refundable tax credits to employers who provided paid leave to covered employees. But employers with more than 500 employees were excluded. There were also exemptions for employers with fewer than 50 employees and certain types of employees.

With the extensions of the policy, the employer mandate was eliminated, which made coverage voluntary.

Millions of workers were not covered by the temporary federal policy, the research found. Once it became voluntary, that likely further lessened program participation.

Separately, Democrats had hoped to enact a more permanent policy addressing paid leave with a broader social spending package. But the four weeks’ paid family and medical leave that passed the House failed to gain traction with the Senate.

Currently, 11 states and Washington, D.C., provide paid leave programs, with four states adding plans since 2020. States with paid leave are California, Colorado, Connecticut, Delaware, Oregon, Maryland, Massachusetts, New Jersey, New York, Rhode Island and Washington.

As state and federal policymakers consider expanding paid leave programs, previous Urban Institute research suggests certain features could help narrow the access gaps and financial hardships. Such options include broader worker coverage and eligibility, progressive wage replacement, job protections and more worker outreach and education.

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