CBO Projects Federal Paid Leave Program Would Reduce Employer-provided Benefits

December 03, 2021

As part of its economic analysis of the Build Back Better Act (H.R. 5376), the Congressional Budget Office predicts that most employers who currently offer paid leave would provide fewer weeks of leave and less pay due to the bill's four-week federal paid family and medical leave program.

Greater reliance on government programs:  The CBO anticipates that most employees who currently have access to employer-provided benefits would rely on the state or federal program for the weeks in which they would be eligible for benefits.  The report acknowledges that some employers who currently offer paid family and medical leave might provide additional payments or additional weeks of benefits. 

The CBO authors do not provide details or specifics on their conclusions, nor do they recognize that most employers offer more than the currently proposed four weeks of paid leave.  However, they note that employers that reduce paid leave would likely increase earnings or other benefits to attract and retain talent.

Outlook:  The Build Back Better Act is now in the Senate awaiting consideration.  However, the exact timing of when the Senate will take up the bill remains unknown as the chamber will have to consider other priority legislation including raising the debt limit by December 15, and the National Defense Authorization Act, meaning the bill may not see a vote in the Senate until January.  Even if the Senate considers the bill, it has a long road ahead: some moderate Democrats still object to certain House-passed provisions and the parliamentarian could rule that several provisions are non-budgetary items.  Meanwhile, the bill will be subject to hundreds of amendments by Senate Republicans.  Congress is currently set to adjourn on December 10, but in accordance with recent practice that could get extended through December 24.