Jan. 15 (Bloomberg) -- Roxanne Vivanco just returned to her banking job in Ramsey, New Jersey, after spending 12 weeks with her newborn daughter without having to deplete her savings.
The 36-year-old community development manager at Toronto-Dominion Bank was able to tap a state-administered benefit that finances family leave through employee payroll contributions. “It was a blessing,” said the mother of three. The money “helped with taking care of our house bills as well as food for the newborn and my other kids.”
Vivanco considers herself fortunate in a nation where only 12 percent of workers get paid time off to care for a baby or a sick parent, according to the U.S. Labor Department. Rhode Island this month became the third state to start a paid family leave insurance program, which was initiated by California in 2004 and by New Jersey in 2009.
A bill introduced last month in Congress would create a similar model nationally. That would make more women eligible for a benefit usually offered in the U.S. only at large companies such as Bank of America Corp. or Goldman Sachs Group Inc.
Papua New Guinea is the only other nation that doesn’t provide or require a paid maternity leave, according to information on 185 countries compiled by the United Nations’ International Labor Organization. It recommends 14 weeks off at a level no lower than two-thirds of previous earnings.
The safety net also could encourage more mothers to return to the labor force at a time when the female participation rate in the U.S. is at a 20-year low. Paid parental leave policies help explain why the share of women working in countries such as Germany and Spain surpassed the U.S. over the two decades ending in 2010, says Cornell University economics professor Francine D. Blau.
California’s program increased the probability that mothers in that state would be back at work within nine months to a year after giving birth, according to research by Christopher J. Ruhm, professor of public policy and economics at the University of Virginia in Charlottesville, and Charles L. Baum, professor of economics at Middle Tennessee State University in Murfreesboro.
“It’s probably an increase in job continuity,” Ruhm said. “Before, maybe you had to quit your job if you wanted to spend time at home with a baby.”
Most women in the U.S. must choose between taking an unpaid leave, trying to combine work with family duties or quitting the workforce.
Eliza Kane, 32, is among them. Shortly after informing her supervisors she was pregnant, Kane says she was told in April her part-time job at the French Cultural Center of Boston was being eliminated. Catheline H. van den Branden, president and executive director of the French Cultural Center, declined to comment on personnel matters.
After trying to find new employment without success, Kane says she now hopes to stay at home until her baby, born in September, is at least six months old.
“I’m just in a survival mode right now,” she said. “I think there needs to be a standard parental leave that is supported by some sort of public fund.”
Legislation introduced by Representative Rosa DeLauro of Connecticut and Senator Kirsten Gillibrand of New York, both Democrats, would do just that. It seeks to establish an independent trust fund within the Social Security Administration, financed by a new payroll contribution from employees and employers of 0.2 percent of wages, to pay benefits and administrative costs.
Workers would be able to take a partial paid leave of up to 12 weeks for the birth or adoption of a child, their own serious health condition or that of a child, spouse or domestic partner.
The National Federation of Independent Business opposes the bill because it would remove the flexibility businesses now have in the type of leave to offer, according to Kate Bonner, manager of legislative affairs at the Nashville, Tennessee-based trade group.
Nationally, women at companies of more than 50 employees can take up to 12 weeks of unpaid time after childbirth under the Family and Medical Leave Act of 1993. Federal and other government employees can also take uncompensated time. Less than a fifth of state and local government workers had access to paid family leave, according to Labor Department data.
To retain women workers, some large companies have adopted more generous policies. Goldman Sachs provides 16 weeks of paid maternity leave. For the New York-based company the benefits are “an investment in our employees and a means to provide support so that they feel they can appropriately balance career pursuits with their personal responsibilities,” spokeswoman Leslie Shribman said in an e-mail.
The share of employers offering time off with full pay after childbirth dropped to 5.2 percent in 2012 from 6.1 percent in 2005, according to a survey by the Family and Work Institute, a New York-based nonprofit research organization that studies issues involving the workplace, youth and early childhood. Some 41.1 percent offered unpaid leave in 2012, while 15.5 percent said their policy depended on the situation, which often means it varies by job level.
Paid maternity benefits are available for “the most educated, most privileged among us,” said American Association of University Women Vice President Lisa M. Maatz. “You don’t see this being offered to waitresses. It’s something that can become very class-based and further create income gaps.”
Michelle Meyer, a senior U.S. economist at Bank of America Merrill Lynch in New York, took a paid 12-week leave after the birth of her son, during which she was promoted to a managing director. She said she enjoyed a smooth transition from delivering the baby, bonding and then returning to the bank.
Unpaid maternity leave will wipe out what Amber Stallings, who’s due in March, has managed to put aside working for $8.40 an hour at a Wendy’s Co. restaurant in Chicago. The mother of a two-year-old, who says she couldn’t make ends meet without food stamps and health care under Medicaid, has to return to work after six to eight weeks.
“I have a little money saved up but it’s not enough, ” said Stallings, 20, who participated in demonstrations by fast-food workers last month to demand a $15 hourly wage. “I don’t think it will last that long. It’s really hard because you always have to make decisions, ‘am I going to get medicine or food, food or bus fare, bus fare or work clothes?’”
Maternity benefits are paid for six to eight weeks for restaurant managers under short-term disability policy, said Bob Bertini, a spokesman for the Dublin, Ohio-based company. Other employees who are eligible can get unpaid, job-protected leave under federal and state laws, he said.
The lack of paid maternity leave is one reason the U.S. is falling behind other advanced countries in the share of women in the workforce, says Blau of Cornell in Ithaca, New York. The U.S. fell to 17th place in 2010 among 22 Organization for Economic Cooperation and Development nations from sixth in 1990. In 2012, it slipped to 18th.
The U.S. has gone from being “one of the leaders in female labor force participation among the developed countries to the situation where we have one of the lower” rates, said Blau, a co-author of the study, in a phone interview.
Backers of the federal legislation say it would help address that. “When women have access to paid leave after the birth of the child, they are more likely to return to work, to the same employer, and at the same or higher pay level,” said Sarah Jane Glynn, associate director for women’s economic policy at the Center for American Progress in Washington. “We’re one of the only countries on the planet that doesn’t already offer this. It’s kind of embarrassing.”
That assurance helped during her leave, said Vivanco, who combined benefits offered by the bank with the program. “Knowing that there was the state assistance allowed me to feel OK,” she said about taking the time off. “It completely gave me that relief of not having to be worried about my position and coming back to it.”
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