The Right Policies for the Times: Unweaving UI, Paid Leave, and State Preemption

Libby Chamberlin is a 2020 graduate of the Trachtenberg School. She is a research intern with the State Fiscal Policy group at the Center on Budget and Policy Priorities. 

The following is an op-ed and does not necessarily reflect the views of Policy Perspectives or the Trachtenberg school.

The COVID-19 public health crisis has plunged the country into deep recession and highlighted the need for paid sick leave policies that protect working families’ health and guard against perilous economic decline. As workers who are still employed struggle to balance caregiving and workplace responsibilities, and as layoffs and furloughs continue, many states have expanded their unemployment insurance (UI) systems to extend benefits to more workers facing a broader range of personal circumstances impeding their ability to work. One such adaptation is extending UI benefits to workers who voluntarily depart work due to illness or caregiving responsibilities, essentially causing UI to act as paid leave.

While this adaptation may provide temporary relief for some, the UI system is not a paid leave system. UI and paid leave are fundamentally different, though complimentary, policies. The former provides compensation for workers who are able and willing to work but cannot find employment; the latter guarantees that workers who are sick can take time off from work to care for themselves and their families without losing income. Out-of-work individuals should have the assurance of a system that will activate to support them in times of need. However, individuals’ circumstances should dictate which system provides that support. For sick workers, or workers whose caregiving responsibilities require them to depart work temporarily, tapping into paid leave is most appropriate. UI is the system designed to support workers who lose their jobs outright, and while state UI systems would benefit from permanent updates, like a jobseekers allowance, expecting the UI system to act as paid leave puts strain on this already burdened system.

State Limits to Local Solutions

Realizing the value of keeping workers connected to their workplaces through illness, many states mandate some type of paid leave policy. Even in states that lack state-level paid leave, many municipalities mandate that employers in their jurisdiction provide paid leave options to their workers. However, some local governments that may wish to enact more robust paid leave policies have been prevented from doing so because of bans at the state level. In fact, 22 states preempt cities from requiring local businesses to provide paid sick leave to their workers, instead favoring limited government and an avoidance of conflicting state and local policies.

Of course, the policy and legal battle over paid leave existed before the present pandemic. In some states, that manifests as a reluctance to pass paid leave policies for reasons of fiscal feasibility. In others, preemption, an inherently political tool, is leveraged to prevent paid leave. Dallas, Texas, for example, tried to pass a city ordinance that would require employers to provide sick leave to their workers. The ordinance was blocked by a judge earlier this year. The state does not preempt paid leave, but the judge who issued the injunction found that the ordinance would constitute a wage increase, which the state does preempt. Meanwhile, as of March, UI benefits “may” available to Texas workers if they “stay home to care for a sick family member,” provided that family member is a minor child. Clearly, the statutory clarity of paid leave would be simpler and more appropriate.

State Approaches

Many states that do not have preemption measures in place are still relying on expanding UI rather than leaning on paid sick leave during the COVID-19 crisis. In Arizona, for example, workers who leave employment for COVID-19-related caregiving responsibilities are eligible for UI. Delaware changed its definition of “temporarily laid off” to include those who cannot work due to caring for a family member, making these workers eligible for unemployment insurance. California opted to make case-by-case determinations for workers who can’t work in order to care for children. The fact that states with paid leave in place have expanded UI in this manner underscores how severe the present pandemic and recession are.

Some states that do preempt paid leave have also opted to extend UI benefits to workers who have left employment due to caregiving responsibilities. In New Hampshire, UI has been made available for workers who have COVID-19, are caring for a dependent with COVID-19, or are under quarantine. Michigan, which through the Local Government Law Regulation Act of 2015 preempted local governments from enacting paid or unpaid leave policies, expanded UI to include workers “who cannot work due to unanticipated childcare responsibilities due to school closures, or those who are forced to care for loved ones who become ill.”

By expanding eligibility for UI to include those who depart work due to caregiving responsibilities, these states are implicitly recognizing the value and necessity of paid leave and the role these policies have in protecting families. Instead of relying on their UI systems, these states would do well to lift preemptive measures that prevent local paid leave ordinances. Absent universal paid leave, this move by states would allow municipalities to support workers, insulate their economies and progress toward state-wide mandated paid sick leave.

Beyond the Pandemic

As the recessionary impacts of the public health emergency continue to hit workers, many states are realizing the stabilizing power of paid leave and some have adapted their UI system as a stopgap. COVID-19 is proving that paid leave is a necessary support for working families and for the entire economy. UI should be modernized to include more types of workers and provide more responsive assistance. But asking UI to act as paid leave isn’t a sustainable change for states’ already-stressed UI programs, and it doesn’t address working families’ longstanding need for paid leave. Local governments need the power to pass paid leave ordinances. States should lift preemptive limitations on local governments and allow them to provide critical employment benefits to every worker, beyond the current public health crisis. 

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