Parental Leave:

Estimated Costs of H.R. 925, the Family and Medical Leave Act of 1987

HRD-88-34: Published: Nov 10, 1987. Publicly Released: Nov 10, 1987.

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In response to a congressional request, GAO estimated the cost to employers of H.R. 925, a bill that would permit employees to take up to 10 weeks of unpaid leave over a 2-year period upon the birth, adoption, or serious illness of a child or parent and up to 15 weeks every 2 years for their own illness. The bill would apply to firms of 50 or more persons during the first 3 years after enactment, and to firms of 35 or more thereafter.

GAO estimated that, for employers of 50 or more persons, it would cost $90 million annually to continue health benefits for employees on unpaid leave to care for new children, $10 million for employees on leave to care for seriously ill children, $35 million for employees on leave to care for seriously ill parents, and $53 million for personal temporary medical leave. GAO also estimated that, when it included firms with between 35 and 49 employees, the annual costs would total $102 million, $11 million, $38 million, and $61 million, respectively. GAO found that: (1) employers would have few measurable net costs associated with replacing workers or maintaining current output levels while workers were on unpaid leave; and (2) it could not estimate the costs associated with federal administration and enforcement, since the extent of violations and the costs of investigations and adjudication were unknown.

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