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This report presents the Office of Personnel Managements (OPMs) findings and recommendations on paid parental leave for the purpose of childbirth and adoption. House Report 106-1033 for H.R. 5658 (Public Law 106-544, December 15, 2000) directed OPM to develop alternative means for providing Federal employees with at least 6 weeks of paid parental leave in connection with the birth or adoption of a child (apart from any other paid leave). In addition, the House Report directs OPM to determine whether paid parental leave can be expected to

(1) curtail the rate at which Federal employees are being lost to the private sector;

(2) help the Government in its recruitment and retention efforts generally;

(3) reduce turnover and replacement costs; and

(4) contribute to parental involvement during a childs formative years.

To determine whether a new paid parental leave benefit would aid the Federal Governments recruitment and retention efforts, OPM researched existing leave benefits in the non-Federal sector in the U.S. and in Europe. In the U.S. we found that while paid maternity leave is available for approximately half of the female workforce covered by existing surveys, the time off is generally paid through temporary disability coverage. In addition, only 7 percent of new fathers receive paid paternity leave. In European countries, paid parental leave is the norm and usually involves a lengthy period of paid time off. However, other types of leavee.g., leave for the care of a sick spouse, child, or parentoften are either unavailable or unpaid.

As part of our study, we surveyed human resources directors in Federal Executive departments and agencies to obtain their views on the availability of paid parental leave as a recruitment and/or retention tool. We worked with the Human Resources Management Council to refine survey questions to assess the value of paid parental leave as one of the flexibilities available to Federal agencies to address recruitment and retention problems. The agencies overwhelmingly indicated that an additional paid parental leave benefit would not be a major factor in enhancing their recruitment and retention situations. The agencies indicated that challenging work, opportunities for training and advancement, and flexible workplace arrangements rank above paid parental leave as factors important in recruiting and retaining a capable workforce. The agencies responses are borne out by research in the private sector which indicates that the quality of the job and the support provided to employees in the workplace are crucial to employer success in recruiting and retaining a high-quality workforce.

OPM has embarked on a Strategic Compensation Initiative in an effort to provide agencies with more flexibility in the way employees are compensated and to simplify compensation administration. The goal of the initiative is to develop legislative recommendations to modernize Federal pay and leave systems. As part of this effort, we will continue to seek and evaluate the views of interested parties on the importance of paid parental leave within the context of an overall Federal compensation package.

The House report asked OPM to develop alternative means of providing 6 weeks of paid parental leave to Federal employees. However, until a comprehensive study of Federal leave programs can be completed, we believe employees can meet their family responsibilities with the many flexibilities that are already available to them. In the interim, employees may use annual leave; sick leave for personal needs, family needs, and adoption purposes; advance annual and sick leave; paid or unpaid leave under the Family and Medical Leave Act; and donated annual leave under the Federal leave transfer and leave bank programs. OPM will take steps to ensure that Federal agencies educate their workforce about those flexibilities.

II. Background

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Representative Carolyn Maloney (D-NY) introduced legislation in the 106^th Congress that would have amended title 5, United States Code, to provide that one-half of the total amount

(12 weeks) of unpaid leave under the Family and Medical Leave Act of 1993 (FMLA) available to a Federal employee for the birth of a child or the placement of a child with the employee for adoption or foster care would be paid leave. This paid leave would have been in addition to any annual or sick leave an employee may otherwise elect to use under the FMLA as part of his or her 12-week entitlement. In an effort to determine whether such paid parental leave would help the Government in its efforts to recruit and retain qualified personnel, House Report 106-1033 for H.R. 5658 (Public Law 106-544), as printed in the Congressional Record on December 15, 2000, directed OPM to conduct a study to develop one or more alternative means for providing Federal employees with at least 6 weeks of paid parental leave in connection with the birth or adoption of a child.

III. Current Federal Leave Benefits

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The Federal Government offers numerous leave flexibilities to assist employees in meeting their work and family obligations, including paid time off for childbirth and adoption and care of the newborn or adopted child. Federal employee leave benefits are based on employee service credit and time in a pay status. A new employee begins Government service accruing 13 days of annual leave each year. After 3 years of service, the annual leave accrual rate increases to 20 days each year, and at 15 years of service, the employee accrues 26 days of annual leave each leave year. The amount of annual leave that may be carried over from one leave year to the next is capped at 240 hours (30 days) for most employees. At any time in the leave year, an agency may advance to an employee the amount of annual leave he or she would accrue during the remainder of the leave year.

A Federal employee earns 13 days of sick leave each leave year, and he or she is entitled to carry over an unlimited amount from one leave year to the next. An employee is entitled to use sick leave for periods of incapacitation resulting from physical or mental illness or injury; for medical, dental, or optical examination or treatment; for family care and bereavement purposes; and for purposes related to the adoption of a child. An agency may advance up to 30 days (6 weeks) of sick leave to an employee for a medical emergency or for adoption purposes.

Most employees also are entitled to a total of up to 12 weeks of unpaid leave under the FMLA for specified family and medical needs, including care of a newborn or newly adopted child. An employee may choose to substitute annual leave or sick leave, where appropriate, for unpaid leave under the FMLA. It is important to note that Federal employees are entitled to 12 weeks of FMLA leave in addition to any other paid or unpaid leave approved by the supervisor. In addition, if an employee experiences a personal or family medical emergency and has exhausted all of his or her available paid leave, he or she may apply for donated annual leave under the leave transfer or leave bank programs. Although the Federal Government does not offer temporary disability coverage (providing partial salary replacement) to its employees, the employees own sick leave account and/or transferred annual leave under the leave transfer and leave bank programs (providing full salary replacement) are available in maternity situations.

A new mother who is a Federal employee is entitled to use her sick leave (which she accrues at a rate of 13 days per year) for any period of incapacitation resulting from pregnancy and/or childbirth. For most new mothers, this period of eligibility to use sick leave ranges from 6 to 8 weeks, as certified by her physician. If the new mother does not have sufficient sick leave to cover her period of incapacitation, she may request advance sick leave from her agency or receive donated annual leave through the agencys leave transfer and/or leave bank programs. If she elects to remain at home for an additional period following her recovery, she is entitled to use up to 12 weeks of unpaid leave under the FMLA. She may choose to substitute her annual leave (which she accrues at a rate of 13, 20, or 26 days a year, depending on length of service) for any of the FMLA leave without pay. She may also request and her agency may grant additional annual leave or leave without pay beyond the amounts guaranteed by the FMLA.

A new father who is a Federal employee is entitled to use his sick leave (up to a maximum of 12 weeks) to accompany his wife to medical appointments, to be with her during her hospitalization, and to care for her during her recovery period (about 6 to 8 weeks). If the new father does not have sufficient sick leave to cover his wifes full recovery period, he may request donated annual leave through the agencys leave transfer and/or leave bank programs. If the new father would like additional time off to care for the newborn, he may use up to 12 weeks of unpaid leave under the FMLA. He may choose to substitute his annual leave (which he accrues at a rate of 13, 20, or 26 days a year, depending on length of service) for any of the FMLA leave without pay. He may also request and his agency may grant additional annual leave or leave without pay beyond the amounts guaranteed by the FMLA.

Adoptive parents are entitled to use sick leave (without limit) for purposes related to the adoption of a child. Such purposes may include but are not limited to the following:

Appointments with adoption agencies, social workers, and attorneys;

Court proceedings;

Required travel;

Any periods of time the adoptive parents are ordered or required by an adoption agency or a court to take time off from work to care for the adopted child; and

Any other activities necessary to allow the adoption to proceed.

New adoptive parents may be advanced up to 30 days of sick leave for these purposes. They also are entitled to up to 12 weeks of unpaid leave under the FMLA and may choose to substitute their annual leave for FMLA leave without pay. They may also request and the agency may grant additional annual leave or leave without pay beyond the amounts guaranteed by the FMLA.

In studies comparing Federal benefits to those in the non-Federal sector, OPM found that the total amount of paid time off available to Federal employees each year meets or exceeds that which is generally available to employees in the private sector. The Federal Government offers these benefits on a nondiscriminatory basis. The principle of equal pay for equal work mandates that paid time off, which is part of an employees total compensation, be available equally to all employees. Although Federal employees may used their accrued annual and sick leave in a wide variety of ways (as described above), the rate of accrual of both is the same for all employees with the same amount of service.

IV. Parental Leave in Non-Federal Establishments

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Since the primary thrust of the House Reports request centers on the recruitment and retention benefit that may be derived from the implementation of a paid parental leave benefit for Federal employees, OPM looked first at parental leave policies offered by non-Federal employers. As these establishments are our competition for recruiting and retaining well-qualified employees, we sought to determine whether a parental leave benefit is being widely offered by non-Federal employers and whether non-Federal employees regard this benefit highly.

Our initial research began with data from the Bureau of Labor Statistics (BLS). BLS regularly surveys non-Federal establishments on employee benefits. However, both the 1997 Survey of Medium and Large Private Establishments and the 1998 Survey of State and Local Governments published by BLS stated that paid family leave benefits were rare,[1] and parental leave was not broken out as a separate category in either of these surveys.

Ultimately, we relied on four surveys of employers and employees in the non-Federal sector conducted within the last 5 years. Survey findings concerning parental leave are summarized below.

Balancing the Needs of Families and Employers

Family and Medical Leave Survey - 2000 Update

U.S. Department of Labor

In 1995, the Commission on Family and Medical Leave conducted a survey of employers and employees to determine the impact of legally required and voluntary family and medical leave policies. In 2000, the Department of Labor (DOL) commissioned updates to the 1995 surveys. The 2000 Surveys document the types of family and medical leave benefits offered and, correspondingly, the benefits that employees are using. The 2000 Survey of Establishments was designed to represent U.S. private business establishments. A total of 1,830 employer interviews were completed.

Of the establishments surveyed, 34.4 percent of surveyed employers reported providing full pay to new mothers for maternity-related reasons. The survey did not ask whether the employee received pay for time off through a separate category of parental leave, through the employees own vacation and/or sick leave, or through temporary disability compensation programs. DOL also reported that 24 percent of the establishments surveyed provide full pay to parents on leave for care of a newborn, but again, the type of replacement pay was not characterized.

IPMA/NASPE 2000/2001 Benchmarking Survey -- Total Compensation

International Personnel Management Association and National Association of State Personnel Executives

Two hundred and eleven Federal, State, and local jurisdictions participated in the 2000/2001 survey. These jurisdictions represented more than 3 million employees. The majority of the participants were cities, towns, and States. The respondents indicated that paid parental leave for birth or adoption was offered by 51 percent of the organizations surveyed. However, the survey did not differentiate between maternity and paternity leave or indicate whether the employee received pay for time off through a separate category of parental leave, through the employees own vacation and/or sick leave, or through temporary disability compensation programs.

1998 Business Work-Life Study (BWLS)

Families and Work Institute

The Families and Work Institute undertook one of the first and most comprehensive studies of how U.S. employers are responding to the work/life needs of the Nations workforce. The survey was funded by Allstate Insurance, the Chase Manhattan Bank, the Commonwealth Fund, Freddie Mac Foundation, Kaiser Permanente, and The Travelers Foundation. The survey included a representative sample of 1,057

for-profit employers (84 percent of the sample) and not-for-profit employers

(16 percent of the sample) with 100 or more employees. The survey was designed to complement the Families and Work Institutes 1997 National Study of the Changing Workforce (NSCW), which surveyed a representative sample of employers in the U.S. labor force.

The 1998 survey reported that 91 percent of the establishments granted at least

12 weeks of leave to a new mother, in conformance with the FMLA. Similarly,

90 percent of the establishments provided at least 12 weeks of leave to new fathers, and 90 percent provided leave to both parents for adoption and foster care purposes. Mothers employed by 53 percent of the establishments received some replacement pay during their absence. However, 81 percent of the establishments providing replacement pay reported funding this payment through a general temporary disability benefits program. Only 13 percent of new birth fathers received at least some replacement pay, and only 12.5 percent of adoptive parents of either sex received some replacement pay. The survey did not address whether the replacement pay, other than temporary disability, was from the employees own paid leave account or a separate parental leave benefit.

2000 SHRM Benefit Survey

Society for Human Resource Management

The 2000 Society for Human Resource Management Benefit Survey was distributed to

606 human resources professionals. The respondents were fairly evenly split between companies with fewer than 250 employees and those with more than 250 employees. The survey contained 120 questions on the different kinds of benefits extended to employees, with particular attention to leave benefits. The survey specifically requested information about separate paid parental leave benefits.

The survey results indicate that only a small number of organizations provide paid maternity leave (other than partial pay replacement under temporary disability compensation programs) or paid paternity leave. While 12 percent of the respondents indicated that paid maternity leave is offered to their employees, 85 percent of the respondents reported no such benefit. Paid paternity benefits were minimal. Only

7 percent of the employers surveyed offered paid paternity leave to their employees. In addition, fewer than 1 percent of the respondents reported that their organizations were planning to offer paid maternity or paternity benefits in the future.

While non-Federal establishments are conforming to the requirements of the FMLA and permitting employees to use up to 12 weeks of leave for certain family and medical needs, few establishments provide a separate entitlement to paid parental leave for birth or adoption purposes. Paid time off for maternity purposes is largely funded by temporary disability insurance and the employees own paid leave. It is important to note that under the Department of Labors regulations implementing the FMLA in non-Federal establishments (part 825 of title 29, Code of Federal Regulations), any paid time off provided by the employer or through temporary disability insurance or the employees own paid leave is counted as part of the 12 weeks of guaranteed FMLA leave.

V. Parental Leave Polices in Europe

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Maternity leave mandates were first enacted in Europe nearly a century ago. Maternity policies were first implemented to protect the health of the mothers and their newborn children. However, unlike American FMLA policies, which permit a new mother to remain away from work voluntarily to care for her newborn child, most European countries require mandatory maternity leave periods, and several limit the kind of work that can be performed by a pregnant woman. Mandatory leave periods (whether partial or over the entire leave entitlement) exist in 12 of the 15 European Union states, and two countries prohibit certain types of work during pregnancy.[2]

European countries have increasingly adopted maternity leave policies as a means of increasing birth rates and reducing infant mortality rates. With a shrinking workforce and growing social welfare systems, European countries have become concerned that the working age population is not sufficiently large to support growing social insurance obligations. The European Union (EU) has established a minimum standard of 14 weeks of maternity leave to be paid at a level no less than the individual would have received if absent from work because of illness. European maternity and personal illness leaves usually offer lengthy periods of leave with pay. However, other types of leavee.g., leave for the care of a sick spouse, child, or parentoften are either unavailable or unpaid, and leave programs in Europe often are subject to restrictions.[3]

European governments (through social insurance systems) and employers and employees (through payroll taxes) share the cost of providing paid parental leave benefits. In a few countries (Germany, Italy, and Luxembourg), the government funds the entire cost. In Switzerland, employee insurance premiums fund the entire cost.[4]

VI. Cost of Providing Paid Parental Leave

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The Congressional Budget Office (CBO) estimated the cost of providing a new entitlement to 6 weeks of paid parental leave based on population statistics provided by the Office of Personnel Management. CBOs estimate was completed in September 2000 in response to requests for costing of H.R. 4567, the Federal Employees Paid Parental Leave Act of 2000. For purposes of estimation, CBO assumed that the Act would be implemented on or around April 1, 2001, and therefore estimated costs for only half of fiscal year 2001. After 2001, costs were projected to grow with inflation (estimated at 4 percent).

CBO assumed that the potential users of the new leave would be primarily the 730,000 civilian Federal employees who are between the ages of 20 and 45. The average salary of the 350,000 women in this group at the time of the estimate was $43,200. Thus, 6 weeks of paid leave would cost, on average, about $5,000 per female employee.

CBO assumed a birthrate of 6.99 percent for women in this age group, using information provided by the Population Reference Bureau and the National Center on Health Statistics. Adding an adoption factor based on information from the National Center on Health Statistics raises the likely utilization rate to 7.24 percent. Applying that rate to the number of women eligible for parental leave yields about 25,300 women who might give birth or adopt a child in a given year. CBO assumed that each of these women would take the maximum amount of leave and estimated the value of the leave to be about $126 million in the first year (2001) if the leave were available for the entire year.

Since the new leave would also be available to men, CBO calculated what 6 weeks of paid leave would cost on average for the 380,000 men in the same age group, who earn an average of $50,800. Six weeks of paid leave would cost, on average, about $5,800 per male taking the maximum 6 weeks amount. CBO could find no reliable statistics, however, linking female birth rates to the rate at which men might father or adopt a child. If those men experience the birth and adoption rates above, roughly 27,500 men would be eligible for parental leave. CBO assumed that eligible men would take the leave at about one-half the rate of women, resulting in the use of another $80 million worth of leave in the first year. Assuming that the leave had been available for all of year 2001, CBO estimated the resulting cost for both men and women to be $206 million for 2001 and a total of about $1 billion for the 2001-2005 period.[5]

Based on CBOs methodology, if the leave became available to employees on or about

April 1, 2002, the cost for half of fiscal year 2002 is estimated to be $107 million, with a total cost of about $1.05 billion for 2002-2006.

CBO also offered comments on how the cost of the bill could be incurred by agencies:

An increase in payments to employees who would substitute paid leave for unpaid leave;

An increase in the amount of leave used at the time of birth or adoption; and

The use of the new parental leave entitlement in place of accrued annual or sick leave (which employees could then use at another time).

The first component would result in additional expenditures. The others might or might not, depending, in each case, on the extent to which individuals would use other leave and on how the agencies would compensate for their absence. CBO had no basis for estimating the magnitude of the various components of the bills cost, but the amount of cost realized in any given year would be lower than the estimates shown above if there is a significant amount of substitution of new parental leave for accrued annual or sick leave. In that case, the cost of using the accrued leave would be postponedperhaps to a later year.

A further consideration is the current age of the Federal workforce and the fact that a wave of retirements is being predicted for the next 5 years. With a possible influx of younger employees to replace these workers, an entitlement to paid parental leave could be used much more frequently than current workforce demographics might suggest.

VII. Effect of Parental Leave on Future Parental Involvement

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OPM also was asked to evaluate whether providing employees with paid parental leave would contribute to parental involvement during a childs formative years. OPM has no expertise or experience in evaluating the potential effect of such a policy in this regard. We can only point to a related evaluation now underway by the Department of Labor.

In 2000, DOL proposed regulations to allow States to provide Birth and Adoption Unemployment Compensation (BAA-UC) to new parents, permitting at least partial wage replacement. It was hoped that enabling parents to have this time to be with their newborn and newly-adopted children by providing them with partial wage replacement would promote their long-term attachment to the workforce. Through voluntary State participation, the BAA-UC experiment would allow DOL to gather the necessary facts on whether a positive correlation exists between the provision of UC to parents of newborns and newly-adopted children and a demonstrated connection to the workforce by their parents. A comprehensive evaluation will be conducted when at least four States have operated BAA-UC for at least 3 years.[6]

Although studies suggest a positive impact on the workforce from compensated maternity and family leave, DOLs would be the first test of the effects on employers and employees of providing partial wage replacement for parents following the birth or adoption of a child. DOL envisions conducting a study 2 years after the implementation of BAA-UC in at least four States. However, at this time no State has adopted BAA-UC. There is no doubt that time spent with a newborn or newly-adopted child is important in developing the bond between parent and child. The implementation of BAA-UC may provide a basis for future studies on whether providing parents paid leave for such bonding time in the first year results in increased parental involvement thereafter.

VIII. Survey of Federal Human Resources Directors

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For a perspective on the value of paid parental leave as a recruitment and retention tool for Federal agencies, we turned to the human resources directors of Executive departments and agencies. These officials deal with recruitment and retention issues on a day-to-day basis. We prepared a survey requesting opinions as to whether paid parental leave could be expected to help the Federal Government in its recruitment and retention efforts and whether a new leave entitlement would make it more difficult for Federal agencies to accomplish their missions. (See Appendix 1 -- Survey on Paid Parental Leave.) Although this approach relies on the subjective opinions of the Federal human resources community, we believe the combined experience in recruiting and staffing represented by this group is the best resource available to evaluate the merits of parental leave as a recruitment and retention tool.

The first question in the survey asked whether agencies believe 6 weeks of paid parental leave would aid in retention efforts. Most agencies do not believe paid parental leave would be a major factor in enhancing their retention situation. However, one agency pointed out that for employees in their child-bearing years, 6 weeks of paid parental leave would be an inducement to stay in the Federal Government until they had used their full allotment or until they felt they no longer needed paid parental leave. Another agency suggested that with the overall generosity of current leave benefits, a separate category of parental leave was not necessary, while a smaller agency expressed fear that an employee would simply use this benefit and then leave Federal service.

When asked whether paid parental leave would be a significant recruitment tool, again the agency response was generally negative. One agency noted that most candidates for employment tend to be in mid-career and that many do not have a need for this incentive. However, another agency pointed out that the current Government workforce is aging and that a paid parental leave benefit might be valuable in the future as we attempt to attract younger workers. One agency expressed the opinion of most when pointing out that challenging work and the total compensation package are the most critical factors in recruiting new employees. A smaller agency, while stating that it did not believe a specific benefit of 6 weeks of parental leave would be a particularly valuable recruitment tool, noted that current family-friendly programs already are significant in the recruitment and retention of qualified personnel. When asked whether employees or candidates for employment ever cite the lack of paid parental leave as their reason for leaving or refusing Federal employment, the agencies were unanimous in saying no.

We next asked whether agencies believe current leave entitlements are sufficient for childbirth and adoption purposes. The majority of the agencies agree that current programs are sufficient for most employees. One agency reported that in a recent employee opinion survey, the overwhelming majority of respondents (88.5 percent) indicated that their employment does indeed provide them with the freedom to meet their family and other outside demands. However, several agencies responded that a new or short-term employee generally does not have enough time in service to have accumulated sufficient paid leave to allow for taking 6 weeks off. In addition, two agencies questioned our use of the term sufficient, pointing out that most parents would like to take an extended period off for childbirth or adoption, possibly several months, but that it is not administratively feasible to leave a job vacant for so long. Overall, only two responding agencies do not believe current leave entitlements provide employees with enough time off. Several pointed out that when the benefits of the various family-friendly leave and work scheduling authorities are combined, an employee may be absent for an extended period.

We asked agencies to assess the possible impact of a new entitlement to an additional

6 weeks of paid leave for childbirth and adoption purposes. While the majority of agencies responded that an additional entitlement to paid parental leave would cause staffing hardships, some stated that with careful planning, hardships could be avoided. Smaller agencies and installations undergoing downsizing expressed concern that extended employee absences would affect the agencys ability to serve its customers and fulfill its mission requirements. More than one agency expressed the belief that entitlement to additional paid leave would result in employees being absent for a longer period than is common now. Others felt any new entitlement would be used in place of current leave without pay, resulting in no increase in total time off. To limit the total amount of absence from work, it was also suggested that any new paid parental leave be confined to leave used under the FMLA entitlement.

In addition, a major concern was how a new category of paid leave would be funded and whether agencies would absorb the cost. One of the larger agencies, which provides services to private industry on a reimbursible basis, expressed reservations about maintaining sufficient staff to fulfill those obligations. Several agencies also were concerned about morale problems that could result if employees without children absorb extra work while unable to use a new leave entitlement themselves. The basic equity of providing additional paid time off to a narrowly defined group of employees was questioned by several agencies.

When asked how a new entitlement to paid parental leave would affect an agencys competitiveness with private contractors, agencies approached the question from two different points of view. Some agencies interpreted this as a question about competing with contractors for new employees. Of those, the most common response was that while such an entitlement would make Federal employment more attractive, it would not be a deciding factor. When agencies considered how the new entitlement would affect their competitiveness in A-76 cost competitions, however, they unanimously agreed that the cost of such a benefit would jeopardize Federal employees ability to compete with private sector bids.

We then asked agencies to suggest alternative ways to provide paid parental leave to Federal employees. Several agencies feel that the Government should allow new parents to use sick leave to care for a healthy newborn or newly adopted child. Many agencies also believe donated annual leave should be available for this purpose. Several agencies support the donation of sick leave for parental purposes, but only if sick leave also could be donated to an employee for his or her own illness or that of a family member. Almost all agencies feel that advancing up to 30 days of annual leave or sick leave for childbirth or adoption purposes was a viable alternative to a separate parental leave category, but they do not agree on how or when such leave should be repaid.

Finally, we asked Federal human resources directors to rate the relative importance of 10 factors in their recruitment and retention efforts. Pay, challenging work, and opportunities for advancement were rated most highly overall. Health insurance, opportunities for training, flexible work schedules, and paid time off for personal needs were ranked in the middle, while retirement benefits, paid time off to care for a family member, and paid parental leave were ranked lowest. Agencies clearly do not see paid parental leave as a high priority in their recruitment and retention efforts.

Indeed, a major agency addressed the situation in its narrative comments, stating that it does not support a new, additional category of paid leave. Instead, this agency suggested that the Federal Government needs a leave system that is more easily administered and equitable to all. Another agency suggested that the Administration try to streamline and simplify the overlapping and confusing leave programs. Yet another agency suggested that Federal benefits programs be restructured to allow cafeteria style benefits that the employee could pick and choose from to suit his or her personal situation, rather than add another entitlement to the current system that would be valuable only to a narrowly defined group of employees.

IX. Conclusions and Recommendations

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We recognize that the needs of new parents and their children are important issues, and that the Government needs to be a supportive employer. We believe the current Federal leave system is generous by comparison to that of most non-Federal employers and that it allows employees ample opportunities to take paid time off from work for family responsibilities.

Many agencies believe the current Federal leave system is overly complicated and difficult to administer. This is the result of various changes that have been made in recent years to accommodate the needs of specific categories of employees. In addition, the Federal leave system was designed decades ago for employees who were expected to spend a full 30-year career as an employee of the Federal Government. The workers of the 21st century, however, seek employment benefits they can use immediately, since many of them are unlikely to commit to a 30-year career in the Federal Government.

OPM has embarked on a Strategic Compensation Initiative in an effort to provide agencies with more flexibility in the way employees are compensated and to simplify compensation administration. The goal of the initiative is to develop legislative recommendations to modernize Federal pay and leave systems. As part of this effort, we will continue to seek and evaluate the views of current employees, potential job candidates, and other interested parties on the importance of paid parental leave within the context of an overall Federal compensation package.

The House Report asked OPM to develop one or more alternative means for providing Federal employees with at least 6 weeks of paid parental leave in connection with the birth or adoption of a child. However, until a comprehensive study of Federal leave programs can be fully evaluated, we believe employees can meet their family responsibilities with the many flexibilities that are already available to them. In the interim, employees may use annual leave; sick leave for personal needs, family needs, and adoption purposes; advance annual and sick leave; paid or unpaid leave under the Family and Medical Leave Act; and donated annual leave under the Federal leave transfer and leave bank programs. We believe the responsibility for ensuring that employees have paid leave available for birth and adoption purposes ultimately is a shared one. The Federal Government, as an employer, should continue to provide generous leave benefits. Employees themselves should take responsibility for making appropriate use of those leave benefits. OPM will take steps to ensure that Federal agencies educate their workforce about those flexibilities.

[1] 1997 Survey of Medium and Large Private Establishments, Bureau of Labor Statistics, September 1999,

p. 25 and 1998 Survey of State and Local Governments, Bureau of Labor Statistics, December 2000, p. 21.

[2] Anita U. Hattiangadi, Bringing Up Baby, A Comparison of U.S. and European Family Leave Policies, Employment Policy Foundation, August 11, 2000.

[3] Hattiangadi, Anita U. , Paid Family Leave: At What Cost?, Employment Policy Foundation, 2001.

[4] Jordan, Laura, Research Attorney, Background Information On European And Canadian Parental Leave Laws, Report 99R-1214, Office of Legislative Research, Connecticut General Assembly, December 3, 1999.

[5]Cost Estimate, H.R. 4567, Federal Employees Paid Parental Leave Act, Congressional Budget Office, September 12, 2000.

United States Office of Personnel Management

Executive Summary

Conclusions and Recommendations

Appendix 1: HR Directors Survey on Parental Leave

U.S. Department of Labor

Families and Work Institute

Society for Human Resource Management

VII. Effect of Parental Leave on Future Parental Involvement