Tucked into the new tax law is a provision that offers companies atax credit if they provide paid family and medical leave for lower-wageworkers.

Many people support a national strategy for paid parental and familyleave, especially for workers who are not in management and areless likely to get that benefit on the job. But consultants,scholars and consumer advocates alike say the new tax credit willencourage few companies to take the plunge.

The tax credit, proposed by Sen. Deb Fischer (R-Neb.), is available tocompanies that offer at least two weeks of paid family or medicalleave annually to workers, but two key criteria must be met. Theworkers must earn less than $72,000 a year and the leave must coverat least 50 percent of their wages.

If contributing at the half-wage level, a company receives a taxcredit equal to 12.5 percent of the amount it pays to the worker.The tax credit will increase on a sliding scale if the company paysmore than 50 percent of wages. It could go up to a maximum creditof 25 percent of the amount the employer paid for up to 12 weeks ofleave.

Payments to full- and part-time workers taking family leavewho’ve been employed for at least a year would be eligible for theemployer’s tax break. But the program, which is designed to testwhether this approach works well, is set to last just two years,ending after 2019.

Aparna Mathur, a resident scholar in economic policy studies atthe American Enterprise Institute, says the new tax creditsidesteps a pitfall for Republicans. They are wary of anylegislation mandating that employers provide paid leave. The taxcredit also is appropriately aimed at lower-wage workers who aremost likely to lack access to paid leave, said Mathur, whoco-authored a recent report on paid family leave.

But it’s not a big enticement.

“Providing this benefit is a huge cost for employers,” Mathursaid. “It’s unlikely that any new companies will jump on board justbecause they have a 12.5 to 25 percent offset.”

That view is shared by Vicki Shabo, vice president for workplacepolicies and strategies at the National Partnership for Women &Families, an advocacy group, who said it will primarily benefitworkers at companies already offering paid family leave. The newtax credit “just perpetuates the boss lottery,” she added.

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Kaiser Health News is a nonprofit news servicecovering health issues. It is an editorially independent program ofthe Kaiser Family Foundation that is not affiliated with KaiserPermanente.

Heather Whaling said her 22-person public relations companyprobably qualifies for the new tax credit, but she doesn’t thinkit’s the right approach. Whaling, the president of GebenCommunication in Columbus, Ohio, already offers paid leave. Thecompany provides up to 10 weeks of paid leave at full pay for newparents. Four employees have taken leave, and by divvying up theirwork to other team members and hiring freelancers they’ve been ableto get by.

“It is an expense, but if you plan and budget carefully it’s notcost-prohibitive,” she said.

The tax credit isn’t big enough to provide a strong incentive toprovide paid leave, said Whaling, 37. Besides, “having access topaid family leave shouldn’t be luck of the draw, it should beavailable to every employee in the country.”

Still, the tax credit may be appealing to companies that havebeen considering adding a paid family and medical leave benefit,said Rich Fuerstenberg, a senior partner at benefits consultantMercer.

By defraying some of the cost, the tax credit could help “tipthem over” into offering paid leave, he said. But “I’m noteven sure I’d call it the icing on the cake,” Fuerstenberg said.“It’s like the cherry on the icing.”

Only 15 percent of private-sector and state and local governmentworkers had access to paid family and medical leave in 2017,according to the Bureau of Labor Statistics’ National Compensation Survey. Eighty-eight percent had accessto unpaid leave, however.

Under the federal Family andMedical Leave Act, employers with 50 or more workers generallymust allow eligible employees to take unpaid leave for up to 12weeks annually for specified reasons. These include the birth oradoption of a child, caring for your own or a family member’sserious health condition, or leave for military caregiving ordeployment. An individual’s job is protected during suchleaves.

A tax credit that can be claimed at the end of the year isunlikely to encourage small businesses to offer paid family andmedical leave, said Erik Rettig, an expert on family leave policiesat the Small Business Majority, which advocates for those firms onnational policy.

“It isn’t going to help the family business that has to absorbthe costs of this employee while they’re gone,” Rettig said.

A better solution, according to Shabo and others, is to providea paid family leave benefit that’s funded by employer and/oremployee payroll contributions. Sen. Kirsten Gillibrand (D-N.Y.)and Rep. Rosa DeLauro (D-Conn.) last year reintroduced suchlegislation. Their bill would guarantee workers, includingthose who are self-employed, up to 12 weeks of family and medicalleave with as much as two-thirds of their pay.

A handful of mostly Democratic states — including California,New Jersey, Rhode Island and New York — have similar laws in place,and a program in the District of Columbia and Washington state willbegin in 2020.

“We know from states that this approach works for both employeesand their bosses,” Shabo said.

Kaiser Health News is a nonprofit news servicecovering health issues. It is an editorially independent program ofthe Kaiser Family Foundation that is not affiliated with KaiserPermanente.