The family and medical leave act of 1993: Employee rights and responsibilities,employer rights and responsibilities

The Family and Medical Leave Act (FMLA) was signed into law on February 5, 1993 after approximately eight years of controversial discussion in Congress. The FMLA provides up to 12 weeks of unpaid leave for eligible employees for the birth or placement for adoption or foster care of a child, to care for a child, spouse, or parent with a serious health condition, or for the employee’s own serious health condition. The Act is intended to help individuals balance their home obligations with their work obligations. This article highlights both employee rights and responsibilities afforded by the FMLA and employer rights and responsibilities under the Act.     

The impact of minimum wages on wages,work and poverty in Nicaragua

In this paper we use an individual- and household-level panel data set to study the impact of changes in legal minimum wages on a host of labor market outcomes including: a) wages and employment, b) transitions of workers across jobs (in the covered and uncovered sectors) and employment status (unemployment and out of the labor force), and c) transitions into and out of poverty. We find that changes in the legal minimum wage affect only those workers whose initial wage (before the change in minimum wages) is close to the minimum. For example, increases in the legal minimum wage lead to significant increases in the wages and decreases in employment of private covered sector workers who have wages within 20% of the minimum wage before the change, but have no significant impact on wages in other parts of the distribution. The estimates from the employment transition equations suggest that the decrease in covered private sector employment is due to a combination of layoffs and reductions in hiring. Most workers who lose their jobs in the covered private sector as a result of higher legal minimum wages leave the labor force or go into unpaid family work; a smaller proportion find work in the public sector. We find no evidence that these workers become unemployed.Our analysis of the relationship between the minimum wage and household income finds: a) increases in legal minimum wages increase the probability that a poor worker's family will move out of poverty, and b) increases in legal minimum wages are more likely to reduce the incidence of poverty and improve the transition from poor to non-poor if they impact the head of the household rather than the non-head; this is because the head of the household is less likely than a non-head to lose his/her covered sector employment due to a minimum wage increase and because those heads that do lose covered sector employment are more likely to go to another paying job than are non-heads (who are more likely to go into unpaid family work or leave the labor force).     

The Sorting of Female Careers after First Birth: A Competing Risks Analysis of Maternity Leave Duration

A number of contributions have found evidence that motherhood is a critical life event for women's employment careers. This study presents a detailed analysis for the duration of maternity leave in which young mothers can make a transition into different types of employment, unemployment as well as the next birth. We provide a comprehensive picture of the sorting mechanisms that lead to the differentiation of women's employment careers after birth. Our empirical evidence is derived from large‐linked administrative individual labour market data from Germany for a period of three decades. We obtain unprecedented insights into how women's skills, the quality of the previous job match, firm level characteristics, labour market conditions and leave legislation are related to the length of maternity duration. Expansionary leave policies, e.g. are found to be a key factor for the rising share of women who have their second child out of inactivity.     

Duration of maternity leave in Germany: A case study of nonparametric hazard models and penalized splines

The paper investigates maternity leave behavior in West Germany for females being employed between 1995 and 2006 using data from the German Socio Economic Panel. The observational study focuses on the investigation of individual and family-related covariate effects on the duration of maternity leave following first or second childbirth, respectively. Dynamic duration time models are used in which covariate effects are allowed to vary smoothly with duration of being in maternity leave. The intention of the paper is to demonstrate with state of the art models how effects of covariables change over time and to analyse substantial differences between maternity leaves following first and second childbirth. Particularly the personal income of mothers and the educational attainment influence the decision when to return into employment. The leave period following second birth is influenced by the mothers' attachment to the labour market between their two maternity leave periods. As fitting routine penalized spline smoothing effects is employed using available software in R (http://www.r-project.org).     

Minimum wages,wages and employment in various sectors in Honduras

This paper contributes to our understanding of the impact of minimum wages on labor markets of developing countries, where there are often multiple minimum wages and compliance is weak. We examine how changes in more than 22 minimum wages over 1990–2004 affect employment, unemployment and average wages of workers in different sectors, defined by coverage under the legislation. The evidence suggests that minimum wages are effectively enforced only in medium and large-scale firms, where a 1% increase in the minimum wage leads to an increase of 0.29% in the average wage and a relatively large reduction in employment of ? 0.46%. We find that public sector wages emulate minimum wage trends but the higher cost of labor does not reduce employment there. There are no discernable effects of minimum wages on the wages of workers in small-firms or the self-employed; yet, higher minimum wages may create more unemployment. We conclude that (even under our upper bound estimate of the effect on the wages of workers) the total earnings of workers in the large-firm covered sector fall with higher minimum wages in Honduras, which warrants a policy dialogue on the structure and level of minimum wages.     

Employer Penalties for Failure to Provide Individual Employee Notification Under the Family and Medical Leave Act: “Clarifications” Following Ragsdale v. Wolverine Worldwide, Inc.

This article examines the Supreme Court's ruling in Ragsdale v. Wolverine Worldwide, Inc. (2002) and considers its implications for employer and employee rights and responsibilities relative to implementing the FMLA policies. We provide an overview of the pre-decision regulatory environment including the general leave provisions of the FMLA and DOL's regulations requiring employer notification of leave designated as FMLA leave. We also identify those provisions that the decision did not alter and provide a broader consideration of the issues and implication of this decision for employers and employees.     

The effects of multiple minimum wages throughout the labor market: The case of Costa Rica

This paper investigates the effects of legal minimum wages on employment and hours worked among workers covered by minimum wage legislation as well as those for whom it does not apply (the uncovered sector) in Costa Rica. This country's large uncovered sector and complex minimum wage policy, which has for decades set numerous wages throughout the wage distribution, provide a stimulating counterpoint to the U.S. framework for the analysis of the impact of minimum wages. Using 1988–2000 micro data, we find that a 10% increase in minimum wages lowers employment in the covered sector by 1.09% and decreases the average number of hours worked of those who remain in the covered sector by about 0.6%. We do not find a significant impact on hours worked in the uncovered sector. Finally, we show that despite the wide range of minimum wages, the largest impact on the employment of covered sector workers is in the lower half of the skill distribution.     

Effects of Care Leave and Family Social Policy: Spotlight on the United States

Consistent with Pope Francis's efforts to eradicate social exclusion, most countries in the world have already adopted care leave policies in an effort to reduce the conflict between being an employee and being a caregiver. Care leave policies allow workers time off for family or for self‐care. Historically, care leave policies such as maternity leave are viewed as an employee benefit akin to short‐term disability leave, providing job‐protected time off for new mothers. This study reviews the literature of the short‐ and long‐run economic and societal effects of care leave policies globally, with a specific focus on care leave policies in the United States. Care leave produces positive labor market and health outcomes, including increases in leave taking, improvement in replacement wages, improvements to profitability and employee morale, increases in female workforce participation and continuity, increases in birth weight, and decreases in infant mortality. Despite positive effects, labor market inequalities such as decreases in female labor market participation rates, gender wage gaps, and occupational segregation are often promoted by care leave policies. The conflicted findings in care leave research muddle the anticipated effects of paid care leave but allow room for alternative policy recommendations.     

Remuneration practice in a wages council sector: some empirical observations in hotels

The Wages Act 1986 aimed to change the substantive and procedural rules of remuneration practice in order to increase labour market flexibility. Here the findings of a subsequent study on wages and employment conditions are presented and assessed in relation to some of the potential effects of the 1986 legislation     

What Do Wages Add to the Health‐Employment Nexus? Evidence from Older European Workers

The role of wages in the health‐employment nexus can be important for designing employment policies aimed at older workers with health limitations. We, therefore, estimate the direct effect of health on employment and hours worked and its indirect effect that is mediated through wages using individual‐level panel data from SHARE. The endogeneity of self‐reported health is controlled for by instrumenting it with severe health conditions in a correlated random effects model. For men, we find that the direct effects of health deterioration, as measured by a reduction in health from the 75th to the 50th percentile of the health distribution, are about a 20% point lower employment probability and about 171 fewer hours worked per year. The indirect health effects through wages work in the opposite directions as health positively affects wages and wages negatively affect employment and hours worked. The total effects of this health deterioration amount to a 12% point lower employment probability and 95 fewer hours worked per year. In particular our finding of a large direct health effect on employment suggests an instrumental role for policy aimed at accommodating workers with health limitations to keep them employed at older ages.     

Women's employment transitions around child bearing

Women's increasing participation in the labor force since the 1950s demands that knowledge about their labor supply needs to keep pace with the changing world. One important change has occurred among mothers of small children, they are increasingly working for pay in successive generations, as the break in their employment has become increasingly shorter. Legislation was enacted in the UK to outlaw unequal pay and discrimination in employment on the basis of gender, while statutory maternity leave was introduced in 1976 and extended in 1986. The proportion of mothers taking maternity leave has since increased, as has full-time employment among mothers. The authors examine the transitions into and out of paid work which women make after childbirth, helping to determine whether recent generations of mothers have benefitted from the policy changes, whether all have benefitted equally, and whether any effects persist beyond the period around the first childbirth. Study data are drawn from the fifth sweep of the National Child Development Study (NCDS) 1958 birth cohort at age 33. The experiences of mothers in the 1958 generation suggests that women have begun to benefit from the equal opportunities provisions enacted in Britain during the 1970s. The age of the youngest child is the most important determinant of women's participation over the preschool years, and relatively better educated women have the highest degree of continuity in employment across childbirth.     

Labour contract regulations and workers' wellbeing: International longitudinal evidence

All industrialized countries have employment protection legislation (EPL) for permanent workers and restrictions on the use of temporary employment (RTE). The (ambiguous) effects of these on the levels of employment and unemployment have been extensively studied, but nothing is known empirically about their wellbeing implications. Using longitudinal data from the European Community Household Panel, the author conducts the first study of the link between both EPL and RTE and workers' wellbeing. The results provide evidence that both permanent and temporary employees gain from reforms that ease restrictions on temporary employment but leave firing costs for permanent workers unchanged. This finding contrasts with common claims found in the political economy literature.     

The distribution of changes in manufacturing employment and the impact of the minimum wage

That employment for workers in durable goods industries is more sensitive to the pace of economic activity than for non-durable goods employees is not a surprising result. What is noteworthy about the conclusions of this study, however, is the manner in which increases in the minimum wage have altered the distribution of employment and sensitivity to short-run changes in employment of production workers in manufacturing industries. By focusing on the distribution of employment and how that distribution changes over the cycle, estimates of some aspects of the impact of the minimum wage that have not previously been analyzed have been developed.The evidence indicates that increases in the minimum wage over the period 1947–1975 have had a significant impact on employment patterns. Minimum wage legislation has had the effect of decreasing the share of projected employment and increasing vulnerability to cyclical changes in employment for the group of workers most ‘marginal’ to the work force low-wage industry employees. Hence, as a result of increased minimum wages, low-wage industry employees are able to obtain fewer jobs during periods of normal employment growth and their jobs are less secure in the face of short-run employment variations.Minimum wage legislation has undoubtedly resulted in higher wages for some of the relatively-low-productivity workers who were able to obtain employment than these workers would have received in its absence. The cost in terms of lost employment opportunities and cyclical vulnerability of jobs, however, has apparently been borne most heavily by low-wage industry employees. The primary beneficiaries of the shifts in the pattern of employment shares occasioned by minimum wage increases were high-wage industry workers, particularly in the ordnance, food, tobacco, and petroleum industries.     

The Living Wage and the Effects of Real Minimum Wages on Part-Time and Teen Employment

In many parts of the country, campaigns are being carried out and laws are being passed whose aim is to establish, among other things, standards for contracting out public services and setting acceptable living wages that will provide employees decent living standards. Living wages have economic consequences on employment of different groups of workers such as part-time, teenagers, and women and detailed data are needed to measure those effects. In the absence of such data and because of the strong link between living and minimum wages, this study tests the potential impact of living wages by using the model of minimum wages. The study documents a negative and significant relationship between real minimum wages and the employment levels of the various groups. The study also recommends better training and education, free competition in the labor market, and fair compensation based on the workers productivity as justifiable means to achieve a sustainable level of living wages without causing an unemployment repercussion.     

British employers and the Social Chapter: some survey evidence

This note reports the results of a survey of firms operating in Britain concerning the impact on their costs and operations of the Social Action Programme. We find that the realised and anticipated adverse impacts of the legislation are rather limited, although both do appear to be greater for firms which are relatively large, skill intensive, and which have a substantial amount of trade with other EU countries. In particular, the survey results provide little evidence to suggest that the imposition of a minimum wage of £3.50 per hour would have a substantial adverse impact on employment. Evidence does, however, suggest that firms which pay relatively low wages are likely to be affected more than others by the legislation.     

A Critique of the Orthodox Approach to Indonesia's Growth and Employment Problems and Post Keynesian Alternatives

Indonesia continues to bear the scars of the 1997 financial crisis, with the highest open unemployment rate in Southeast Asia. The orthodox interpretation is that the post‐crisis era is typified by overly generous labor legislation granting higher minimum wages and other provisions; the rise in real wages adversely impacted the investment climate and employment growth. However, detailed sectoral analysis reveals very little evidence of a wage‐driven profit squeeze. This article contends that Indonesia's current unemployment woes are best understood as the reflection of a demand‐constrained economy, where important sectors are operating at around 70 percent of their capacity. It, thus, outlines an alternative macroeconomic policy framework in the Post Keynesian tradition.     

Payroll taxes,wages and employment: Identification through policy changes

This paper investigates the effect of changes in payroll taxes on wages and employment in Argentina. The analysis, based on administrative data, focuses on the impact of a series of major changes in payroll taxes which varied across geographical areas. This setup offers two main advantages over previous studies. First, using longitudinal data, the variation in tax rates across space and time provides a plausible source of identification of their effects on employment and wages. Second, the use of legal tax rates for each area at each point in time provides a remedy for the measurement error bias raised by the use of empirical rates constructed from observed tax and wage bills. Once this bias is accounted for, the results indicate that changes in payroll tax rates are only partially shifted onto wages, and they point to the absence of any significant effect on employment.     

The government wage bill and private activity

We estimate the macroeconomic effects of public wage expenditures in U.S. data by identifying shocks to public employment and public wages using sign restrictions. We find that public employment shocks are mildly expansionary at the federal level and strongly expansionary at the state and local level by crowding in private consumption and increasing labor force participation and private sector employment. Similarly, state and local government wage shocks lead to increases in consumption and output, while shocks to federal government wages induce significant contractionary effects. In a stylized DSGE model we show that the degree of complementarity between public and private goods in the consumption bundle is key for explaining the observed heterogeneity.     

Examining policy configurations as conditions for long-term unemployment and non-standard employment in OECD countries using fuzzy-set analysis

This paper investigates how particular configurations of institutional conditions cause high rate of long-term unemployment and non-standard employment rate for 18 OECD countries during the period of 2001–2008. The paper aims to investigate how employment protection legislation (EPL), unemployment benefit and statutory minimum wages are associated with long-term unemployment and non-standard employment. Using the fuzzy-set analysis, the paper examines how the combination of policies matters in causing long-term unemployment and/or non-standard employment. The result suggests that a low level of statutory minimum wage can lead to high levels of non-standard employment in combination with either strict EPL for permanent workers or weak EPLs for temporary workers. The long-term unemployment rate is suggested to be high when there is strict EPL for temporary workers in combination with high levels of statutory minimum wage. This paper highlights the importance of examining multiple policies as configuration.     

BIG‐BOX RETAILERS,RETAIL EMPLOYMENT,AND WAGES IN THE US

This paper examines the dynamic interrelationship between the presence of big‐box retailers and retail employment and wages in the United States at county level for 1986–2005 using panel vector autoregressions (Panel VAR). The Panel VAR approach addresses endogenous interactions among the variables in the system. In other words, this approach takes into account the fact that the presence of big‐box retailers can have an impact on retail employment and wages and at the same time, retail employment and wages can influence the presence of big‐box retailers. Results indicate that the presence of big‐box retailers has a positive effect on employment but a negative effect on wages. The effect on wages is relatively greater and is more prolonged than the effect on employment. Both employment and wages have an instant (first year) positive effect on the presence of big‐box retailers, which implies that big‐box stores are located in areas where the economy is growing.