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Welcome to the Paid Family and Medical Leave Cost Calculator developed by PL+US!
paidleave.us
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View an instructional video about this tool and policy best practices in "Advanced Family Leave Workshop: Cost Benefit Analysis" at
paidleave.us/workshop
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Before we dig in to calculations below, there are a few caveats. Projecting the financial impact of a paid family and medical leave policy at your organization is not a science. The connection between productivity and employees' personal lives is hard to measure. And unless your organization is quite large, it can be hard to predict how frequently employees will need to take this leave. That said, we've found that looking at the costs and savings as concretely as possible really helps build your confidence and prepares your workplace to successfully implement a paid leave policy. We'd like to thank the folks at USPaidLeave.org, whose calculator we referenced in developing this tool.
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>>> To input your own numbers, please make your own copy of this document: File > Make a copy or File > Download as > Microsoft Excel. <<<
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We'll begin by identifying costs. You will fill in the boxes in dark red. Some will autofill based on what you input into Worksheets 1 and 2.
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Direct Cost Calculations
Guidance and Notes
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Size of Workforce1
If you don't know this figure, you can estimate.
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Annual Revenue$1
Or sales, or whatever key figure for impact you want to use.
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Weeks of Leave Offered:Now, hone in on how much leave you want to offer. PL+US advocates a minimum of 12 weeks of parental
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Parental12
leave and 6 weeks of caregiving and personal medical leave. However, you can certainly extend a more
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Caregiving6
generous leave than this, and we encourage you to. Many industrialized nations offer 6 months or more of
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Personal Medical6
parental leave. Medical experts recommend 6-9 months of leave for optimal maternal and child wellness.
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Anticipated Leaves Per Year:
We recommend three sources to use in projecting your frequency of leaves. First, look back at absence
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Parental0
records. This is helpful but limited if it only represents birth moms and people who need personal medical
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Caregiving0
leave. Second, take a look at past enrollments of child dependents in medical insurance over time.
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Personal Medical0
Third, you can compare your employee demographics to government statistics:
source 1
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source 2
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Anticipated Weeks of Leave Per Year0
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Average Weekly Wage$900
It's hard to predict who on your staff will need leave, so let's use an average wage.
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Wage Replacement Rate100%
Next you need to know what percentage of regular pay you'll be covering for your employees on leave.
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Decide on your goal. Let's say it's 100%. Do you currently enroll your employees in group short-term
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disability insurance? If so, represent your wage replacement rate as the % needed to "top them up" to
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100%. Do you operate in a state with paid family leave legislation in effect? If so, again, you can choose to
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"top up" mandated wages. Most state programs are funded by automatic payroll taxes on all employees.
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Weekly Non-Wage Costs (Benefits)$386
Costs like medical benefits, social security taxes, workers comp insurance, etc. According to the BLS,
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private businesses spend about 30% of their employee costs on non-wage benefits:
source 3
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Weekly Cost of the Employee on Leave$1,286
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Labor Replacement Rate0%
Temporary and overtime workers will be your biggest incremental cost from implementing a paid leave.
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You can use Worksheet 1 (see below) to put together an estimate.
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Weekly Cost of a Temp Employee$1,286
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Indirect Cost Calculations
Guidance and Notes
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Productivity Loss as % of Payroll6%
This represents the time that supervisors have to spend planning and managing around absences; the
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disruption that results from all the transitions and change; and an administrator's time to process the leaves.
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A 2014 study of organizations of 500+ employees by the Society for Human Resource Management
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found the average total cost of productivity loss from paid time off was 6.2% of payroll:
source 4
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Weekly Productivity Loss + Administration Costs
$77.14
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Total Annual Costs Before Savings$0
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Next we're going to identify savings you can achieve from a paid family and medical leave policy. Some fields autofill based on earlier cells or Worksheets.
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Savings
Guidance and Notes
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% of Wages Saved0%
If you already enroll your employees in group short-term disability insurance, operate in a state with
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mandated paid family leave, or plan to pay your employees on leave less than 100% of their wages, this
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is the percentage of wages saved due to the leaves.
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Cost of a Hire$0.00
Use Worksheet 2 (below) to calculate this figure, or use the benchmark figure - $4,000:
source 5
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Employees Retained by Program0.00
Make a conservative estimate, based on your # of anticipated leaves, of how many of those employees
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might have left if not for the program. If your organization is small, this may be less than one.
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Revenue Per Employee$1
Calculated from your input above. This represents the tangible impact of each employee on your results.
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Individual Productivity Gain Due to Leave1%
Make a conservative estimate of increased productivity as a result of taking needed time off. Think about
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the negative impact of presenteeism, or being on the job but not fully functioning:
source 6
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Total Annual Savings$0.00
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Results
Guidance and Notes
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Annual Total Costs$0
Annual Costs minus Annual Savings
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Annual Costs Per Employee$0
This figure is helpful for comparing with the "per head" costs of other employee programs.
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