Improving Labor Outcomes among People with Mild or Moderate Mental Illness through Law and Policy Reform

Abstract

Mild and moderate mental illnesses can hinder labor force participation, lead to work interruptions, and hamper earning potential. Targeted interventions have proven effective at addressing these problems. But their potential depends on labor protections that enable people to take advantage of these interventions while keeping jobs and income.

I. Introduction

Mental illnesses can disrupt the ability of workers to be productive members of a workplace. Labor Force Participation rates for people with mild or moderate mental health conditions, which account for 7.8 to 14.8 percent of the U.S. population, are 13 to 29 percent points lower than those without such conditions.¹ People with mental illness also have more interruptions in their work while in the labor force. According to National Health Interview Survey data from 2010 to 2017, people with depression are more than 10 percent more likely to have missed workdays because of illness, and they are at higher risk of reporting 15 or more lost workdays than are those without depression (Table 1). Finally, people with mental illness earn less on average than those who do not have mental illness.²

Table 1 Lost Work Days and Bed Days in Past 12 Months by Depression Status in 2010–2017, Ages 19-61.

Note: The data source here is the National Health Interview Survey, 2010–2017.

Targeted interventions aimed at the workplace are effective in helping people with mental illness stay engaged and productive at work.³ But their potential depends on the availability of workplace protections that allow people to use these services while retaining jobs and income. Two federal laws — the Family and Medical Leave Act (FMLA) and the Americans with Disabilities Act (ADA) — and a set of recent state initiatives provide some of these protections. Here, we review these policies from the perspective of improving connections to the labor market for people with mental illnesses. We based our analysis on a review of studies identified in PubMed, Cochrane, and Google Scholar (i.e., randomized clinical trials, meta-analyses, systematic reviews, and observational studies) published between January 2000 and December 2021, as well as a Westlaw and Internet searches.

II. Discussion

A. Mild to Moderate Mental Illness and Workplace Needs

Employees with mild or moderate mental illness suffer from higher rates of absenteeism (i.e., not going to work due to illness), presenteeism (i.e., going to work but not able to function at full capacity), and long-term disability than otherwise similar people without a mental illness.⁴ These work disruptions accentuate the need for policies that help employees receive supports when they are at risk of suffering adverse employment outcomes.

Mild to moderate mental illnesses disrupt labor market activities. Employees with mild depression work 14 hours less per month than healthy employees, and depression is associated with 2.5 times the number of missed work days as compared to non-depressed employees.⁵ These studies show that these conditions, especially if untreated, result in work instability, stagnant social mobility, and lost productivity.⁶ They also reveal that mental illness is an important risk factor for absenteeism.⁷

These illnesses are also sources of diminished performance at work.⁸ Depression inhibits performance of physical job tasks around 20 percent of the time and performance of time management, mental-interpersonal tasks, and output tasks at least 35 percent of the time.⁹ And individuals with mental illnesses are more likely to experience decreased daily functioning, understanding, and communication ability than individuals without such conditions.¹⁰

A range of views persists about the most effective interventions for employees with common forms of mental illness. Some focus narrowly on clinical dimensions of addressing mental illnesses. For example, individuals with mild mental illness can benefit from a diversity of evidence-based treatment modalities, including but not restricted to psychotherapy and psychopharmacology.¹¹ By contrast, a large and still growing body of work has also shown the benefits of combining work-focused interventions (e.g., job coaching, disability accommodations) with clinical treatments.¹² For example, randomized controlled trials investigating different forms of work-focused interventions (i.e., individual job support, access to Employee Assistance Programs) have resulted in improvements in symptomology, productivity, absenteeism, and quality of life.¹³ This more sophisticated approach to caring for employees with moderate or mental illness has also appeared preferable to clinical interventions alone. It has also proved effective within several weeks of initiation (e.g., 6 weeks in the context of the Birney et al. (2016) study).

B. Federal Labor Protections and the Americans with Disabilities Act

Two federal laws offer protections for individuals with mild or moderate mental illness who require time and flexibility to care for their conditions: the FMLA and the ADA. But neither ensures work stability among this group of people.

1. THE FAMILY AND MEDICAL LEAVE ACT

Under the FMLA, covered employees are entitled either to 12 weeks of unpaid parental, caregiving, and medical leave in a single year, or to 26 unpaid weeks of leave per year to care for a military service member who is sick or injured.¹⁴ Nevertheless, these benefits are only available in some cases. Covered employees include only those who work for private sector employers with at least 50 employees within a 75-mile radius, public agencies, or elementary or high schools, excluding nearly 30 percent of the labor force who work for firms with fewer than 50 employees.¹⁵ Furthermore, the FMLA’s protections apply only when covered employees have worked for at least 12 months for their employer and have amassed at least 1,250 service hours for their employer during 12 months before their leave.¹⁶

These conditions are restrictive.¹⁷ Only 59 percent of workers are in jobs that meet the conditions necessary to be eligible for coverage under the FMLA.¹⁸ Furthermore, the types of jobs that employees with mental illness have increasingly occupied in recent years — including office work, construction, and food preparation — often fall outside the reach of the FMLA.¹⁹ As a result, the FMLA offers relatively weak protections and only protects a relatively smaller proportion of employees with mild or mental illness.

2. THE AMERICANS WITH DISABILITIES ACT

Under Title I of the ADA, employees with physical and mental disabilities are entitled to “reasonable accommodations” that allow them to perform the “essential functions” of their usual work duties.²⁰ The Equal Employment Opportunity Commission (EEOC) has stated that time away from work to undergo psychotherapy and other mental health care should be available to employees with mental illness.²¹ The EEOC has also offered guidance establishing that a “job coach to assist in the training of a qualified individual with a disability” is a reasonable accommodation protected under Title I.²² In this way, the ADA provides ways that employees with mild or moderate mental illnesses can access evidence-based interventions like work-focused cognitive-behavioral therapy (CBT) and job coaching, which are effective at helping individuals stay connected with work.²³ Note, however, that Title I “does not require an employer to provide paid leave beyond what it provides as part of its paid leave policy.”²⁴

Title I protections also come with important limitations. Although work-focused interventions are theoretically available as reasonable accommodations, evidence suggests that few employees with mental illness benefit from them. One reason may be that enforcement actions have proven too weak over time to hold employers accountable to their obligations under Title I.²⁵ A second reason may be that employers often claim that the provision of reasonable accommodations causes “undue hardship.”²⁶ This legal term of art refers to the exception under Title I to provide reasonable accommodations that arise when such accommodations would cause “significant difficulty or expense.”²⁷ A third reason may relate to reluctance of engaging in treatment because of the stigma caused by mental illness.²⁸ Employees may want to hide from their employers that they are ill because of fear of loss of employment, shame, and distrust of leadership. A final reason may have to do with external stigma. For instance, evidence shows that, to non-disabled employees, the provision of reasonable accommodations to people with disabilities can appear unfair.²⁹

On balance, the ADA’s protection of reasonable accommodations for employees with mild or moderate mental illness has the potential to be useful with respect to supporting people with mental illnesses in the workplace. But it has not been of great help to date and, even if effectively enforced, by itself would likely result in modest improvements.

C. Work Support Benefits at the State Level

States have enacted laws that enable employees with mild and moderate mental illness to take time off work to address their conditions. These laws, passed in a piecemeal fashion over the course of the past decades, have come in three general varieties: (1) paid sick leave; (2) medical leave; (3) and mandated short-term disability. Below, we offer a description of each category of benefits, delineating how each category differs from the others (Table 2).

Table 2 Characteristics of State-Level Labor Protections.

1. PAID SICK LEAVE

At least 16 states and Washington, DC have enacted paid sick leave laws. Connecticut was the first state to enact such a law in 2011, and Colorado most recently enacted its paid sick leave program in 2020. Unlike paid medical leave and short-term disability, the availability of paid sick leave is not contingent on employee out-of-pocket contributions.³⁰ These laws set out certain eligibility criteria that can vary from state to state, but which are by and large permissive.

If employees have accrued sufficient hours and have a medical need within the scope of the law, they are entitled to take leave. Restrictions appear to apply in only two narrow circumstances: (1) when the employer is small and thus carved out of the paid sick regime or (2) when the employee has not worked for their employer long enough. For example, New York-based employers that have fewer than five employees only have to offer 40 hours of unpaid leave, Nevada excludes employers with fewer than 50 employees from the scope of its paid sick leave law, and Washington-based employers can prohibit employees from using paid sick leave up until they have worked for 90 days.³¹

Paid sick leave is a valuable policy tool for employees who require sporadic hours or days off work to care for their conditions. Massachusetts allows employees to take as little as one hour off work to receive health or mental health care.³² Washington State requires employers to have unused paid sick hours carry over from one year to the next, providing employees extra flexibility if they suddenly need a longer period off work.³³ Oregon usually does not require employees to have a doctor’s note when they go on leave; employees’ use of time off work is at their discretion unless they take more than three consecutive days off work.³⁴ Maryland prohibits employers from taking adverse action against employees for using paid sick leave hours and provides a right of action to employees if such an incident does occur.³⁵ And these entitlements mostly overlap from one state to another. Although paid sick leave is usually not connected to any clinical-workplace interventions, and it may not provide enough days for some employees with mild or moderate mental illness to care for their conditions comprehensively, it can still be useful for a segment of at-risk employees.

2. PAID MEDICAL LEAVE

Paid medical leave programs allow employees with health problems to take time off work while keeping a percentage of their weekly pay.³⁶ They appear to be a promising policy remedy for individuals with mild or moderate mental illness. First, unlike the FMLA policy, paid medical leave offers financial protections when circumstances of an individual’s illness and care demand that leave be taken. Second, it typically affords individuals enough time off work (i.e., usually several weeks) to initiate more intensive treatment that can be important, if not necessary, for continuity in the workplace and labor force.

At least seven states and Washington, DC have passed medical leave laws. States that have opted for paid medical leave include Washington, DC, Colorado, Connecticut, Massachusetts, Oregon, and Washington State, whereas those that have opted for unpaid programs include California and Rhode Island. States fund their paid medical leave programs using one of three funding mechanisms: contributions from employees, contributions from employers, or a mix of both. For example, the Massachusetts Paid Family and Medical Leave Program assesses a tax of no more than 0.75 percent on employee wages and sometimes on employers, depending on how much each party contributes.³⁷ By contrast, Oregon’s program depends entirely on employee contributions, where employees must contribute up to 1 percent of their taxable income to the program.³⁸

In general, employees seeking medical leave must suffer from a “serious medical condition.”³⁹ Although most states have failed to offer detailed guidance on what exactly qualifies as a serious medical condition, at least one (i.e., Washington State) has borrowed from similar language contained in the FMLA. Under the FMLA, a “serious medical condition” does not distinguish between physical and mental illness, and it covers conditions that involve inpatient health care or “continuing treatment by a health care provider.”⁴⁰ Under this definition, evidence suggests that employees with moderate mental illnesses (e.g., major depression, anxiety disorders) where recovery or treatment require absences from work would qualify for paid medical leave in many, if not most, cases.⁴¹ Ultimately, state agencies are responsible for determining whether applicants suffer from a qualified “serious medical condition” and for deciding paid medical leave applications. Employees are also responsible for putting their employers on notice before submitting applications.

Paid medical leave laws also generally apply to most employers. The Massachusetts law covers all employers except a small segment, including employers in the railroad industry and religious organizations.⁴² The same goes in Washington State where the state’s paid medical leave program covers nearly all employers with just a few exceptions (e.g., federal employers, businesses situated on tribal land).⁴³ States, other than Washington, DC, allow employees to take at least 12 weeks off work.⁴⁴ The monetary benefits associated with medical leave depend on the employees’ average weekly wage rates.

Because of how new most medical leave programs are in the United States, evidence on their impacts is limited. The research that does exist has focused on the family leave program in California, which is like the medical leave program in that it offers partial wage replacements to employees who need time off work to bond with newborns or care for ill family members. That research offers empirical clues about the benefits of such programs. California’s family leave program has led to increased job retention (i.e., 83 percent compared to 74 percent in the control group) and job satisfaction (i.e., 97 percent compared to 73 percent in the control group) among workers with low-wage jobs.⁴⁵ Employers have also benefited from it in terms of productivity, profitability, retention, and employee morale.⁴⁶

3. MANDATED SHORT-TERM DISABILITY

At least five states have passed laws that require employers to provide temporary disability insurance to employees who require time off from work due to physical or mental illness: California, Hawaii, New Jersey, New York, and Rhode Island. The funding formulas for mandated short-term disability programs are straightforward. Three states — California, New Jersey, and Rhode Island — administer their own programs.⁴⁷ California and Rhode Island have chosen to deduct from employee wages to finance short-term disability benefits, and New Jersey asks employees and employers in the state to contribute to the cost of the program. The two other states — Hawaii and New York — require that employers purchase short-term disability insurance on their own.⁴⁸

To be eligible for short-term disability benefits, employees must meet relatively strict criteria.⁴⁹ First, they need to be unable to perform regular work. Second, they need to be under the active care of a doctor. Third, they must file a claim within a specified period after their disability begins. And fourth, in states where employees are required to contribute to short-term disability programs (e.g., California, Rhode Island), employees must have earned a certain level of wages in the state. As is the case for paid medical leave, state agencies are responsible for adjudicating claims, and employees are expected to put their employers on notice before filing a claim.

States that offer short-term disability do not exclude many employers from the scope of their programs. For example, New Jersey’s Temporary Disability Benefits Law covers all employers except specific government entities.⁵⁰ Hawaii also exempts only a small fraction of employers from its program (e.g., federal employers, certain domestic services).⁵¹ Employees can take considerable time off work if they meet the criteria for short-term disability benefits. In Hawaii, New Jersey, and New York, employees can take up to 26 weeks off, whereas leave in Rhode Island and California can last up to 30 and 52 weeks respectively. The allotted time off is generally greater than under paid sick leave and medical leave, although the associated monetary benefits differ from state to state. In New York, the maximum amount that an employee can receive while on disability leave is $170 per week, while for high-wage earners in California, the weekly benefits amount can go up to $1,300 per week.⁵²

Short-term disability benefits programs have had a mixed history of integrating evidence-based interventions for people with mental illness, including return-to-work (RTW) programs (e.g., collaborative care model). For example, in a review of randomized controlled trials, Nigatu et al. (2016) found that RTW programs have not consistently increased the rate at which employees come back to work after disability-related leave.⁵³ But the authors found that employees who did return to work experienced fewer sick leave days as compared to employees who did not undergo an RTW program.

III. Conclusion

Employees with mild or moderate mental illness require multifaceted supports to stay connected with work, including access to health and mental health care, health insurance, and in- workplace resources.⁵⁴ The FMLA and the ADA enable access to these supports. The availability of reasonable accommodations under Title I of the ADA is a crucial remedy that should act as the gateway toward interventions like job-focused CBT and job coaching, both of which have proven effective at improving employment outcomes among individuals with mental illness.⁵⁵ Unfortunately, compliance with and enforcement of Title I appear suboptimal. Actors at different levels — including within private firms and governmental units — should advocate for measures that empower workers to understand, exercise, and pursue their rights under the ADA.

A federal paid medical leave program represents a concrete and high-yield policy remedy that could have an immediate and positive impact on the work outcomes of people with mild or moderate mental illness and would be less costly and complex than mandated short-term disability programs. Arrangements like those in Connecticut, Oregon, and Washington State offer templates for such a program.

Other policies exist that can help alleviate the work difficulties experienced by people with mild or moderate mental illness. Paid sick leave policies and mandated short-term disability programs are different and complementary approaches to helping employees address absenteeism that offer at least some financial protection. Although sick leave offers very modest protection, it remains valuable for employees whose conditions are relatively minor and who need sporadic time off work to pursue care. By contrast, short-term disability programs address longer-term and more serious needs while offering access to RTW services. One limitation with these programs is that employers do not have to hold jobs for individuals on short-term disability leave. The FMLA, however, unlike sick leave and short-term disability programs, does offer job protections for people on leave. So an individual may be able to exercise their FMLA rights to remain connected with work while at the same time receiving benefits associated with short-term disability during the protected period (i.e., 12 or 26 weeks depending on employee characteristics).

That said, a federal paid medical leave program represents a concrete and high-yield policy remedy that could have an immediate and positive impact on the work outcomes of people with mild or moderate mental illness and would be less costly and complex than mandated short-term disability programs. Arrangements like those in Connecticut, Oregon, and Washington State offer templates for such a program. A second option would be a pending congressional bill called the Family and Medical Insurance Leave Act (FAMILY Act), which would create a national insurance program to provide workers with up to 12 weeks of partial income (i.e., 66 percent of their monthly wages).⁵⁶ A third possibility would consist of implementation of President Biden’s American Families Plan (AFP), which he unveiled in April 2021.⁵⁷ The AFP, like the FAMILY Act, would cover up to 12 weeks of partial income and entitle employees with up to $4,000 per month depending on their weekly wages.