Why Paid Family Leave Should Be on Your Radar – If It Isn’t Already

Have you been hearing a lot about paid family leave (PFL) lately? For those in the HR world, you may feel like the subject is hitting you from all sides with talk of legislation at the federal level and several states creating new PFL programs or expanding existing ones.

As an employer, you may be wondering about the significance of these laws and what they mean for your workplace. Below is a quick refresher on what PFL is and how your organization might be affected.

Paid Family Leave Overview

Several states have passed PFL-related laws to address a gap in coverage left by federal and state leave laws. While the federal Family and Medical Leave Act (and similar state laws) require covered employers to allow eligible employees to take job-protected leave for certain family and medical reasons, the leave is unpaid. As a result, many employees cannot afford to take full advantage of this time off. PFL helps employees by providing them an opportunity to take paid leave under similar circumstances.

Some of the original state PFL laws were insurance-based and provided only wage-replacement benefits (e.g., California and New Jersey). However, more recently, states have passed laws providing both wage-replacement benefits as well as leave and reinstatement rights.

Although several of the state PFL programs are funded by employee-paid payroll taxes with no employer contribution requirement, certain PFL laws also require employers to help with funding. In some states, PFL benefits are administered along with temporary disability insurance (TDI) by the applicable state agency. However, not all PFL laws fall under a TDI law.

In general, PFL laws consider absences to care for a seriously ill family member and to bond with a new child to be qualifying reasons for leave. Some laws also allow employees to use PFL benefits for a military-related qualifying exigency or for their own medical condition.

Existing State Laws

As of this writing, the following jurisdictions have PFL laws:

  • California;
  • Massachusetts;
  • New Jersey;
  • New York;
  • Rhode Island;
  • Washington;
  • San Francisco; and
  • Washington, DC.

The PFL program requirements for private employers may vary depending on the jurisdiction, including:

  • The absences that qualify an employee for PFL;
  • The family members that may be covered under the law;
  • Employee and employer contribution obligations;
  • Leave rights and insurance benefit entitlements;
  • Waiting period requirements; and
  • Notice and documentation requirements.

Proposed Federal Legislation

In the absence of a federal PFL requirement, states have been at the forefront of this area of law. However, there has been recent action at the federal level with several bills being introduced in the US Congress, and both sides of the political aisle approving of some type of federal PFL.

The current proposed legislation varies depending on how a federal PFL program would work and includes the following ideas:

  • Creating tax-exempt parental leave savings accounts similar to health savings accounts;
  • Providing partial wage replacement for FMLA-qualifying events;
  • Allowing parents to pull forward a portion of their Social Security benefits; and
  • Allowing parents to receive 1-3 months of paid leave by postponing their Social Security benefits.

With the current political climate, it may be difficult to get enough bipartisan support for any legislation to pass, but it is an issue that doesn’t appear to be going away soon and may be something that is raised frequently during the 2020 elections.

Employers Taking Action

Employers are increasingly embracing family-friendly benefits, with more organizations continuing to offer paid parental leave even without being required to do so by federal or state law. Parental leave is viewed by many employers that offer it as an ongoing commitment and investment in their employees’ health and welfare. This is because parental leave has often been cited for having a far-reaching impact on employees, including:

  • Physical and mental benefits;
  • Healthier children; and
  • Career advancement advantages.

Additionally, paid parental leave allows parents to be more prepared to come back to the workforce and easily transition back into their positions.

Compliance Issues

Employers should be aware of their obligations under existing laws and know how to identify and respond to requests for information regarding PFL benefits. It is also important to understand how state PFL laws interact with other leaves of absence protected under federal, state or local laws.

What’s clear is that PFL continues to be a trending issue, and more states are considering passing these laws. That’s why employers must be vigilant in tracking these developments to ensure compliance.

Is Paid Family Leave on your organization’s radar? Let us know by leaving a comment below.

 

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