On March 25, 2009, the chair of the House of Representatives' Ways and Means Committee's Health Subcommittee, Representative Pete Stark, introduced new legislation that would create an insurance fund to provide for 12 weeks of paid benefits for employees to take time off due to their own illness, or to care a sick family member. The Family Leave Insurance Act of 2009 (H.R. 1723), if enacted, will significantly expand workers' rights to benefits for family and medical leave, even in the few states where family leave insurance is already in place.

The federal Family Leave Insurance Act of 2009 would provide workers nationwide with 12 weeks of paid leave over a 12-month period to:

  • care for a new child;
  • care for a family member with a serious health condition;
  • attend to employee's own serious health condition;
  • care for a wounded veteran; or
  • attend to a qualifying exigency arising from the military deployment of a family member.

The Department of Labor would contract with states to administer the program, similar to the way in which Unemployment Insurance is administered. The benefits would be funded equally by employers and employees, who would each contribute 0.2 percent of the employee's pay. Benefits would be progressively tiered, so that lower income workers would receive full or nearly full salary for the weeks they receive benefits, employees making between $30,000 and $60,000 per year would receive 55 percent wage replacement, and those earning more than $60,000 would receive 40-45 percent wage replacement, with the benefit capped at approximately $800 per week.

While the proposed legislation would allow states to opt out of the program if they provide equivalent or better benefits, no state in the country would qualify at this time for such an opt-out. Currently, only California provides family leave insurance benefits to employees. New Jersey will begin providing such benefits on July 1, 2009, and Washington has postponed the implementation of its paid family leave program. Each of these states only provides for, at the most, six weeks of family leave benefits. The proposed federal legislation doubles the time during which workers would receive paid leave benefits.

The proposed legislation leaves open a number of questions, such as how it would be implemented and how it would interact with other laws affecting employees, such as state temporary disability insurance laws. While the proposed legislation would not replace the Family and Medical Leave Act, it would mandate that all employers with 20 or more employees participate in the fund. (Smaller employers could participate in the fund on a voluntary basis). Left unclear in the bill's language is whether it effectively expands the FMLA's guarantee of job-protected leave from covering employers with 50 or more employees to covering those with 20 or more. While the terms of the proposed bill do not specifically state that employees seeking family leave benefits would be protected from losing their jobs, they do bar employers from interfering with employees' attempts to obtain paid family leave.

Two prior attempts to enact similar legislation failed to pass the committee stage. However, recent Democratic gains in Congress may increase the likelihood of the bill passing, even in a modified form.