As the new D.C. paid employee leave law slides through Congress unopposed (with employer contributions beginning July 1, 2019 and eligible leaves beginning on 1/1/20), I thought it might be a good opportunity to discuss the growing proliferation of these types of paid leave laws throughout the US. Currently, four states (NY, NJ, CA and RI), the District of Columbia and the City of San Francisco have enacted paid family and medical leave laws (PFML). Washington state also has a leave law but it has never been funded.
Senators Kirsten Gillibrand and Rosa DeLauro have been attempting to have PFML leave law adopted at the federal level for a number of years. On February 7, 2017, they reintroduced proposed legislation in both houses of Congress (“the Gillibrand/DeLauro Bill”). President Trump also promised a more limited form of maternity leave during his campaign though there does not appear to have been activity in this area during the first 100 days.
As federal progress on this initiative stalls, we can expect the states to fill the void. In the first quarter of 2017, there was a flood of proposed PFML legislation introduced in more than 20 states, including: Arkansas, Colorado, Connecticut, Georgia, Hawaii, Illinois, Indiana, Maine, Massachusetts, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Mexico, Oklahoma, Oregon, Vermont, Virginia and Washington. There are some similarities and differences between and among the various proposals, which I will discuss below.
Most of these jurisdictions have bills pending that actually provide for some type of paid leave but in some states, pending bills propose providing tax credits to employers who offer voluntary PFML or propose creating a task force to study PFML. Indeed, in the US Senate, Senator Fischer introduced a bill which proposes tax credits for employers who voluntarily offer PFML Similar legislation was introduced in Arkansas, Connecticut, Nevada and Oregon. In Indiana and New Mexico, bills were introduced to study PFML and in Virginia a bill was introduced to direct the Commissioner of Labor/Industry to develop a PFML proposal.
Reasons for the leave? PFML legislation has an interesting history. The first states to adopt it (CA, NJ and RI) all have statutory disability laws and their statutory schemes provide for both disability and “caregiver” leave (which includes leave to bond with a new child or to care for a family member with a serious health condition). In NY, the state disability law was recently expanded to now also cover paid caregiver leave as well. In DC, the law provides three different types of leave: bonding with a new child, caregiver, and one’s own health condition, with each having varying lengths of leave available. In San Francisco, all that is covered is leave to care for a newborn child.
In 2017, the vast majority of bills introduced in state legislatures cover both caregiver leave (newborn bonding and family member with serious health condition) and leave on account of the employee’s own serious (non work-related) health condition. A work-related health condition would be covered by the Worker’s Compensation laws of the State. Many of the laws also cover “qualifying exigency” and “injured servicemember” leaves.
The Gillibrand/DeLauro bill covers caregiver leave as well as leave on account of an employee’s own serious health condition as does proposed legislation in each of the following states: Colorado, Connecticut, Georgia, Illinois, Maine, Massachusetts, Mississippi, Montana, Nebraska, New Hampshire, Vermont, and Washington State. Hawaii and Minnesota are the only two states where the proposed legislation is limited to caregiver leave.
How many weeks of leave? The number of weeks covered varies significantly. For example, the DC law provides for 8 weeks to bond with a new child, 6 weeks for family caregiver leave and 2 weeks on account of the employee’s own serious health condition. Rhode Island provides for 4 weeks leave while California and New Jersey provide for 6 weeks. The New York law which goes into effect on January 1, 2018 starts with 8 weeks increasing over time to a maximum of 12 weeks by 2021.
Under the proposed Gillibrand/DeLauro bill, 60 work days (12 weeks) are covered. In the state legislatures, most pending legislation provides for 12 weeks of leave. However, there are some pending bills at the lower end of the spectrum that provide for 4 or 6 weeks and some at the higher end that provide for between 16 and 26 weeks.
Amount of the benefit? All of the PFML laws have caps based on income. A number of the laws set the weekly maximum benefit at $1,000 per week.
Who funds the PFML: Current state laws are funded exclusively by employee contributions through payroll deductions that are deposited into a state fund and paid to employees by the state (though in some states insurers may also collect and pay these funds). In San Francisco, the PFML is entirely employer-paid through payroll. In that regard, the SFO law requires employers to “top up” employees who are receiving CA PFML to 100% of their pay (subject to caps on income). As noted above, the SFO law is limited to leave to bonding with a new child. In addition, the new DC law is funded 50% by employer contributions and 50% by employee contributions.
There is a definite trend in the proposed legislation toward joint employer/employee funding. Most of the bills introduced in early 2017 require the contributions to fund the leave be borne equally by the employer and the employee (while also kindly noting that an employer can choose to pay 100% of the contribution if it so desires).
Who actually pays the employees the leave benefits? Under all of the laws –except San Francisco – a government agency pays the benefits. In a few states, employers also have the option of selecting a private insurer to administer and pay the benefits.
Who is a family member? Many of the laws expand the definition of covered family members. Some propose covering adult children, siblings, grandparents, grandchildren. Some even propose that a family member may include anyone who has a close association with the employee (whether by blood or otherwise) that is the equivalent of a family relationship.
Waiting Periods? Some, though not all, of the proposed laws have a 1 week waiting period. Some of those laws that have waiting periods provide, however, that if the leave extends beyond a certain length the leave will be paid retroactively to the first day. Under both the current New Jersey law and the proposed Illinois law, if an employee is out for 3 weeks or more, benefits will be payable retroactively to the first day of leave. Other laws provide that an employer can require an employee to take up to 2 weeks of accrued PTO before receiving PFML benefits (e.g., bills pending in Massachusetts and Georgia).
Intermittent leave? A number of the laws expressly address whether or not leave can be taken intermittently. Under some laws, intermittent leave is allowed but the smallest increment in which it can be taken is one day. Under other laws, intermittent leave is authorized with no limit on the size of the increment. And, still others, are silent about intermittent leave.
Conclusion. It is unfortunate that there is such a patchwork of legislation. This is bound to lead to confusion and a heavy burden for multistate employers. However, employers should anticipate that this trend will continue. PFML is a popular cause and one that is here to stay.