What to Expect With Paid Leave Laws

Federal Action

In 2018, Republican Senators Marco Rubio of Florida and Bill Cassidy of Louisiana sought to generate bipartisan momentum on the issue. Senator Cassidy, working closely with Ms. Trump, held congressional hearings on the issue and Senator Rubio proposed a bill, the Economic Security for New Parents Act, which would provide for two months of paid parental leave. Under his proposal new parents could delay taking their Social Security benefits in exchange for two months of paid benefits. The proposed bill made little progress in Congress. Much of the discussion focused on the impact on the continued viability of Social Security if funds were used to finance nonretirement needs. Some expressed concern that a paid leave program funded by Social Security benefits could lead to other uses of the funds.

There is little question that a paid leave program enabling new parents to balance the competing demands of work and family is an attractive benefit. In fact, a recent poll found that 54% of Americans think that the government should require employers to provide 12 weeks of paid family and medical leave. Only 29% of respondents disagreed. The obvious popular support and increasing political pressure from both sides of the aisle for some type of leave program makes federal action is more probable than not.

President Trump’s most recent budget proposal, as part of its focus on support for working families, includes a provision calling for access to paid family leave for all new parents. It proposes at least six weeks of paid family leave to new mothers and fathers, including adoptive parents. It makes no mention of paid leave for their own or a family member’s health issues. In response, the Democrats have put forward a proposal that addresses both issues and would give families 12 weeks paid leave. How such leave would be funded remains a thorny issue. In addition to concerns that use of Social Security benefits could erode the program, there is no consensus on whether it should be funded by employers or rather a combination of employee and employer contributions. Other open issues are what the percentage of pay replacement should be and for how many weeks. Despite these open questions, momentum is steadily building for some form of federal paid family and medical leave, even if the details remain unclear.

We are not likely to see any action until well after the 2020 election. However, the bipartisan support for a federal mandate on paid leave virtually assures that it will become a reality no matter which party is in control after the election.  

State Action

It has become increasingly common for states to step in and adopt workplace regulations when the federal government fails to act. State-mandated minimum wages is one good example. Increases in state minimum wages have exploded in recent years. This is partly due to the failure of the Department of Labor to raise the federal minimum wage above the current $7.25 per hour. There is uniform agreement that it is seriously outdated. The Fight for $15 has also played a role in causing states to act. Most states today have a minimum wage substantially higher than $7.25 per hour. The same type of state action has been true on the issue of paid family and medical leave as well. More than 24 states are currently working on their own paid family leave policies, and seven have enacted legislation, with the list of additional states growing rapidly.

On June 25, 2019, Connecticut became the seventh state to sign into law a paid family and medical leave benefit for both public and private employees. It is being cited as among the most generous in the country. Employees will be entitled to 12 weeks of paid leave as well as two additional weeks for “a serious health condition resulting in incapacitation that occurs during a pregnancy.” Employees taking such leave will be entitled to as much as 95% wage replacement. The amount of benefits will be tied to the states minimum wage, which is progressively increasing to $15.00 up to June 1, 2023. The other states to have enacted paid leave laws are California, Massachusetts, New Jersey, New York, Rhode Island, and Washington state. Washington D.C. has similarly enacted a paid leave law.

The number of paid weeks of leave each state law allows varies, as do the dates when benefits may be taken. For example, the Washington D.C. law provides two to eight weeks of paid leave which could be taken as of July 1, 2020. The California paid leave, already being utilized, grants up to six weeks of benefits. On July 1, 2020 the benefit period went to eight weeks. The Massachusetts plan, which will begin paying benefits in 2021, will provide 12 weeks of paid family leave or 20 weeks of medical leave per year. The plan in New Jersey, also already in effect, currently provides benefits for up to 6 weeks. On July 1, 2020, the benefit period increased to 12 weeks. The New York law currently provides 10 weeks of paid family and medical leave, which will be raised to 12 weeks in 2021. The Rhode Island plan is already providing four weeks of leave. The Washington plan, which began paying benefits on January 1, 2020, provides up to 12 weeks of paid leave with two additional weeks of paid leave for pregnancy-related complications.

The amount of the benefits paid during the leave varies widely from state to state. For example, in Connecticut it is a multiple of the state’s minimum wage limited to a maximum dollar amount. In other state plans, benefits are structured as a certain percentage of wage replacement to a maximum dollar amount. No state plan has provided for full replacement of lost wages. However, given the discussion of free health care, free college, and similar ideas leading up to the 2020 election, it is possible that we could soon see support fully paid sick leave benefits by the federal or state governments. It may only be a matter of time before we see such a proposal.

Maine’s May 2019 passage of legislation that provides employees 40 hours of paid leave for any reason, not limited to family or medical reasons, represented another significant expansion to the paid leave concept. A virtually identical law was passed in June 2019 in Nevada. Moving forward, there seems to be no question that more states will move in the direction of mandatory paid family and medical leave, with a handful already moving beyond.

In 2018, Republican Senators Marco Rubio of Florida and Bill Cassidy of Louisiana sought to generate bipartisan momentum on the issue. Senator Cassidy, working closely with Ms. Trump, held congressional hearings on the issue and Senator Rubio proposed a bill, the Economic Security for New Parents Act, which would provide for two months of paid parental leave. Under his proposal new parents could delay taking their Social Security benefits in exchange for two months of paid benefits. The proposed bill made little progress in Congress. Much of the discussion focused on the impact on the continued viability of Social Security if funds were used to finance nonretirement needs. Some expressed concern that a paid leave program funded by Social Security benefits could lead to other uses of the funds.

There is little question that a paid leave program enabling new parents to balance the competing demands of work and family is an attractive benefit. In fact, a recent poll found that 54% of Americans think that the government should require employers to provide 12 weeks of paid family and medical leave. Only 29% of respondents disagreed. The obvious popular support and increasing political pressure from both sides of the aisle for some type of leave program makes federal action is more probable than not.

President Trump’s most recent budget proposal, as part of its focus on support for working families, includes a provision calling for access to paid family leave for all new parents. It proposes at least six weeks of paid family leave to new mothers and fathers, including adoptive parents. It makes no mention of paid leave for their own or a family member’s health issues. In response, the Democrats have put forward a proposal that addresses both issues and would give families 12 weeks paid leave. How such leave would be funded remains a thorny issue. In addition to concerns that use of Social Security benefits could erode the program, there is no consensus on whether it should be funded by employers or rather a combination of employee and employer contributions. Other open issues are what the percentage of pay replacement should be and for how many weeks. Despite these open questions, momentum is steadily building for some form of federal paid family and medical leave, even if the details remain unclear.

We are not likely to see any action until well after the 2020 election. However, the bipartisan support for a federal mandate on paid leave virtually assures that it will become a reality no matter which party is in control after the election.  

State Action

It has become increasingly common for states to step in and adopt workplace regulations when the federal government fails to act. State-mandated minimum wages is one good example. Increases in state minimum wages have exploded in recent years. This is partly due to the failure of the Department of Labor to raise the federal minimum wage above the current $7.25 per hour. There is uniform agreement that it is seriously outdated. The Fight for $15 has also played a role in causing states to act. Most states today have a minimum wage substantially higher than $7.25 per hour. The same type of state action has been true on the issue of paid family and medical leave as well. More than 24 states are currently working on their own paid family leave policies, and seven have enacted legislation, with the list of additional states growing rapidly.

On June 25, 2019, Connecticut became the seventh state to sign into law a paid family and medical leave benefit for both public and private employees. It is being cited as among the most generous in the country. Employees will be entitled to 12 weeks of paid leave as well as two additional weeks for “a serious health condition resulting in incapacitation that occurs during a pregnancy.” Employees taking such leave will be entitled to as much as 95% wage replacement. The amount of benefits will be tied to the states minimum wage, which is progressively increasing to $15.00 up to June 1, 2023. The other states to have enacted paid leave laws are California, Massachusetts, New Jersey, New York, Rhode Island, and Washington state. Washington D.C. has similarly enacted a paid leave law.

The number of paid weeks of leave each state law allows varies, as do the dates when benefits may be taken. For example, the Washington D.C. law provides two to eight weeks of paid leave which could be taken as of July 1, 2020. The California paid leave, already being utilized, grants up to six weeks of benefits. On July 1, 2020 the benefit period went to eight weeks. The Massachusetts plan, which will begin paying benefits in 2021, will provide 12 weeks of paid family leave or 20 weeks of medical leave per year. The plan in New Jersey, also already in effect, currently provides benefits for up to 6 weeks. On July 1, 2020, the benefit period increased to 12 weeks. The New York law currently provides 10 weeks of paid family and medical leave, which will be raised to 12 weeks in 2021. The Rhode Island plan is already providing four weeks of leave. The Washington plan, which began paying benefits on January 1, 2020, provides up to 12 weeks of paid leave with two additional weeks of paid leave for pregnancy-related complications.

The amount of the benefits paid during the leave varies widely from state to state. For example, in Connecticut it is a multiple of the state’s minimum wage limited to a maximum dollar amount. In other state plans, benefits are structured as a certain percentage of wage replacement to a maximum dollar amount. No state plan has provided for full replacement of lost wages. However, given the discussion of free health care, free college, and similar ideas leading up to the 2020 election, it is possible that we could soon see support fully paid sick leave benefits by the federal or state governments. It may only be a matter of time before we see such a proposal.

Maine’s May 2019 passage of legislation that provides employees 40 hours of paid leave for any reason, not limited to family or medical reasons, represented another significant expansion to the paid leave concept. A virtually identical law was passed in June 2019 in Nevada. Moving forward, there seems to be no question that more states will move in the direction of mandatory paid family and medical leave, with a handful already moving beyond.

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