The Paid Family Leave trend is gathering speed in states around the country. Currently, California, New Jersey, New York, Rhode Island, and Washington have paid family leave programs, as does Washington, D.C. Unlike state and municipal sick leave laws, the paid family leave programs generally are administered by the state, not the employer. Many of the state programs have involved the use of pre-existing temporary disability insurance programs, which going forward will also pay eligible employees for leave to care for a family member, for birth or adoption of a child, or sometimes for the employee’s own health condition. The Washington, D.C. and Washington State programs have created a new fund specifically for the purposes of administering the paid leave. All of these programs are funded through payroll taxes.
Massachusetts seems poised to be next on the list. Last week, legislators in Massachusetts’s house of representatives passed a paid family leave bill in an effort to keep certain proposals on paid leave, minimum wage, and reducing the state sales tax off the November election ballot. The bill, which includes paid family leave provisions in addition to increasing the minimum wage and an annual sales tax holiday, will now move to the state senate for approval. (Like the state house of representatives, the state senate is controlled by Democrats.) If the bill passes the state senate, it will then move to the governor, who has already indicated he will sign the bill.
If signed into law, the Massachusetts program will provide for all eligible workers to take up to twelve (12) weeks of paid leave to care for a sick family member or new baby and up to twenty (20) weeks of paid leave for their own medical needs. Compared to other states’ paid family leave programs, the benefits of the Massachusetts program are relatively generous.
Like the patchwork of existing state sick leave laws, the new state paid family leave laws vary significantly in the benefit they provide to employees as well as the amount deducted from employees’ paychecks. For instance, the Washington, D.C. program provides for up to eight (8) weeks of parental leave to bond with a new child, six (6) weeks of family leave to care for an ill family member with a serious health condition, and two (2) weeks of medical leave to care for one’s own serious health condition. The New Jersey program, on the other hand, provides up to six (6) weeks to bond with a newborn or newly adopted child or to provide care for a seriously ill family member. New York’s program slowly increases the amount of paid leave an employee will receive over time, from eight (8) weeks of paid leave in 2018 to twelve (12) weeks in 2021. New York will also slowly increase the percentage of a person’s average wage that is paid to them.
Given the current U.S. Congress, there is little likelihood of federal action on the topic in the immediate future. In the meantime, however, we can expect that more states will continue to enact programs like those already in place in California, New Jersey, New York, Rhode Island, Washington, and Washington, DC.
Multistate employers should be aware of the various paid leave programs in the locations in which they operate. Because of the varying eligibility requirements, payroll deductions, and benefits of each program, close attention should be paid to the specifics of each state’s program. Even if your company does not currently have offices in a state with a paid family leave program, Massachusetts shows us that it is a good idea to follow the news regarding these laws, because your state may be next!
Even though employers do not pay for the paid family leave, changes will need to be made to their payroll system and may also need to be made to their employee handbooks and leave policies to reflect the program. Furthermore, employees will undoubtedly have questions regarding the details of the new law, the benefit amounts, the amount and initiation of new payroll taxes, and how the program will interact with other leave laws and company leave policies. Employers should arm themselves with knowledge of the patchwork of laws and any similar new state laws on the horizon.