PFML May Be Coming to Your State: What Employers Need to Know
Current federal proposals for a universal paid family and medical leave (PFML) program may, if enacted, present a unique set of regulatory challenges and added administrative responsibilities to already-stretched HR and benefits staffs across the country. Both private sector and public employer organizations may be required to implement a PFML program for their employees at a time of seismic changes occurring in the workplace and limited resources for many employers across the nation.
As congressional PFML plans continue to develop, it appears that there is a real potential for comprehensive federal paid family and medical leave to pass this year. Thus, now may be the time to sharpen your understanding of the potential impact that a federal paid family and medical leave program may have on your organization.
If you’re just digging in to PFML, you may find this article helpful: PFML: What Is It and What Can We Expect?
While leave details vary greatly between the current federal paid leave proposals and the nine states that have passed statewide PFML plans, there are common themes to consider.
- How does a PFML program affect HR Management?
- How does a PFML program impact your current benefits program?
- How do federal and/or state PFML laws affect private sector and public employers, labor unions, and associations?
PFML and HR Management
PFML provides benefits that allow employees to take paid time off to care for themselves or a family member with a serious medical condition, for bonding with a new child, or to recover from an illness or injury.
Think about your employee population. How many parents do you have on your staff? Similarly, how many may have family members to care for? What’s the makeup of employees who may be planning for pregnancy, childbirth, or adoption?
Under the Biden administration’s proposed American Families Plan, workers could be guaranteed 12 weeks of paid leave to bond with a new child, care for a seriously ill loved one, deal with a loved one’s military deployment, find safety from sexual assault, stalking, or domestic violence, heal from their own serious illness, or take time to deal with the death of a loved one.1
How will you manage increases in the number of employees out on leave? Will you be able to maintain an adequate workforce to account for employee overlap during periods of time away from their job?
According to a 2019 Mercer survey, nearly 64% of respondents say they have had to add resources to deal with new leave mandates.2 What are the administrative requirements of implementing and maintaining a new federal or state mandated PFML program? Do you have the administrative staff to handle the additional responsibility?
Impact on Current Benefits Program
Integration of a PFML program with your current benefits will vary depending on the specific federal or state PFML plan that may be applicable, and the nature of your current insurance coverages, sick leave plan and other employee benefit features. Since PFML offers benefits that will be provided either through the government program directly, or alternatively, through allowed employer self-funded or carrier provided leave or temporary disability benefits, there will be some coordination requirements.
- How will PFML programs integrate with your organization’s sick leave, sick leave banks, sick leave donations, etc.?
- What impact will PFML have on your voluntary supplemental insurance plans?
- Will it be necessary to offer supplemental benefits to fill potential holes in PFML coverage (waiting periods, long-term disability, etc.)?
Organizations should also begin thinking about how a federal or state paid leave plan could impact their recruitment and retention. One of the primary reasons employers offer robust benefits packages that frequently include short-term and long-term disability plans is to recruit and retain employees.3 Behind salary, it’s often a top deciding factor in the job selection process.
- What are ways you can continue to attract employees and stand out?
- Will PFML plans diminish the value of employer-provided benefit plans as a differentiator?
How does a federal or state paid leave law affect public sector employers, labor unions, and associations?
Paid leave, short-term disability plans, and long-term disability plans are traditionally negotiated between public sector employers and employee representatives. The mutual goal of this bargaining process gives state and local government organizations the opportunity to mutually develop benefit plans that result in the best outcomes for public sector employees.
- How would a federal or state paid leave plan affect the ability for public sector employers to negotiate their employee benefit plans?
- How would a federal or state paid leave plan impact the ability for labor unions, employee insurance committees or association representatives to negotiate public employee benefit packages?
- Could federal or state paid leave requirements impact the overall public sector employer benefit selection process and the need to collaborate on selection outcome?
American Fidelity will continue to monitor and communicate regulatory changes to help employers succeed in benefits management. Subscribe for updates at americanfidelity.com/pfml.
This blog is up to date as of September 2021 and has not been updated for changes in the law, administration or current events.