How Do Different Types of Paid Leave Programs Work Together?
How Do Different Types of Paid Leave Programs Work Together?
Across the country, many states have enacted paid leave programs. Of the states with paid leave, some include parental, medical, family, and the most comprehensive, paid family and medical leave (PFML). To date, ten states plus the District of Columbia have a comprehensive PFML program. These states are sometimes referred to as “legacy states.”
Paid Leave Isn’t New
While the term paid leave has been making headlines in connection with negotiations surrounding the Build Back Better Act, benefits specialists and HR professionals have been managing a complex web of paid leave programs for years.
This maze of absence management is challenging. Before we look at how PFML works with other employer paid leave options, let’s first review the most common types of leave.
Unpaid Leave |
Paid Leave |
ADA |
Employer provided disability |
FMLA |
Sick Leave |
State or local unpaid leave laws and ordinances |
Parental Leave |
|
Personal, Vacation or Holiday Time |
|
Workers’ compensation |
How does PFML work with existing employer paid leave options?
Because PFML exists on state and local levels, leave details vary greatly. Still, looking at the states with PFML laws can help us make some assumptions on how types of paid leave coordinate.
It’s common for PFML benefits to be combined with other types of paid leave, but in most states, only pay up to 100% of an employee’s salary. PFML programs provide rules around the order in which benefits are paid and how they coordinate.
Paid Leave and Disability Insurance
The most common type of paid leave may coordinate with PFML is short-term disability insurance. However, to be eligible for both benefits, employees must meet state program requirements. It’s important to consider how the benefits work together.
New York passed a comprehensive PFML program in 2016. Under this plan, employees with an injury or illness not related to their job may be eligible for short-term disability benefits. Paid family leave does not replace disability benefits coverage.
After giving birth, new mothers may be eligible for both short-term disability benefits and paid family leave. While the two benefits cannot be taken at the same time, eligible employees can choose how they can use both benefits to support the needs of their family.
For example, if a new mother qualifies for short-term disability after giving birth, she can choose to:
- Immediately take all or any portion of her available short-term disability and then take paid family leave at any time within the first 12 months; or,
- Take paid family leave immediately, without taking any short-term disability.
There may be other times when an employee needs to use both short-term disability and paid family leave in the same year for different qualifying events. In all cases, employees cannot take more than 26 weeks of combined short-term disability and paid family leave benefits in a 52-week period.1
Read: Paid Leave on the Rise: Why Disability Insurance Is Still Important
PFML and Sick Leave
Paid sick leave, sometimes known as earned sick time, paid sick time, or paid sick days, is a type of leave typically earned or accrued by employees based on hours worked. There’s currently not a federal paid sick leave law, except for federal contractors, but many states, cities, counties, and towns now have paid sick leave laws.2
In Massachusetts, employees may not receive PFML benefits and use paid sick time through their employer at the same time. If they try to, the approved benefit amount may be reduced to offset benefits.3
Paid Leave and Vacation Time
Employer provided leave is usually paid time off work to be used for whatever the employee wishes, e.g. annual leave, personal days, vacation day(s), PTO, CTO, etc. Often this type of leave must be coordinated with PFML benefits.
In California, employees may elect to use accrued leave to supplement paid family leave to receive up to 100% of normal wages. For example, if Employee A normally earn $1,000 per week and her weekly paid family leave benefit is $550, she can receive a maximum of $450 from her employer in PTO or vacation to reach 100% of normal wages.
Another example is in Massachusetts. When PFML leave begins, there is a 7-day waiting period before PFML payments start. During the waiting period, the employee will be on job-protected leave but will not receive benefit payments from the Department of Family and Medical Leave. During this 7-day waiting period, the employee can use accrued paid leave from the employer with no impact to their PFML benefits. This can be helpful for employees who want to avoid a week without pay.4
What’s the Result?
Various types of paid and unpaid leave may run concurrently or separately based on a wide variety of reasons. Keeping up with the requirements in your state is important, while also staying alert as new states adopt PFML programs.
This blog is up to date as of November 2021 and has not been updated for changes in the law, administration or current events.