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A Look at the Latest: Paid Family and Medical Leave

 

October 01, 2021

4 minute read

Category: Compliance Updates

Father with his two children

Paid family and medical leave (PFML) legislation is gaining momentum across states, and Congress is currently reviewing federal proposals. The state programs include wage and income replacement, such as temporary disability insurance or other leave benefit programs.

Knowing the benefits landscape at the federal level and in your state is key to protecting your district and your employees, and staying compliant with the law.

The PFML Landscape

Unlike the Family and Medical Leave Act (FMLA), which entitles eligible employees of covered employers to take unpaid, job-protected leave for specified family and medical reasons, PFML provides payments to workers to help ensure they have income during these types of events.

As of August 2021, nine states plus the District of Columbia have adopted comprehensive paid family and medical leave programs. The states are California, Colorado, Connecticut, Massachusetts, New Jersey, New York, Oregon, Rhode Island, and Washington. Because PFML has been enacted only on a state or local level so far, specifics vary. For example:

  • Medical leave ranges from two weeks to thirty weeks in a one-year period.
  • Family leave ranges from six weeks to twelve weeks in a one-year period​.
  • Wage replacement percentage varies from 40% to more than 100% of average weekly wages. Maximums range from $170 per week to $1,356 per week. To calculate a benefit amount, some states compare average weekly earnings to a multiplier based on the prevailing minimum wage.

In addition, plan eligibility and the definition of eligible family members differ in the states and localities where legislation has been enacted​.

Complex Benefits Programs

Looking at state level PFML programs might help predict what a national plan could mean. In some states, public sector employers, like school districts, municipalities and counties can opt-in or opt-out; in other jurisdictions, certain public sector employees are covered automatically. School employers may need to consider several options and their impact on existing programs.

Public schools and other local government employers offer a complex web of interconnected benefits. Paid family and medical leave programs may impact benefits, including:

  • Disability pension/retirement benefits.
  • Employer-paid short- or long-term disability coverage.
  • Voluntary employee-paid short- or long-term disability coverage.
  • Sick leave banks that may include a donation mechanism.

In states that have PFML or state temporary disability plans, it is important to know whether these programs mandate public school system participation. The majority of these states allow some form of optional employer-offered self-funded plans, employer-sponsored private insurance carrier plans, or private carrier voluntary choices at the employee level.

National Paid Leave Proposals

Congress is currently reviewing legislative proposals for a national PFML program. While there is no set date for a decision, we believe that there is a very good chance that federal legislation could pass this year, and employers should be reviewing the proposals now to understand potential impacts to current benefits and advocate for the best outcome for their organization and people. Figure 1 offers a side-by-side comparison of two federal programs being considered.

 
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Many details in these plans have not been identified or reconciled. There will likely be much negotiation around benefits, funding, leave definitions, private or self-funding alternatives, and many other issues. It is important to follow these initiatives as they develop and change. 

For PFML guidance, visit 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.

 
  • Tags:
  • PFML
  • Compliance

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Comparative Chart of Paid Family and Medical Leave Laws in the United States. A Better Balance. July 28, 2021. www.abetterbalance.org/resources/paid-family-leave-laws-chart/

This information is intended to be educational. It is general in nature and should not be considered legal or tax advice. Consult an attorney or a tax professional regarding your specific situation.

This article is current as of September 2021 and has not been updated for changes in the law, administration, or current events.

ESB-9006-0921

American Fidelity Assurance Company
americanfidelity.com

https://americanfidelity.com/blog/compliance/pfml-a-look-at-the-latest/

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Comparative Chart of Paid Family and Medical Leave Laws in the United States. A Better Balance. July 28, 2021. www.abetterbalance.org/resources/paid-family-leave-laws-chart/

This information is intended to be educational. It is general in nature and should not be considered legal or tax advice. Consult an attorney or a tax professional regarding your specific situation.

This article is current as of September 2021 and has not been updated for changes in the law, administration, or current events.

ESB-9006-0921

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