Know Your Leave: Understanding FMLA, Paid Leave, and Disability Insurance
In the United States, understanding the various methods of paid and unpaid leave can be confusing at best. As many states have initiated or passed legislation to offer paid medical and family leave to employees, employers and employees are often left with questions about their options.
Take a few minutes to explore the difference between the Family and Medical Leave Act (FMLA), Paid Family and Medical Leave (PFML), and disability insurance.
Family and Medical Leave Act
The Family and Medical Leave Act is a United States labor law which allows eligible employees to take up to 12 weeks of unpaid leave for certain family and medical reasons, without the risk of losing their job. Unlike state-paid leave plans, employees do not have to pay anything to be protected by FMLA.
According to the U.S. Department of Labor 1, the FMLA applies to all public agencies and private section employers who employ 50 or more employees for at least 20 workweeks in the current or proceeding calendar year. There are rules surrounding who qualifies for leave, typically based on hours worked.
It is important to understand that FMLA only requires unpaid leave. This means employers must allow up to 12 workweeks of unpaid, protected time off for a qualified reason. However, the law permits employees to elect to use their paid vacation leave in conjunction with FMLA. Some employers may require their employees to use any accrued paid vacation, sick, or other leave time during the FMLA leave period.
Short-term and long-term disability policies may be used if the leave is for a covered disability in conjunction with FMLA to help supplement lost income while an employee is unable to work.
Paid Family and Medical Leave
Some states are now offering Paid Family and Medical Leave, including California, Connecticut, Massachusetts, New Jersey, New York, Oregon, Rhode Island, and Washington. PFML is a state-offered benefit allowing a limited amount of paid leave for medical or family reasons and is separate from FMLA or other benefits offered by your employer. The eligibility requirements, benefit amounts vary by state. Because PFML provides paid benefits, most state benefits require either a voluntary or mandatory contribution to the state-paid plan before benefits can be claimed. In most cases, both the employer and employee will need to pay premiums for benefits.
Typically, employees are given an allotted bucket of time (example: 16 weeks total) to use for qualified medical or family leave. If employees use all 16 weeks for medical leave, they do not have an additional 16 weeks for family leave. Similar to FMLA, medical leave is typically used when employees experience a serious health condition that prevents them from working. Family leave is typically used when employees need to take time off to care for a family member. If employees qualify for both PFML and FMLA, they may be required to take both leaves congruently.
Disability insurance is designed to help supplement lost income while you are unable to work due to a qualifying disability. You will typically hear disability insurance referred to as long- or short-term disability, which distinguishes how long the benefits will last.
Disability insurance can play a vital role in your benefits package even if your state offers PFML. The benefits from a state-sponsored program are typically limited to a short period of time. This could leave you with a significant gap in coverage due if you experience a long-term disability. The duration of the average long-term disability claim is 34.6 months.2 It is important to understand your available benefits in order to make the best choices for you and your family.