Hunton Employment & Labor Perspectives

The current trend at both the state and federal levels is moving in the direction of mandatory paid family leave.  For example, in recent years, 6 states (California, Massachusetts, New Jersey, New York, Rhode Island, and Washington) and the District of Columbia have enacted mandatory paid family leave benefits for employees.  Moreover, at least 18 other states are currently considering some form of paid family leave legislation.

While varying across the different jurisdictions, the bills typically provide up to 12 weeks of paid family leave for employees who need time off from work due to child birth or adoption or a family member’s serious health condition.  The paid leave benefit is typically a portion of the employee’s regular wages and is usually funded through a combination of employee and employer contributions.  In many of these jurisdictions, the employer must purchase a supplemental insurance policy to provide family paid leave, and the insurance carrier, in turn, is responsible for making eligibility determinations.

Currently, there is no federally-mandated paid family leave, but both Democrats and Republicans have submitted proposals in Congress that would provide paid time off for workers nationwide.  On Tuesday, March 12, Sens. Joni Ernst (R., IA) and Mike Lee (R., UT) introduced the Child Rearing and Development Leave Empowerment (CRADLE) Act, under which an employee could defer up to three months of his or her social security entitlement in order to receive it during the paid family leave period.  Last August, Sen. Marco Rubio (R., FL) and Rep. Ann Wagner (R., MO) proposed the Economic Security for New Parents Act, which would also allow employees to receive Social Security payments while on leave, but in return, require them to retire the same number of weeks later than they would have otherwise.  Alternatively, Sen. Kirsten Gillibrand (D., NY) introduced in 2017 the Family and Medical Insurance Leave (FAMILY) Act, which would fund 3 months of mandatory paid family leave with an expanded payroll tax.  At least one other member of Congress, Sen. Bill Cassidy (R., LA) has plans to submit an additional paid family leave proposal this year.  Moreover, in his February 5 State of the Union address, President Trump called for “nationwide paid family leave” and said that he would be incorporating a paid family leave measure into the federal budget.  Only time will tell whether the President and Congress can reach a consensus as to how best to implement a paid family leave requirement, including the amount of leave available, what events are covered, and who will pay for the leave benefit.