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Benefits Administration

State’s Laws for Paid Family Leave

When discussing family leave, most people’s conversations center around The Family and Medical Leave Act (FMLA), which was enacted in 1993. FMLA applies to public employers and private employers who have 50 or more people. It lets eligible workers hang onto their insurance coverage and provides job protection while temporarily taking leave for up to 12 weeks in a 12-month period. Covered events for employees include the birth of a child, leaving work to care for a seriously ill family member, or recovery from a personal health condition.

FMLA is good legislation, but the down side is that employees are not paid during the time they’re on leave. This situation can put a strain on finances for working families, and often results in an employee coming back to work when they’re not really ready. Momentum continues to build for a federal paid-family-leave legislation, but we’re not quite there yet. Fortunately, states are realizing the challenge, and a few are starting to take up the slack by providing paid leave to their citizens.

A 2016 Pew Research Center study found that most Americans are in favor of a paid leave program for new parents, for employees who have personal medical issues, or those who need to take care of a family member with a serious illness. But they’re distinctly divided when it comes to deciding if the government should mandate that employers provide paid leave for their employees.

Paid Family Leave Programs by the Numbers

The U.S. Department of Labor’s Bureau of Labor Statistics says that only 17% of private industry, and state and local government workers had access to paid family leave insurance as of March 2018, an increase of 2% from 2017. Eighty-nine percent have unpaid leave benefits, a 1% increase.

The six states/municipalities that have paid a paid family leave program are:

  1. California
  2. New Jersey
  3. New York
  4. Rhode Island
  5. Washington
  6. Washington DC

California has its own unpaid leave plan under the California Family Rights Act that provides additional coverage compared to the FMLA. Lawmakers in New Hampshire, Nebraska and Vermont are considering similar leaves legislation. In 2018, 21 states were considering paid family leave laws, and this year even more are expected to consider legislation.

SHRM’s 2018 Employee Benefits survey of 3,500 HR pros found that 27% of surveyed companies provide some form of paid family leave. And most of those who do are not based in the states that have paid leave legislation. Savvy employers offer paid family leave because they understand that it’s a major concern with the Sandwich Generation, those employees who are both raising children and caring for older family members. This generation is predicted to represent more than 75% of the workforce within the next ten years, so it’s important to keep them happy.

States’ Family Leave Employment Laws Vary

Each state’s program provides varying benefits of paid family leave, from four weeks for family care in Rhode Island to a generous 26 weeks in Massachusetts beginning in 2021.

These five states/municipalities impose an employee payroll tax to fund paid family leave:

  1. California
  2. Washington DC
  3. New Jersey
  4. New York
  5. Rhode Island

Massachusetts and Washington pay for their plans by imposing an employee payroll tax as well as one for employers, depending on the size of the employer.

Wage replacement rates among the states range from 50-80%. California paid family leave provides a $1216 per week maximum benefit and gives workers with lower earnings, higher replacement rates. Washington DC’s program will have a maximum benefit of just $100 a week.

Workers’ Compensation and FMLA

Workers’ compensation provides for health care and income replacement in the event of a workplace injury., and it can overlap with FMLA. For example, an employee who suffers a workplace injury that is considered a “serious health condition” can be covered by both programs.

In this situation, the employer is required to provide leave under the law that provides the greater benefits to the employee. So, employers can’t require an employee to take time off under FMLA rather than getting Workers’ Compensation benefits if the injury makes them eligible.

As more and more states get on board with providing their own family leave programs, HR will have a lot more regulations to ensure compliance with. Our HR and benefits administration platform can help you manage.


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