A congressional legislative campaign active since 2013 may soon require employers to reimburse for 12 weeks of leave.
Employers should start paying attention now to a legislative campaign that may eventually create a mandated employee benefit that will make it considerably easier for employees to take 12 weeks of leave—with partial pay.
Employees have long had the right to take up to 12 weeks off to deal with a serious health condition, recover from childbirth, care for a newborn or a close relative. This right was established by the Family Medical Leave Act of 1993 (FMLA) and it came with one important restriction: the employer doesn’t have to pay an employee taking family medical leave. Employers might argue this has been a check on abuses of leave, making it less likely that people will use it unless they have a true medical emergency. Advocates for employees argue that most people can’t afford to take time off without pay, and thus can’t take this leave regardless of the circumstances.
Continuing a congressional legislative campaign that began in 2013, Sen. Kirsten Gillibrand (D-N.Y.) and Rep. Rosa DeLauro (D-Conn.) recently reintroduced legislation that requires employers to pay up to 66 percent of an employee’s pay—capped at a certain amount—for qualified family leave of 12 weeks or 60 working days annually.
Unlike the FMLA, which applies only to companies with 50 or more employees, the Family and Medical Insurance Leave (FAMILY) Act would apply to all companies, regardless of size. Most workers would qualify for the leave, regardless of how long they worked at the company.
Funding for the FAMILY Act would be established with a .2 percent to 1 percent payroll tax, shared equally by employers and employees. For an employee earning $36,092 per year, the benefit would cost about $1.39 per week, or $72.18 per year.
Since a payroll tax funds the program, there would be no direct cost to businesses, which are more likely to be concerned about creating an incentive for employees to take extra time off and the potential disruption to the workplace caused by a worker’s absence. On the other hand, advocates argue that the program would provide a safety net for lower-income workers, increase productivity by attracting and keeping talent in the workforce, reduce turnover costs and help small businesses compete on a level playing field with larger employers who offer more generous benefits.
Three states give us insight on how the program might work. California, New Jersey and Rhode Island have implemented their own versions of paid family leave and New York will begin a program in 2018.
Some companies already voluntarily offer paid family leave as a benefit. For example, Yum! Brands, the owner of Pizza Hut and Taco Bell, announced in early March that it will expand family leave for parents to include up to 18 weeks of paid leave for mothers, six weeks for fathers, partners and adoptive parents.
It is difficult to foresee the FAMILY Act becoming law during the current Republican-controlled Congress. Still, this idea seems to have a long-standing commitment from its supporters and they will be ready when the political climate changes, as it always does. It's also possible that paid family leave could gain traction incrementally. President Trump proposed a more modest paid family leave program during his campaign, one that would provide new mothers with six weeks of paid leave.
With the eventual implementation of a national paid leave program quite possible, employers should consider working with legal counsel to determine how paid leave will impact existing company procedures and employee morale. The proposed legislation may be a strong attraction and retention tool for top talent, but employers will need to take care that it is applied fairly, uniformly and economically.
Molly R. Gwin is an attorney at Isaac Wiles in Columbus where her practice focuses on defending employers from Title VII, ADA, ADEA, and other labor & employment litigation issues.