Benefits and Compensation, HR Management & Compliance

Paid Family Leave Proposals Gaining Attention, Possibly Momentum

With all that’s going on in Washington, D.C., it’s easy for issues to get lost in the noise and clutter, but paid family leave is managing to remain a topic of conversation.

Recent months have seen various paid family leave proposals floated. The issue was mentioned in the January 30 State of the Union Address and reportedly has been the subject of e-mails between Senator Marco Rubio and first daughter and presidential adviser Ivanka Trump.

The buzz may have employers wondering what’s in store and how a federal policy might affect how they comply with the patchwork of state and local laws currently on the books. The differing legal obligations worry many employers, according to Nita Beecher, an editor of Federal Employment Law Insider and attorney with Fortney & Scott, LLC, in Washington, D.C.

“It’s not that employers don’t want to provide paid leave; they do,” Beecher says. But the multitude of state and local laws—all a little different—make the subject difficult.

A proposal backed by the Society for Human Resource Management (SHRM) is called Workflex in the 21st Century. Beecher says she’s surprised the bill, which was introduced by California Republican Representative Mimi Walters, hasn’t gained more attention.

The bill would create a qualified flexible work arrangement under the Employee Retirement Income Security Act (ERISA). Because the plan would be tied to ERISA, participating employers would be shielded from varying state and local paid leave laws. Mike Aiken, vice president for government affairs at SHRM, explained the bill in an interview in the December 2017 issue of Federal Employment Law Insider.

“If an employer elects to offer all employees a minimum amount of compensable leave and a flexible work arrangement through the plan, this ERISA-covered plan would preempt state and local paid leave and Workflex laws,” Aiken said.

To have a qualified flexible work arrangement plan, an employer would have to offer all employees, including both full- and part-time workers, a minimum threshold of paid leave (scalable to the size of the organization) and at least one flexible work arrangement, Aiken explained in the interview.

The Workflex bill would be voluntary for employers and therefore wouldn’t ensure paid leave and flexibility to all workers.

The ERISA preemption aspect of the Workflex bill makes it attractive, Beecher says, since employers with operations in multiple states “really are having a hard time because the laws keep proliferating in states and localities.” Having a federal law on paid family leave won’t solve that problem unless it preempts state and local laws.

“Generally, federal laws are the basement,” Beecher says. State and local laws can impose more requirements. If employers have to comply with a federal paid leave law, they really don’t want to be required to comply with the state and local standards, she says.

Other proposals to provide paid leave are also on the table. A recent account from Politico reports that Rubio and Trump are exploring what kind of approach might have a chance to win Republican support since paid family leave hasn’t traditionally been a Republican issue.

The Politico report says one idea would be to allow people to draw Social Security benefits during time they take off for family reasons such as having a child. Then their Social Security retirement benefits would be delayed to make up for the benefits taken for family leave years earlier.

For example, someone who takes six weeks of leave to care for a new child would reach full retirement age six weeks later than she otherwise would. Such a proposal wouldn’t impose a mandate on employers and wouldn’t raise taxes to pay for it.

Another proposal getting attention is from Democratic New York Senator Kirsten Gillibrand. Her Family and Medical Insurance Leave Act (FAMILY Act) would create a paid family and medical leave program for all workers regardless of age, gender, marital status, or employer size. It would replace up to 66 percent of wages for up to 12 weeks a year in the event of a serious personal or family medical emergency, including for new children as well as ailing family members.

In a statement released in February 2017, Gillibrand said her bill is modeled after successful state programs and would cost employers and employees “only as much as a cup of coffee per week.” News reports explain that both employers and employees would pay a tax of the equivalent of approximately $1.50 per week for a typical worker.

Beecher says that based on the current administration’s aversion to adding federal programs, she thinks the FAMILY Act is “a no-go.”

Another part of the paid leave issue to keep in mind, Beecher says, is that employees of covered federal contractors now get paid sick leave under an Executive Order President Barack Obama signed. The order provides up to seven paid sick days a year for full-time employees. Since the paid leave provision comes through an Executive Order, President Donald Trump can get rid of it by signing his own Executive Order if he chooses.