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Is This the Year of a Federal Paid Parental Leave Law?

February 14, 2019 By Julie Kramer - Leave a comment

Part 2 in a Series on Pressing Paid Leave Issues

shutterstock_606447674-1Is federal paid parental leave legislation finally having a moment? Because the subject keeps popping up. 

Earlier this month, President Trump mentioned it in his 2019 State of the Union Address, referring back to a campaign promise.

In response, Senator Kirsten Gillibrand—co-sponsor of the proposed FAMILY Act and a presidential contender—called to see his hand and raise him one.

And it’s just been reported that Republican senators have met with Ivanka Trump to begin crafting a bill of their own. 

After years of fruitless discussion, federally-mandated paid family leave is suddenly a hot topic.  In the eyes of working parents, it’s about time. But what’s it mean for employers?

Americans Want Paid Parental Leave Benefits

The United States is the only industrialized nation that doesn’t mandate paid family leave for new parents. Of course, it doesn’t mandate paid sick leave for workers, either—see Part 1 of this series. 

According to a 2017 survey by the Pew Research Center, eight out of 10 Americans support paid family leave for new mothers. 69% also support paid paternity leave for new fathers. And 67% support paid family leave for employees caring for sick loved ones.

As a result, an increasing number of employers have added paid parental leave benefits. According to the Society of Human Resource Management’s 2018 Employee Benefits survey, 35% of participating employers now offer paid parental leave for mothers (up from 30% in 2017) and 29% offer paid paternal leave (up from 24% in 2017).  

And it’s not just for salaried workers, either. As the labor market has tightened, some large companies—like Walmart and Starbucks—have extended paid family leave to lower-wage hourly workers as a recruiting and retention tool.

The State of State Paid Parental Leave Legislation

In the absence of federal legislation, a growing number of states are considering their own paid parental leave laws. While just four states—California, New Jersey, New York and Rhode Island—have active laws on the books, lawmakers in 21 states are pondering legislation. Most of these proposals include paid family leave benefits to care for sick relatives, too.

Of course, every law is different. For example, in Rhode Island, workers receive about 60% of wages for up to four weeks, subject to a $795 maximum, while in California, workers receive 60-70% of benefits for up to six weeks, up to $1,252. For employers that operate in multiple states, achieving statutory compliance can be tricky.

What Would a Federal Law Look Like?

It’s hard to imagine what shape a federal paid parental leave law might take, especially since those proposed to date are so different in their approach. For example:

The Trump Administration’s Proposal

At one of his 2016 rallies, then-candidate Trump proposed providing six weeks of paid leave to new mothers, claiming funding would come from eliminating fraud in unemployment insurance programs. He included the proposal in his first budget, but it didn’t gain traction—perhaps because each state handles its own unemployment program. It’s unclear if it will be included in his proposed 2020 budget, to be released in March.

The FAMILY Act

In 2013, Senator Gillibrand first introduced the Family and Medical Insurance Leave Act, aka the FAMILY Act, which would pay new parents 66% of wages for 12 weeks. It would also cover employees with a serious illness and those caring for sick family members. The benefit would be funded by a 0.2% payroll tax paid by both the employer and employee—about the cost of a cup of a coffee per week for most employees—and be administered by the government. Gillibrand has reintroduced the bill every year and, now that she’s running for president, is advocating heavily for it.

Economic Security for New Parents Act

In August, 2018, Senator Marco Rubio introduced a bill that would allow new parents to access a portion of their Social Security benefits to finance their parental leave. He proposed delaying the date parents would begin receiving Social Security benefits to make up for what they withdrew. Because it means reducing retirement benefits, it was not particularly well received. However, it is anticipated that Republicans will focus on using existing programs to develop their own proposal. 

So, what happens now? Despite the fractured political climate, with both Republicans and Democrats seizing on this issue, it does seem possible that a federal paid parental leave law may become a reality—or closer to one. However, what that will look like, and what it may mean for employers, remains to be seen.

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Filed Under: Compliance, Workforce Management, Employee Benefits