Paid Leave Trends to Watch

This article originally appeared on the American Fidelity blog

It’s hard to guess exactly where paid family and medical leave (PFML) laws will be enacted next. Many states have study commissions to assess the feasibility, cost, and other impacts of prospective PFML legislation. Models to watch include:

State-run Program – the state provides and administers the benefits in this program model, with employers and employees often sharing the cost via payroll deductions. Employers may be able to offer a private equivalent plan alternative, and public employers can sometimes choose whether or not to participate
“Opt-In” Model – this model provides a purely voluntary alternative to a state-run program, making paid family leave insurance benefits backed by private carriers available to employers choosing to opt in by voluntarily offering coverage to their employees. The National Council of Insurance Legislators met in November 2022 to adopt the Paid Family Leave Insurance Model Act, which can serve as a blueprint for states pursuing a voluntary model
Tax Credit Model – to incentivize employers to make a paid family and medical leave benefit available to employees, some states are exploring tax credits to reimburse some or all of the employer’s costs
Public/Private Voluntary Model – New Hampshire pioneered this model, which covers all employees of the state government automatically, but allows private and local government employers to decide whether to join in purchasing family leave insurance coverage, with an option for individuals to opt in if their employer does not offer an equivalent benefit.

Paid Sick Leave

Fourteen states and D.C. currently mandate paid sick leave, including Arizona, California, Colorado, Connecticut, Maryland, Massachusetts, Michigan, New Jersey, New Mexico, New York, Oregon, Rhode Island, Vermont, and Washington. In two additional states, Maine and Nevada, laws require accrued paid time off that can be used for any purpose, including sick leave. One trend to keep an eye on is expansion of qualifying purposes under these laws beyond simple sick leave to include needs such as safe leave or kin care.

While paid sick leave requirements differ from state to state, these laws have several features in common.

First, they are usually accrual based, meaning that employees earn a certain amount of paid time off per increment of time worked.
Second, employees can generally use paid time off for minor illnesses, preventive care, and other health needs not amounting to a serious health condition – and thus not covered by the federal Family and Medical Leave Act.
Third, employers providing a bank of paid time off that meets or exceeds the state standard may be exempt from providing additional paid sick leave.

Paid Parental Leave for State Government Employees

Public employers are watching closely as state governments in the South consider expanding the paid leave benefits available to their employees to include leave for new parents. In 2019, North Carolina’s Governor signed an Executive Order to provide paid parental leave to cabinet level state employees, with non-cabinet level agencies able to opt in. On October 1, 2022, South Carolina began providing six weeks of parental leave to certain state employees, following Georgia’s lead, where a similar provision went into effect in 2021 for state, public university, and local boards of education employees. Similar bills have been introduced in other states such as Tennessee and Kentucky.

Bereavement Leave for Reproductive Losses

Lawmakers continue to explore and enact enhancements to existing leave programs, paid and unpaid, to provide benefits for reproductive losses including miscarriage and stillbirth. In Illinois, up to ten days of unpaid leave will be available beginning January 1, 2023, while in Utah city, county, and state employees can now receive up to three days of paid time off. With other states and cities considering similar “compassionate leave” policies, this is a legislative trend to follow.

What Should Employers Do Now?

If you live in one of the impacted states, review your leave of absence policies to make sure they match up with current legal requirements. Keep on top of new laws and regulatory changes that impact you. Managing new compliance requirements can make absence management so complex some employers need outside help. Decide if outsourcing some or all of these responsibilities makes sense for you.

^{This blog is up to date as of December 2022 and has not been updated for changes in the law, administration or current events.}