Changes are coming to paid leave. Here’s what employers should know
A growing number of states and local governments are enacting their own paid leave policies. These new changes can be difficult for employers to navigate if they don’t understand the changes that are happening.
Adding to the confusion among employers, paid sick leave and paid family leave are often used interchangeably, when in fact there are some important distinctions. Paid sick leave is for a shorter time frame than paid family leave and allows eligible employees to care for their own or a family member’s health or preventative care. Paid family leave is more extensive and allows eligible employees to care for their own or a family member’s serious health condition, bond with a new child or to relieve family pressures when someone is called to military service.
The best-known type of employee leave is job-protected leave under the Family Medical Leave Act, where employees can request to take family medical leave for their own or a loved one’s illness, or for military caregiver leave. However, leave under FMLA is unpaid, and in most cases, employees may use available PTO or paid leave time in conjunction with family medical leave.
Rules vary by state, which makes it more difficult for multi-state employers to comply. The following is an overview of some new and changing state and local paid leave laws.
Paid sick leave
The states that currently have paid sick leave laws in place are Arizona, California, Connecticut, Maryland, Massachusetts, New Jersey, Oregon, Rhode Island, Vermont and Washington. There are also numerous local and city laws coming into effect across the country.
In New Jersey, the Paid Sick Leave Act was enacted late last year. It applies to all New Jersey businesses regardless of size; however, public employees, per diem healthcare employees and construction workers employed pursuant to a collective bargaining agreement are exempted. As of February 26, New Jersey employees could begin using accrued leave time, and employees who started after the law was enacted are eligible to begin using accrued leave 120 days after their hire dates.
Michigan’s Paid Medical Leave Act requires employers with 50 or more employees to provide paid leave for personal or family need as of March.
Under Vermont’s paid sick leave law, this January, the number of paid sick leave hours employees may accrue rose from 24 to 40 hours per year.
In San Antonio a local paid sick leave ordinance passed last year, but it may not take effect this August. The ordinance mirrors one passed in Austin that has been derailed by legal challenges from the state. Employers in these cities should watch these, closely.
Paid family leave
The five states that currently have paid family leave policies are California, New Jersey, Rhode Island, New York, Washington and the District of Columbia.
New York, Washington and D.C. all have updates coming to their existing legislation, and Massachusetts will launch a new paid family program for employers in that state. In New York, the state’s paid family leave program went into effect in 2018 and included up to eight weeks of paid family leave for covered employees. This year, the paid leave time jumps to 10 weeks. Payroll deductions to fund the program also increased.
Washington’s paid family leave program will begin on January 1, 2020, but withholding for the program started on January 1 of this year. The program will include 12 weeks of paid family leave, 12 weeks of paid medical leave. If employees face multiple events in a year, they may be receive up to 16 weeks, and up to 18 weeks if they experience complications during pregnancy.
The paid family leave program in Massachusetts launches on January 1, 2021, with up to 12 weeks of paid leave to care for a family member or new child, 20 weeks of paid leave for personal medical issues and 26 weeks of leave for an emergency related to a family member’s military deployment. Payroll deductions for the program start on July 1.
The Paid Leave Act of Washington, D.C. will launch next year with eight weeks of parental leave to bond with a new child, six weeks of leave to care for an ill family member with a serious health condition and two weeks of medical leave to care for one’s own serious health condition. On July 1, the district will begin collecting taxes from employers, and paid leave benefits will be administered as of July 1, 2020.
Challenging times ahead
An employer must comply with all state and local sick and family leave laws, and ignorance of a law is not a defense. Employers must navigate different state guidelines and requirements for eligibility no matter how complex, including multi-state employers and companies with employees working remotely in different jurisdictions.
These state disability programs are funded by employee payroll deductions, but employers must cover the costs of managing the work of employee who are out on leave. While generous paid leave policies can help employers attract talent, they simply don’t make sense for all companies. For example, it can be difficult for low-margin businesses to manage their workforces effectively when employees can take an extended paid leave.
Not only must employers ensure compliance with state and local rules, they also must make sure that their sick time, family and parental leave policies are non-discriminatory and consistent with federal laws and regulations. That’s a lot to administer.
Employers should expect to see the changes in paid sick leave and family leave laws to continue. In the meantime, companies should make sure they have the people and internal processes in place right now to track these changes and ensure compliance across the board.