With the vast majority of employees expressing how important benefits are to their overall job contentment, organizations must engage in strategic benefits planning to increase employee-satisfaction. One way of achieving this is by offering paid leave to workers. Paid leave policies benefit businesses in a variety of ways, such as through reduced turnover rates, increased worker productivity, improved employee morale, and a competitive lead over employers who do not support paid leave programs. This newsletter is intended to provide an overview of current paid leave benefits, who is impacted by paid leave policies, and the potential changes to paid leave across the nation.
It is inevitable that employees will need time away from work, which is why the Family and Medical Leave Act (FMLA) was passed, requiring organizations with 50+ employees to offer their workers up to 12 weeks of unpaid leave for certain family and serious medical reasons. While this law protects a worker’s job and group health benefits, it does not guard them against the financial burden of sudden income loss. Realizing this deficit, many organizations offer paid sick leave and personal days to their workers; however, they must absorb the cost and stress of doing so. Multi-jurisdictional employers face an additional challenge, as they must balance different state mandates.
Currently, there are 14 states that have paid leave mandates or programs in place (AZ, CA, CT, DC, MD, MA, MD, MI, NJ, NM, OR, RI, VT, and WA). The D.C. Universal Paid Leave Act, for example, has incredibly broad reach. In brief, the Act creates a paid leave system funded by employers for those employed in D.C. “Covered employers” are required to contribute an amount equal to a 0.62 percent payroll tax of the annual gross wages of each of their covered employees to the Universal Paid Leave Implementation Fund. The contribution amount is in addition to any other benefits provided to employees, such as short-term disability and paid sick leave. The Act requires employers to start paying into the Fund on July 1, 2019, and employees will be eligible for leave benefits beginning July 2, 2020.
There are also several state localities that offer paid leave to their workers. In the DMV region, Montgomery County, MD has enacted its own paid leave law. Virginia has yet to enact a paid leave policy, but it has been proposed by state lawmakers. The uptick in states pushing for federal legislation that protects their workers has sparked a national interest in paid leave programs. However, there are several points of contention associated with the implementation of a national paid leave policy. To support paid leave on a federal scale, the financial responsibility of implementing such a policy must be determined—whether the funding come from the employee, employer, or government. Working out the details of who will absorb the cost of a federal paid leave policy, what share of their salary employees will receive during leave, and how much time off employees should get are all factors to be considered.
Regardless of employer size or location, paid leave law is beginning to adapt to the growing needs of the nations’ workforce. If you are interested in knowing more about paid leave, reach out to one of our expert team members today!