With a new president, a newly proposed American Families Plan, and with states staying the course with their state-run PFML initiatives, what does the national landscape for paid family & medical leave look like? Here, we explore the state of the national landscape for PFML as of the summer of 2021.
Current Paid Family & Medical Leave Programs in Place
There are 7 programs in place currently –
Please see our overview chart breaking down these programs, with three planned/in progress over the coming three years. Massachusetts is the newest state to launch a PFML program, on January 1, 2021, with
- Connecticut poised to begin its program in the next six months, on January 1, 2022,
- Oregon having delayed its planned program and to begin collecting contributions in January 2023 and pay benefits in September 2023.
- Colorado’s program, which was approved as a ballot initiative, to begin in 2024.
The number of states proposing new PFML programs has declined since last reporting from 16 to 9 with many of the 2020 legislative sessions not taking up the legislation in their respective last sessions. To see when a state has adjourned, has convened or is in session for 2021, please visit the 2021 State Legislative Session Calendar.
The 9 states that initiated a state-run PFML program in 2021 are
Some already appear to be dead in committee, in recess, or unlikely to be taken up during the balance of the year.
Competing Federal PFML Initiatives
On the national front, there are competing proposals for a federal program. President Biden proposed a paid family & medical leave program as part of his American Families Plan which essentially would provide up to $4,000 a month of wage replacement (66 2/3% of a worker’s average weekly wage, or potentially up to 80% for the lowest wage worker) for twelve weeks of bonding, family caregiving and their own medical leave/safe leave. Full benefits would be available in year 10 of a 10-year rollout period.
Rep. Richard Neal (D-Mass.), who chairs the House Ways and Means Committee, offered a similar piece of legislation as part of his Building An Economy for Families Act, providing up to 12 weeks paid leave and 85% of a worker’s average weekly wage (for the lowest wage worker) but without the long tail rollout – with this proposal benefits would begin in January 2023. Notably, it provides a solution for “legacy states” who already have a state program in place by grandfathering them in, if they’re as generous as his proposed federal program. There is discussion if there would be a private option. With Rep. Neal’s approach, the federal government would provide grants to partially reimburse the grandfathered state- and employer-programs that meet or surpass the federal requirements.
The Republicans on the Ways and Means Committee have offered an alternative, Protecting Worker Paychecks and Family Choice Act, providing the Paid Family and Medical Leave Tax Credit (45S) – which is essentially employer credit that is phased out over 5-years, and making the program generous for small businesses (defined as a minimum of 50 employees and $25 million in gross receipts). It adds a tax advantaged family savings account that families can use to save for and pay school expenses, child care, elder care, and to provide for wage replacement during parental or medical leave needs.
It is unclear whose plan, if any, may prevail and in what form a winning plan may emerge from negotiations. There are many issues to be ironed out – the size/scope of the paid leave, how to pay for it, and how it will impact the state-run programs already in place. Be sure to stay in the know on all things paid family & medical leave by subscribing to our updates! We will be sure to keep you posted in the months ahead.
This blog post is for informational purposes only and is not an offer of coverage or intended to provide legal counsel. Please consult with an appropriate professional for legal and compliance advice. Any PFL information is based on the applicable statutes and regulations and may change as regulations evolve or States issue guidance regarding Paid Family Leave regulations.
*The ShelterPoint family of companies operates under the “ShelterPoint” name strictly as a marketing name, and no legal significance is expressed or implied. The ShelterPoint family of companies consists of ShelterPoint Life Insurance Company, a NY-domiciled carrier, and its wholly-owned subsidiary ShelterPoint Insurance Company, a FL-domiciled carrier, depending on the state. ShelterPoint is a registered service mark.
ShelterPoint provides Paid Family Leave in New York and Massachusetts only. NY PFL and MA PFML underwritten by: ShelterPoint Life Insurance Company (principal office in Garden City, NY)