5 Trends in State and Federal Paid Leave of Absence Proposals

While most private sector employees have access to paid sick time, according to the U.S. Bureau of Labor Statistics, a whopping 57% of these workers have no access to paid family and medical leave or short-term disability insurance to cover their pay when they need to take extended time off from work for medical reasons. In fact, only about 10% of the bottom 10% of earners have access to this coverage. Let’s explore some important trends in state and federal paid leave of absence proposals to address these and other discrepancies.

No Federal Laws for Paid Family and Medical Leave

Currently, there is not a single law on the books providing federal paid leave for medical or family reasons. The Family and Medical Leave Act of 1993 (FMLA) provides only a guarantee of unpaid medical leave, but that leaves workers who take advantage of it without the means to pay bills while off work.

Some proposals have been advanced, one as recently as the Build Back Better Act. This dovetailed with a long-standing proposal for the Family and Medical Insurance Leave Act. Democrats attempted in 2021 and 2022 to put forth federal paid leave proposals, but they fell short of the necessary support to push them through.

Biden’s 2023 Federal Paid Leave Proposal

In March 2023, President Joe Biden put forth a proposal for a $325 billion commitment to permanent paid family and medical leave at the federal level as part of the 2024 fiscal year budget. When pushing for the package, Biden pointed out that the United States is the “only major economy without national paid leave.” As with most proposals of this type, it is unlikely to find its way to acceptance by Congress.

New Bipartisan Proposal

Since March 2020, federal paid family leave has been reduced or dropped a whopping five times, almost always supported on a party-line basis. A new proposal from the Bipartisan Policy Center has now arisen that seeks to dig through existing law and proposals to create a framework for new bipartisan legislation. Currently, the team consists of six members — three Republicans and three Democrats.

This proposal may have the best chance to succeed where others have failed, but the Bipartisan Policy Center has only begun to negotiate. They hope to have a full bill to present to Congress within the next year or two.

States' Paid Leave Laws

Eleven states and the District of Columbia have passed their own family and medical leave laws. These include Washington, Rhode Island, Oregon, New York, New Jersey, Maryland, Massachusetts, Delaware, Connecticut, Colorado, and New Jersey.

Other states, such as New Hampshire and Vermont, have voluntary healthcare and medical leave laws. While these states do not guarantee paid leave, they provide the opportunity for workers to purchase insurance coverage that would offer it.

Michigan and Minnesota have taken steps toward introducing paid leave proposals with newly Democratic state legislatures. South Dakota is yet another state seeing voluntary models touted by GOP-led governments.

Individual Employer Support for Paid Leave

The Congressional Research Service produced a comprehensive report in 2023 that outlines the state of paid family and medical leave (PFML) at the federal, state, and individual levels across the nation. This report outlined how individual employers have taken up the responsibility of PFML with the promise of a federal tax credit, the Employer Credit for Paid Family and Medical Leave, which includes up to 25% of paid leave wages granted to qualifying employees. This tax credit, however, is only available through December 2025.

Improving the Quality of Care and Working Environment

There is little doubt in a world where people are looking for an improved work/life balance that a benefit like paid family and medical leave will help to avoid labor issues, reduce turnover-related overhead and help plan for future legal changes as a form of risk management.

Companies that get involved with such a policy now could pursue a tax credit and better prepare their operations for a time when new state and federal laws might take effect. LaborSoft can help with an all-in-one solution for your HR, employee relations, and labor relations needs. Get in touch with us to schedule a demo, or get started today.