Employee Financial Fitness: Paid Family Leave - Disability Management Employer Coalition (DMEC)

Paid Family Leave: The Changing Landscape

By Phil Bruen

VP Group Life and Disability Products
MetLife

About one in four Americans have taken leave to care for a relative with a serious health condition.¹ Additionally, 25% of employees anticipate having to take a leave in the future for the same reason.¹

While the Family and Medical and Leave Act of 1993 guarantees workers up to 12 weeks of unpaid leave per year without the threat of losing their job, the United States is the only developed nation that doesn’t mandate paid family leave.

In 2016, only 13% of civilian workers had access to paid family leave (PFL),² leaving 87% of workers without income while caring for a loved one or bonding with a newborn child.

The Current State of PFL

Three states today require PFL: California, New Jersey, and Rhode Island. New Jersey offers both state-sponsored and privately insured options for employers while California offers a state or a private self-insured option. Rhode Island administers its program with no private insurance option.

The remaining states have major gaps in protection. The Family Act of 2015 was re-introduced in February 2017 as the Family and Medical Insurance Leave Act to create a comprehensive, national program to help meet the needs of employees requiring time away from work, while helping make it affordable for employers of all sizes to offer PFL. If this bill is passed into law with the funding needed to implement it, many employers will be affected.

On the Forefront of Change

Several states have already passed or proposed their own laws. New York has made it mandatory to offer PFL by coupling it with the NY State Disability Benefit Law beginning Jan. 1, 2018. The law starts with eight weeks of PFL in 2018 and increases to 12 weeks of PFL for covered employees by 2021.

The NY Department of Financial Services released its final PFL regulations on May 30, 2017, and the NY Workers’ Compensation Board was expected to publish final regulations in June or July, 2017. Over the next few years, we anticipate increased legislative and rule making activity as more states and municipalities look to add PFL programs.

Creating Opportunities

Many employers have already added or expanded their PFL benefits, and Forbes predicts this trend will continue since several large companies added or enriched their paid leave policies in 2016.³ Employers view paid leave programs as an opportunity to attract and retain high caliber employees and maximize productivity among their existing employee workforce. Employers will need to continue to understand how their corporate paid leave programs integrate with these state and municipal paid leave programs being implemented.

Adults who are employed or looking for work value flexibility.⁴ Among those who have taken leave in the past two years or have considered it, having paid leave for family or medical reasons is cited as being the most helpful, more than any other benefit or work arrangement.⁴

The Future

Paid family leave programs are still a fairly new concept in the United States. As states develop their own requirements or a federal PFL law is passed, employers will have to adapt. Employers may want to consider working with an insurer or vendor that has the right family leave solutions to meet a variety of needs — and the experts to help them navigate the evolving regulatory environment.