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Momentum Continues to Grow For a Federal Paid Leave Law

Insight & Impact - Labor & Employment Newsletter Kelly Lyon Davis

ISSUE:

Change often starts on a local or state level, and that holds true with respect to paid time off laws. As employers with multi-state operations can attest, the patchwork of state and local paid leave laws that has emerged in the last five years has created compliance difficulties for some employers. Covered federal contractors that are also dealing with paid sick leave under Executive Order 13706 have additional obligations to manage. Legislative efforts on the federal level could alleviate some of the complications of being a multi-jurisdictional employer if a federal paid leave law is passed and preempts existing state and local laws. There are several competing partisan proposals before Congress.

Sponsored by Democrats, the “FAMILY Act” proposes up to 12 weeks of paid leave each year for the birth or adoption of a child, the serious illness of a family member, or a worker’s own medical condition. Employees would receive two-thirds of their regular pay, capped at a maximum of $1,000 per week. This proposal would be paid by payroll contributions from all employees, with the maximum contribution from a high wage earner of under $230 per year.

The “Healthy Families Act” would require employers to allow employees to accrue paid sick time based on the number of hours worked, up to 7 paid sick days per year. Employees would be permitted to use the time for their own medical needs, to care for family members, or to seek medical attention, leave assistance, or certain other activities related to domestic violence, sexual assault, or stalking. Small employers (fewer than 15 employees) would not be required to provide paid sick time, but must provide at least 56 hours of unpaid sick time if the employer chooses not to offer paid leave.


Read more Insight & Impact from September 2018:


Republicans likewise have two pending proposals. Introduced in August, the “Economic Security for New Parents Act” would amend the Social Security Act to provide employees with an option to obtain paid leave for the birth or adoption of a child. This optional leave would be paid through an advance of the employee’s social security benefits, but would delay the individual’s eligibility for social security retirement benefits.

The second Republican proposal is the “Workflex in the 21st Century Act” which combines both paid leave and certain requirements to provide more workplace flexibility for employees. This legislation would amend ERISA and preempt state and local paid leave laws. The bill has various requirements for paid leave and flexible work options, with between 12 and 20 days of paid sick leave depending on the size of the company and the employee’s length of service.

IMPACT:

While most commentators think change is coming, they do not expect any of these bills to pass in this Congress. Federal contractors must also be mindful of their paid sick leave obligations under Executive Order 13706. Therefore, employers should continue to track and comply with paid leave developments on the state and local level as the federal showdown over paid leave unfolds in the coming months and, potentially, years.

For additional information, please call your local Quarles & Brady attorney or contact