Paid Family Leave – Helping or Hurting Employers?

HR teams across the country are dreading the compliance challenges associated with paid leave benefits as they become effective in certain areas across the nation. As we’ve mentioned before, there is limited national job protection for workers needing family leave. In fact, the U.S., with no mandate for paid leave, is in last place among developed nations. As a result, some states and localities have stepped in to respond to this need. Here in Frenkel’s home state of New York, Paid Family Leave (PFL) coverage becomes effective on January 1, 2018 and will be the most comprehensive PFL program in the country.

PFL is meant to protect working family members who need time off to care for other family members, and in New York it’s the employee who will pay a maximum of $1.65 per week out of their paycheck for access to these benefits. However, administration of these programs is very complex due to the coverage scenarios that could unfold and overlap with existing federal and multi-state disability laws. Due to complexity, many employers are choosing to outsource leave management altogether.

Recently, three Republican House members (whose states offer paid family and paid sick leave) introduced legislation that could preempt the state laws. Through this bill – Workflex in the 21st Century Act – employers who offer certain amounts of paid time off including a guaranteed paid leave benefit and a flexible work option (for example, telecommuting or job-sharing), would be exempt from complying with state paid leave laws.

The bill is backed by Society for Human Resource Management (SHRM), who points to conflicting paid leave laws that are increasingly burdensome and complicated for employers to manage. While the objective of this bill is to achieve federal involvement that simplifies administration of paid family and sick leave, if passed, it would likely leave employers wondering where (and when, and who, and how) they stand with their required offerings. As our clients in New York wrap up an enrollment season which included extra effort to introduce PFL, we’ll continue to monitor legislation and prepare our clients accordingly.

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