When Volvo recently introduced paid family and medical leave for its workers in the U.S., in a program that mimics federal programs in Sweden, the company was following a trend that’s been sweeping the U.S. for the past several years. Now, President Joe Biden has introduced provisions for paid family and medical leave in his American Families Plan. And Massachusetts Rep. Richard Neal has made a similar, potentially more extensive proposal in the Building an Economy for Families Act.
As Americans wait for federal programs, however, many states have adopted programs of their own, mandating paid family medical leave insurance paid for by employers or employees or split between the two.
“In 2017, New York was the first state since California to introduce a Paid Family Leave program,” says Michael Cohen, president of The DBL Center, a wholesale general insurance agency specializing in statutory benefits like short-term disability insurance and paid family medical leave. “New York’s PFL was the most robust in the country at the time. Now, states across New England have followed suit, with expectations that certain western states would also introduce programs to help new parents and workers caring for sick or disabled family members.”
The House Ways and Means Committee proposal from Neal indicated that states with existing (legacy) PFML programs could continue providing benefits in their state as long as they meet the requirements of the federal program, Cohen said. There would be a public program run through the U.S. Treasury Department. “There may also be a provision for employer-provided or private coverage options through insurance carriers,” Cohen said, pointing out that such private plans may afford better customer service and faster payouts, as has been the case in states that already offer a choice for private or state-provided options for disability and family leave coverage.
As of 2021, nine states and the District of Columbia mandate that organizations of a certain size offer paid family and medical leave to some workers, according to the Bipartisan Policy Center. In states that require PFL or PFML coverage, it’s typically offered to all full-time employees and some part-time employees that meet a minimum number of hours worked per week.
But what exactly is paid family medical leave? How is it different from the federal Family and Medical Leave Act (FMLA)? And who pays for it?
Understanding what you can receive in terms of income replacement if you are having a baby, adopting or fostering children or have to take time off to care for a loved one can help you budget for these contingencies.
PFL/PFML vs. FMLA: Understanding the Difference
Contrary to what many believe, paid family leave (PFL) and paid family and medical leave (PFML) programs are not the same as the federally mandated Family Medical Leave Act. The FMLA provides eligible employees with up to 12 weeks of unpaid, job-protected leave to care for:
- A newborn child within the first year of birth
- A newly adopted or new foster child within the first year
- A spouse, child or parent with a serious health condition
- Household duties while an active-duty military spouse, son, daughter or parent is deployed
It also protects an employee’s job if the employee has a serious health condition, the Department of Labor notes.
However, FMLA, which was passed in 1993 under then-President Bill Clinton, is not a paid benefit. It only secures that the person will have the same or equal job upon returning to work. Employees must rely on short term disability insurance coverage, savings or other means to replace their income while they are on leave.
PFL and PFML, on the other hand, offer paid leave concurrent with FMLA, which provides only job protection. The duration of coverage and the reasons to file a PFL claim are similar to the reasons people can receive job protection under FMLA — the two programs work together to provide both income and job protection. However, PFL and PFML are not federal programs, so they aren’t available across the country.
“Most people don’t realize this, but 37 states threw their hats in the ring this past election to pass Paid Family Leave acts on a state level,” Cohen stated in a press release regarding the expansion of these programs.
PFL, PFML, FMLA and Workers’ Compensation: Which Should You File?
PFL refers to leave employees can take to care for family members. PFML, on the other hand, also covers the employees if they are sick or injured.
“It’s important to note that workers’ compensation coverage, a federal mandate, covers employees if they become injured on the job or become sick as a result of conditions in their workplace,” Cohen says. For all other medical conditions that occur off the job, the worker would file for PFML or short-term disability insurance in states where it is available.
“New York and New Jersey offer PFL coverage separate from medical leave insurance, because the states also have state-mandated short-term disability insurance (DBL in New York and TDB in New Jersey) programs that cover illness or injuries to workers. Connecticut and Massachusetts roll short-term disability and family leave coverage into one program, called PFML,” Cohen explains.
Should the federal government introduce a paid family and medical leave program, it would cover employees in states that don’t already mandate PFL or short-term disability coverage.
Likewise, employees who file for either state-mandated benefits or, when it becomes available, federal PFML, are also protected by the Family Medical Leave Act (FMLA), a federal program that provides only job protection, not pay.
Which States Offer Paid Family or Paid Family Medical Leave?
In 2021, California, New Jersey, New York, Washington, Rhode Island, Hawaii, Washington, D.C. and Puerto Rico offer statutory disability plan or paid family leave plans. Massachusetts introduced a program in 2021. Connecticut will begin offering paid family leave and medical leave together in one benefit package beginning in 2022. Employers have already begun deducting premium payments for the programs.
States differ in the duration of the leave, the payout amounts and even how they define “family members.” For instance, Massachusetts’ PFML policy permits leave to care for anyone the worker considers to be “like family.”
All employers must post information about the programs in a visible spot for employees to see. “If you have specific questions about benefits available in your state, it’s best to speak with your HR department or benefits advisor,” Cohen advises. “When and if a federal program rolls out, we won’t see benefits paying out until 2023. Even then, it’s likely that employees will interface with their HR department or benefits advisor for guidance with claims.”
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