On April 28, 2021, President Biden unveiled a Fact Sheet on the American Families Plan. The $1.8 trillion plan seeks to provide relief to American families. Part of the plan includes a proposal for paid family and medical leave.
Currently, under the Family and Medical Leave Act (FMLA), qualifying employees are permitted to take up to 12 weeks of unpaid leave for the birth or adoption of a child, for a serious health condition or to care for a family member with a serious health condition. The FMLA applies to all employers that employ 50 employees.
The Fact Sheet notes that a study found that unpaid family leave resulted in $22.5 billion each year in lost wages for workers.
In his address to Congress, President Biden discussed the paid leave component of the American Families Plan. He argued that the United States is one of the few industrialized nations that does not offer paid family leave. “No one should have to choose between a job and a paycheck or taking care of themselves or their loved ones, or their parent or spouse or child,” said Biden.
National paid family and medical leave plan
Under the plan, workers would receive a minimum of two-thirds of average weekly wages, up to $4,000 per month, for time off for the birth a child, to treat a serious illness, care for an ill family member, to handle a family member’s military deployment, or to handle issues related to sexual assault, stalking, or domestic violence. By the tenth year of the program, workers would receive 12 weeks of paid leave. The program also calls for three days of paid bereavement leave per year beginning with the first year of the program.
Funding for the American Families Plan, including paid leave, would be offset by tax increases on Americans making over $400,000 per year and the elimination of lower tax rates on capital gains and dividends.
State of the states. In the absence of a national program, several states have created state-administered paid family and medical leave programs.
- California. California has a Paid Family Leave program that is 100% employee funded.
- Connecticut. Effective January 1, 2022, the Connecticut Family Medical Leave program provides up to twelve weeks of paid leave through employee payroll contributions.
- Hawaii. Hawaii’s temporary disability insurance (TDI) program allows employee to paid leave for pregnancy and child birth. The program is employer-funded but allows for employee contributions.
- Massachusetts. The state’s Paid Family and Medical Leave program provides up to 12 weeks of paid leave. 100% of the contribution may come from employee wages. Employees must contribute up to 60% for paid medical leave. Paid family leave benefits began on January 1, 2021 and paid medical leave benefits will begin July 1, 2021.
- New Jersey. The Family Leave Insurance (FLI) program provides paid leave to care for the birth or adoption of a child and to care for sick family members. The program is funded by employees only.
- Oregon. Beginning in 2023, employees in Oregon may qualify for up to 12 weeks of paid family and medical leave. The program is funded by both employer and employee contributions. The state program requires employers with 25 or more workers to contribute towards the fund. Employers contribute 40% of the total rate.
- Rhode Island. The Temporary Caregivers Insurance (TCI) program provides up to four weeks of caregiver benefits to bond with a newborn, newly adopted child or new foster child, care for a seriously ill child, spouse or certain family members. The TCI program is funded through employee contributions.
- Washington. The state’s Family and Medical Leave Insurance program provides up to 12 weeks of paid leave for a new child or ailing family member. The program is funded by employer and employee contributions. Approximately 63% of the total premium is paid by employees.
National paid sick leave
In the Fact Sheet, President Biden also voiced his support for a national paid sick leave policy, noting that the COVID-19 pandemic highlighted this need. He urged Congress to pass the Healthy Families Act (S. 840) which would require employers with 15 or more employees to provide up to seven days of paid sick days per year to employees to recover from an illness, care for a family member, or seek treatment or preventative care.
State of the states. In the absence of a national program, several states have created state-administered paid family and medical leave programs.
- California. California has a Paid Family Leave program that is 100% employee funded.
- Connecticut. Effective January 1, 2022, the Connecticut Family Medical Leave program provides up to twelve weeks of paid leave through employee payroll contributions.
- Hawaii. Hawaii’s temporary disability insurance (TDI) program allows employee to paid leave for pregnancy and child birth. The program is employer-funded but allows for employee contributions.
- Massachusetts. The state’s Paid Family and Medical Leave program provides up to 12 weeks of paid leave. 100% of the contribution may come from employee wages. Employees must contribute up to 60% for paid medical leave. Paid family leave benefits began on January 1, 2021 and paid medical leave benefits will begin July 1, 2021.
- New Jersey. The Family Leave Insurance (FLI) program provides paid leave to care for the birth or adoption of a child and to care for sick family members. The program is funded by employees only.
- Oregon. Beginning in 2023, employees in Oregon may qualify for up to 12 weeks of paid family and medical leave. The program is funded by both employer and employee contributions. The state program requires employers with 25 or more workers to contribute towards the fund. Employers contribute 40% of the total rate.
- Rhode Island. The Temporary Caregivers Insurance (TCI) program provides up to four weeks of caregiver benefits to bond with a newborn, newly adopted child or new foster child, care for a seriously ill child, spouse or certain family members. The TCI program is funded through employee contributions.
- Washington. The state’s Family and Medical Leave Insurance program provides up to 12 weeks of paid leave for a new child or ailing family member. The program is funded by employer and employee contributions. Approximately 63% of the total premium is paid by employees.
In the Fact Sheet, President Biden also voiced his support for a national paid sick leave policy, noting that the COVID-19 pandemic highlighted this need. He urged Congress to pass the Healthy Families Act (S. 840) which would require employers with 15 or more employees to provide up to seven days of paid sick days per year to employees to recover from an illness, care for a family member, or seek treatment or preventative care.
State of the states. Currently, Arizona, California, Connecticut, District of Columbia, Massachusetts, Maryland, New Jersey, New York, Oregon, Rhode Island, Vermont, and Washington and several localities require employers to provide paid sick leave including, in some cases, time off for issues related to stalking, sexual assault, and domestic violence. The states of Maine and Nevada have laws that require certain employers to provide paid leave for any reason.
Why is this important?
If a national program for paid family and medical leave is established, it could mean that employers who are already currently providing such leave may no longer need to. It would be unclear if states currently running programs would need to continue their programs. Discontinuation of these programs would eliminate some costs for employers where states require employer contributions.
A national paid sick leave program would require more employers to provide paid sick leave with the threshold set at employers with 15 or more employees. States with paid sick leave requirements have varying thresholds, in some cases, set at a higher employee threshold.
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