Efforts To Provide Paid Family Leave On The Rise
Originally Published In The May 2017 Orange County Lawyer Magazine
It has been over twenty years since the Family and Medical Leave Act of 19931 went into effect, requiring certain large employers to provide job-protected and unpaid leave to employees for certain medical and family reasons, including bonding time with a new child. At the time of this article’s publication, however, there is still no federal mandate for paid parental leave, despite that dozens of other developed nations provide for such a benefit—to new mothers and fathers alike. In both 2013 and 2015, federal legislation to provide paid family leave was introduced, but never made its way through the legislative process.2
In the meantime, many companies have stepped in to try to keep pace with the recent rising trend to provide paid family leave to employees. At least one company has publicly stated their intent in doing so was to stay competitive in a global market and to serve the American workplace. In conjunction with the birth of Mark Zuckerburg’s daughter, Facebook announced in late 2015 that it was extending its parental leave policy for full-time employees to cover four months of paid leave for all new parents.3 This news came after an announcement by Netflix in August of that year to provide unlimited paid leave to its salaried employees—both new moms and dads—during the first year after a child’s birth or adoption.4 Microsoft followed suit, announcing twelve weeks of paid leave for new parents.5
Amazon also announced its paid parental leave policy in late 2015 offering six weeks of paid parental leave for all new parents employed at the company for one year or more.6 In November 2015, Spotify announced it would offer six months of fully paid parental leave to all full-time employees.7 In 2016, the trend continued. Netflix expanded its parental leave policy to include hourly workers, offering them between twelve and sixteen weeks paid leave depending on their job.8 Other major companies, such as Deloitte, Hilton, Nike, Coca-Cola, Ikea, and Etsy, announced generous paid family leave policies throughout the year as well. Even the Pentagon announced in 2016 that it would provide twelve weeks of paid maternity leave for all uniformed service members.9
During the contentious 2016 presidential campaigns, both candidates notably supported paid family leave, albeit in different forms. Then Republican presidential nominee Donald Trump announced a plan for six weeks of paid maternity leave, through unemployment insurance, for new mothers whose employers do not guarantee paid leave.10 Democratic rival Hillary Clinton proposed to ensure that employees taking up to twelve weeks of leave through the Family and Medical Leave Act would receive at least two-thirds of their wages, up to a ceiling.11
Earlier this year, federal lawmakers announced plans to reintroduce paid family leave legislation that would create a universal, gender-neutral, paid family and medical leave program.12 In particular, the new law would provide workers with at least two-thirds pay (up to a cap) for up to twelve weeks of time off for their own health conditions, including pregnancy and childbirth, or to care for others. It would do this by creating an independent trust fund within the Social Security Administration to collect fees and provide benefits. The trust would be funded by employee and employer contributions of two-tenths of a percent of wages each, creating a self-sufficient program that would not add to the federal budget. Lawmakers behind the bill assert leave would be made available to every individual regardless of the size of their current employer and regardless of whether such individual is currently employed by an employer, self-employed, or currently unemployed, as long as the person has sufficient earnings and work history. As such, the law would apply to young, part-time, and low-wage workers. Given that President Trump has expressed support for government-mandated paid leave, there is more than a glimmer of hope for such a bill, which has not made strides in the past.
California passed the nation’s first paid leave law in 2002.13 The wage replacement portion of the federal paid family leave bill is modeled after successful state programs in California and New Jersey. California’s paid family leave program is not really a leave program, but rather a partial wage replacement program administered through the state’s disability system and not by employers. It is fully funded by employees’ contributions. It applies to all parents who take off time from work to bond with a child within one year of birth, adoption, or placement as a foster child. It also provides payments to people who take time to care for seriously ill family members. Citing how globalization has put pressure on wages and benefits, Governor Brown signed legislation in April 2016 that will increase the wage replacement rate under California’s program from its current level of fifty-five percent to sixty or seventy percent (depending on the worker’s income).14 Notably, however, Governor Brown vetoed a bill which would have required small businesses not covered by the Family and Medical Leave Act to provide six weeks of unpaid, job-protected parental leave.
Some cities and states have taken paid parental leave a step further. In April 2016, San Francisco passed an ordinance requiring employers with twenty or more employees (with at least one working in the city) to offer supplemental compensation to all employees, including part-time and temporary employees, who use California paid family leave benefits for new child bonding.15 The amount of supplemental compensation an employer would need to pay is the difference between the employee’s current normal gross weekly wage and state benefits received. Employers with fifty or more employees are required to comply beginning on January 1, 2017; employers with thirty-five or more employees are required to comply beginning on July 1, 2017; and employers with twenty or more employees are required to comply beginning on January 1, 2018.
Luckily for city employees, Seattle recently expanded paid leave for city employees who are new parents from four to twelve weeks and created a new four-week family leave policy for city employees who need to care for sick family members.16 Similarly, in Boston, city employees have been entitled to up to six weeks of paid parental leave since 2015.17 Boston’s ordinance applies to men and women, as well as same-sex couples. It also applies to each instance of eligible employees’ birth of newborns, adoption, surrogacy or other methods, and stillbirths.
In April 2016, New York state passed a paid family law that, when fully phased-in, will allow employees to be eligible for twelve weeks of paid leave when caring for an infant, a family member with a serious health condition, or to relieve family pressures when a family member, including a spouse, domestic partner, child or parent, is called to active military service.18 Paid leave to care for a new child will be available to both men and women, and will include leave to care for an adoptive or foster child. Implementation of New York’s paid leave law will be gradual. Beginning January 1, 2018, employees will be eligible for eight weeks of paid leave, earning fifty percent of their weekly pay (up to a cap). The number of weeks of leave and amount of pay increases annually until, by 2021, employees will be eligible for the full twelve weeks of paid leave, earning sixty-seven percent of their weekly pay (up to a cap). New York’s paid family leave will be funded by a weekly payroll tax of about $1 per employee, deducted from employees’ paychecks. As a result, employers will not have to bear the financial burden of funding the paid leave benefits provided under the new state law.
In December 2016, Washington, D.C. passed a universal paid leave ordinance which gives full- and part-time workers in the city eight weeks of leave at up to ninety percent of their full weekly wages for birth, adoption or fostering.19 The bill also provides for six weeks of family leave to look after a sick relative and two weeks for a personal medical emergency. The paid leave program will be funded by a new business tax that would raise $250 million a year to cover costs. Washington, D.C.’s ordinance covers only private-sector workers, excluding those on city or federal payroll. To qualify, a worker need only be employed in D.C.; residents of other cities and states with jobs in the capital are eligible. Non-profit workers and the self-employed are also covered.
Amidst the flurry of recent paid family leave activity at federal, state, and local levels, as well as from the business sector, many companies hoping to stay competitive, boost morale, and gain positive media attention, may find themselves wondering how they can get in on the action before they miss the boat. Before announcing any future paid parental leave policy, however, employers should consider and prepare for the implementation process of such a policy, as well as possible ramifications. For instance, employers should set up appropriate forms and acknowledgments in advance, and devise a protocol for management to follow in distributing and using these documents. Management and human resources should be trained on how to roll out the new policy, and understand what not to say when employees request to use leave.
Employers will want to consider whether they want to provide paid leave on a gender-neutral basis, for how long, and for how much pay. Employers are each uniquely situated and can come up with paid family leave plans tailored to meet their needs. Employers should also consider what eligibility criteria they want their employees to meet before taking leave, and whether the leave should be job-protected. They may also want to consider whether the paid family leave should run concurrent with other available leaves, and whether a third-party vendor, human resources, or managers will have the discretion to grant or deny leaves.
Sticky situations should also be contemplated and addressed. For instance, should the paid family leave policy be retroactive and apply to an employee whose baby was born before the policy was implemented? Is an employee permitted to use the leave intermittently? If so, what level of incremental use would the employer deem to be appropriate? What if an employee gives birth to twins? What if two employees have a child together? Again, each business may have its own reasons for coming out one way versus the other on these issues. The point is, it is better to deal with the tough questions before they become employee relations problems.
Last but not least, it is always critical to review a company’s proposed paid family leave policy with an eye towards litigation—both single-plaintiff and class action cases. More often than not, classes get certified based on written policies alone. It is also possible that employees could make discrimination claims with respect to the implementation of the policy. In defense of those claims, the requisite forms and acknowledgments should be helpful to minimize risk in that area.
Endnotes
(1) Family Medical Leave Act (FMLA) of 1993, 29 U.S.C. § 2601 (2012).
(2) Family and Medical Insurance Leave Act of 2013, H.R. 3712, 113th Cong. (2013); Family and Medical Insurance Leave Act, S. 786, 114th Cong. (2015).
(3) Kristy Woudstra, Facebook Parental Leave: the Company Expands Its Policy, Huffington Post (Nov. 30, 2015), http://www.huffingtonpost.com/2015/11/30/facebook-parental-leave_n_8683198.html.
(4) Heather Kelly, Netflix Employees Can Now Take Unlimited Paid Parental Leave, the Company Announced Tuesday, CNN (Aug. 5, 2015), http://money.cnn.com/2015/08/04/technology/netflix-parental-leave.
(5) Julia Greenberg, Microsoft Offers Big Upgrade to Paid Leave for New Parents, Wired (Aug. 5, 2015), https://www.wired.com/2015/08/microsoft-offers-big-upgrade-paid-leave-new-parents.
(6) Martin Berman-Gorvine, Amazon Expands Parental Leave Offerings, Bloomberg (Nov. 16, 2015), https://www.bna.com/amazon-expands-parental-n57982063587.
(7) Emily Peck, Spotify’s New Parental Leave Policy is Pretty Amazing, Huffington Post (Nov. 19, 2015), http://www.huffingtonpost.com/entry/spotify-parental-leave_us_564de6c7e4b08c74b73483fe.
(8) Shane Ferro, Netflix Just Made Another Huge Stride on Parental Leave, Huffington Post (Dec. 9, 2015), http://www.huffingtonpost.com/entry/netflix-paid-parental-leave-hourly-workers_us_56685ae1e4b009377b233a79.
(9) The Editorial Board, The Pentagon’s New Parental Leave, N.Y. Times (Feb. 2, 2016), https://www.nytimes.com/2016/02/02/opinion/the-pentagons-new-parental-leave.html.
(10) Heather Long, Many Women Voted for Trump. Will He Keep His Promises to Them?, CNN Money (Dec. 6, 2016), http://money.cnn.com/2016/12/06/news/economy/donald-trump-childcare-maternity-leave/.
(11) Megan A. Sholar, Donald Trump and Hilary Clinton Both Support Paid Family Leave. That’s a Breakthrough, The Washington Post (Sept. 22, 2016), https://www.washingtonpost.com/news/monkey-cage/wp/2016/09/22/donald-trump-and-hillary-clinton-both-support-paid-family-leave-thats-a-breakthrough/?utm_term=.0c8de2f5ab23.
(12) Family and Medical Insurance Leave Act, S. 337, 115th Cong. (2017); FAMILY Act, H.R. 947, 115th Cong. (2017).
(13) Cal. Unemp. Ins. Code §§ 2601, et. seq. (2004).
(14) Patrick McGreevy, Brown Signs California Law Boosting Paid Family-Leave Benefits, Los Angeles Times (Apr. 11, 2016), http://www.latimes.com/politics/la-pol-sac-paid-family-leave-california-20160411-story.html.
(15) San Francisco, Cal., Police Code §§ 330H.1, et. seq. (2016).
(16) Office of the Mayor, Mayor Murray, Council Enact Twelve-Week Paid Parental Leave, Increased Wage Transparency for City Employees, Office of the Mayor (Feb. 13, 2017), http://murray.seattle.gov/mayor-murray-council-enact-12-week-paid-parental-leave-increased-wage-transparency-city-employees/.
(17) Andrew Ryan, City Council Approves Paid Parental Leave Measure, The Boston Globe (Apr. 29, 2015), https://www.bostonglobe.com/metro/2015/04/29/city-council-approves-paid-parental-leave-for-municipal-employees/6JZ4eVovEtrX7CKDWgWKhP/story.html.
(18) Emily Peck, New York Just Passed America’s Best Paid Family Leave Law, The Huffington Post (Apr. 4, 2016), http://www.huffingtonpost.com/entry/new-york-paid-family-leave_us_5702ae75e4b0daf53af042b7.
(19) Clare O’Connor, Washington, D.C. Passes Eight Week Paid Parental Leave Bill, Forbes (Dec. 20, 2016), https://www.forbes.com/sites/clareoconnor/2016/12/20/washington-d-c-passes-8-week-paid-parental-leave-bill/#6f5402bf6bfa.