Paid Family Medical Leave Acts (PFMLA) have gained adoption across the country with eight states having adopted the plans: California, Connecticut, New Jersey, Oregon, Rhode Island, New York, Washington, and Massachusetts. However, states are seeing deadlines delayed as implementation proves more difficult than legislators initially planned.
What are Paid Family Medical Leave Acts?
Paid Family Medical Leave Acts (PFMLA) refer to legislation enacted by states and sometimes cities that provide for paid leave for eligible employees to care for family members in a variety of scenarios. PFMLA can look like paid, job-protected time off to care for and bond with a newly born, adopted, or fostered child or care for a family member with a serious health condition. The paid leave is funded through payroll taxes levied on employees and often employers. Exact details vary by state program.
What difficulties have states had with PFMLA?
Most recently, Massachusetts has struggled to enact legislation aimed to make several changes to the state’s Paid Family and Medical Leave Act, having recently delayed the implementation of their program. Massachusetts wanted to ensure that businesses had adequate time to implement the state’s Paid Family and Medical Leave program and as such, the House, Senate, and Administration agreed to adopt a three-month delay to the start of required contributions to the program. The state also committed to adopting technical changes to clarify the program design. Prior to enacting it’s PFML program, Massachusetts had no existing temporary disability insurance infrastructure, making such a wide-scale initiative difficult to build from scratch. Massachusetts PFML program was to be funded through a payroll tax, scheduled to take effect on July 1, 2019, but this was delayed three months until October 1, 2019. To compensate for the shorter amount of time to collect contributions to the fund, The Massachusetts Department of Family and Medical Leave (DFML), which is the agency established to run the program, will be increasing the contribution rate from 0.63% to 0.75%. The Massachusetts DFML is scheduled to begin paying benefits on January 1, 2021. You can find a full implementation schedule on the Massachusetts Department of Family and Medical Leave website.
Massachusetts’s Paid Family and Medical Leave law will give eligible workers up to 12 weeks of paid family leave and up to 20 weeks of paid medical leave. The program will be funded by premiums paid by employees, employers, and the self-employed. Exemptions are available by application for employers who feel their paid leave benefits are equal to or greater than those provided under Massachusetts’s new PFML program. Employers with fewer than 25 employees are not responsible for paying the employer contribution of the tax.
Earlier this fall Washington state also delayed its PFMLA reporting deadlines and premium payments from the first two quarters of the year. Initially the deadline for employers to submit quarter one and quarter two reports was July 31, 2019. They extended the deadline to August 31, 2019. Requirements under PFMLA for Washington’s employers began on January 1, 2019.
Oregon is the most recent state to implement a Paid Family and Medical Leave Act having only recently signed their program into law on August 26, 2019. Having observed the challenges of states who implemented similar programs prior, Oregon has taken a longer-term view of their Paid Family and Medical Leave legislation, called “FAMLI.” The law has several "operative dates," with employees being eligible to claim benefits starting on January 1, 2023. FAMLI provides employees with paid time off for up to 12 weeks per year and is funded by both employee and employer contributions. Employers with fewer than 25 employees are exempt from having to contribute to the employer portion of the tax. FAMLI became effective on September 29, 2019 and by September 1, 2021 the Employment Department, which is implementing the act, is to issue rules governing the administration of the program. Contribution to FAMLI are to start January 1, 2022 and benefits will become available on January 1, 2023.
Connecticut also has a later timeline and will begin taking employee contributions on January 1, 2021 and will begin paying benefits on January 1, 2022. Unlike other states, Connecticut’s PFML funding comes entirely from employees, with employers not contributing.
As the remaining states—California, New Jersey, Rhode Island, and New York—continue the implementations of their Paid Family and Medical Leave Acts it will be interesting to see how many additional states jump on board and whether or not the states are able to stick to their anticipated timelines.