When the federal Family and Medical Leave Act (FMLA) was first proposed in 1990, President George H. Bush vetoed it as he questioned the need for a formal leave requirement, claiming that many employers already offer some form of paid and unpaid leave to employees. That “Thousand Points of Light Argument” didn’t convince Congress, so one of the first bills President Bill Clinton signed into law was the FMLA. That was 1993.
Since then, the American workforce has evolved, and many employers have responded to demands for greater workplace flexibility by creating benefit policies that permit time off for more reasons than permitted by the FMLA and various state leave laws. Still, many other employers simply provide what the law requires.
Beyond the eligibility for leave programs is the issue of affordability. FMLA is unpaid leave up to 12 weeks in a year. While many employers require employees to use accrued but unused paid leave time during FMLA, all or most of FMLA leave is unpaid. That presents a challenge for many employees who need to attend to medical and other family matters but can’t afford to be without a paycheck.
In recent years, advocacy groups have lobbied Congress and state legislatures for paid family leave benefits. Until recently, those efforts were rebuffed because of the expense involved and the questions about how that leave would be integrated with other employer leave policies.
Over the last two years, several states have adopted various forms of paid leave laws, including mandatory paid sick leave, parental leave and paternity leave. These were largely in response to the changing face and needs of the 21st century workforce (working parents, telecommuting, job sharing, an aging workforce, and the integration of disabled workers).
While over the last 10 to 15 years several attempts to expand the FMLA in Congress have stalled or died in committee, if they made it that far, lately there is traction in Congress for changes to FMLA.
U.S. Rep. Mimi Waters (R-CA) has proposed the Workflex in the 21st Century Act (HR4219). If passed and signed into law, this Act would give employers the choice of opting into a federal program that guarantees full- and part-time employees a minimum level of paid leave and flexible work options (including compressed work schedules, telecommuting or job sharing).
In exchange, employers, especially those with operations in more than one state, would gain predictability by following a federal standard for paid leave and workplace flexibility as they would also be exempt from the patchwork of all applicable state and local leave laws.
It is too soon to predict how that bill will fare in Congress and whether it could withstand legal challenges, especially from states with generous leave laws, but it is worthy of note that this bill has, at least for now, some support from both sides of the aisle. In the meantime, several states, including Vermont and Massachusetts, have adopted new paid leave laws, continuing the trend of recent years of states stepping up because of the stalemates in Congress.
In the current session of the NH Legislature, bills have been introduced to adopt mandatory minimum sick leave benefits, require payouts of accrued vacation and expand maternity leave protections. The prospects of the bills remain uncertain but another bill creating a paid family leave program under NH law has surprising support in the Republican-controlled legislature.
On Feb. 8, the NH House of Representatives passed (by a narrow margin of five votes) HB628, a bill that would create a voluntary family and medical leave insurance (FMLI) program. This bill would set up a trust fund within the Department of Employment Security into which employees (not employers) can pay a small portion of their wages, which they would then be eligible to apply for to cover 60 percent of their pay when they are out on FMLA leave. There have already been concerns voiced about the program’s sustainability.
An earlier version of the bill passed the House Labor, Industrial and Rehabilitation Services Committee but failed to pass the House Commerce Committee because of those and other concerns, which have since been addressed in amendments to the bill. The version of the bill that passed shortened the FMLI from 12 weeks to 6 weeks and increased the premium as a percentage of an employee’s pay from one-half of 1 percent to 1 percent. The program is still subject to further review as to its financial viability.
As of March 20, the bill was still before the House Finance Committee, which is looking at the structure of the law, how it would be funded and administered as well as the effect on employers and employees.
For the first time, there is real momentum behind the concept of paid family leave—something that would have been unheard of a few years ago. At the same time there is a growing challenge from human resources professionals and other business leaders who believe the bill, if passed, could be more of a burden on employers and less of a benefit to employees than originally intended.
Among the concerns raised are: the requirement for all employers to provide short-term disability insurance; the need to withhold employee premium contributions for family and medical leave insurance and accounting for those withholdings before they are turned over to the state; and managing the required leave programs in addition to the employer’s existing programs.
Attorney James P. Reidy is a partner at Sheehan Phinney in Manchester, where he is the chair of the firm’s Labor and Employment law practice group. For more information, visit Sheehan.com.