It does not seem to be that long ago that our biggest challenge as administrators or employers was to comply with the Federal Family Leave Act of 1993 (FMLA). Prior to the FMLA, there were no federal requirements to provide occupational leave for the care of an employee’s own or family member’s illness, or for bonding with a newborn or newborn child, so the new law was a major change in how private companies were required to administer leave for employees.
At the time of the FMLA’s transition, it looked like it was the beginning of a change in leave benefits. I, and many others I spoke to at the time, assumed that it was only a matter of time before the employment protection requirements were extended to a larger pool of employees and that a federally paid holiday requirement would not be far behind. In reality, it took 15 years before the FMLA was even changed to include coverage for workers who needed to take time off related to family members in the military. Today, the law is still unpaid and not applicable to small employers.
So, what happened to mandatory paid leave for the leave periods covered by unpaid FMLA? Not much, in a very long time. Eventually, states moved to fill the gap in mandatory benefits.
PFL expands existing SDI programs
Five states – California, Hawaii, New Jersey, New York and Rhode Island – have had the State Mandate Disability Insurance Program (SDI) in place for many years. The programs provide employees with different levels of pay when they are disabled due to their own injury or illness. In 2002, based on the existing SDI framework, California was the first state to take action to address the issue of mandatory paid leave for family members. The state passed a law creating paid family leave (PFL) benefit financed by a payroll tax on employees, such as that used to finance SDI, and administered by the state. It took another six years before some other states followed California’s example.
But the next three states will adopt paid family leave – New Jersey 2008, Rhode Island 2013 and New York 2016 – followed a similar path by building on their existing SDI programs. As was the case in California, the new benefit programs only included paid leave for family members because the existing SDI programs addressed the need for paid leave to care for the employee’s own disability. Hawaii is the only state with an SDI program in place that has not added a PFL program – yet. There are currently four legislative proposals under consideration in the legislature to do just that.
Building the PFL programs using the structure of the existing state disability programs meant that employees were covered by a state fund and that the states administered the leave through their existing processes. California, New Jersey and New York also allowed employers to meet PFL benefit requirements through voluntary or private plans. However, California did not allow the use of voluntary plans until 2010and Rhode Island still requires paid leave for family members to be administered by the state. Allowing employers to use voluntary or private plans to administer the PFL benefits in eligible states meant that employers had more involvement in the leave process and could better coordinate the various leave benefits they provided to employees. This opportunity had not previously been available to them when California initially implemented the PFL.
Move from PFL to PFML & Beyond
In 2017, the District of Columbia adopted the next paid family vacation program. It was the first resort to create a PFL benefit without a state-mandated disability program to put on. As a result, the program includes both leave for an employee’s own illness – sick leave – and the traditional PFL, so it is a paid family and sick leave program (PFML). It was also the first locality to finance the benefit only through employer contributions. DC was the first resort to include both paid family leave and paid sick leave in a program.
All the remaining states that have introduced mandatory paid leave for private employees in recent years – Washington adopted 2017, Massachusetts adopted 2018, Connecticut adopted 2019, Oregon was adopted in 2019 with benefits available from 9/3/2023 and Colorado adopted in 2020 with benefits available from 1/1/2024 – has included paid leave for both medical and family reasons. This indicates that we are likely to see laws in the future that address both types of paid leave under a single program. We can also see an increase in the availability of paid leave in addition to paid leave for reasons related to domestic violence that are included in New Jersey, Connecticut, Oregon and Colorado.
Based on these, we are beginning to see some patterns emerge in how PFL / PFML laws will develop in the future. But there is always an exception to every rule.
In this case, the exception is New Hampshire (NH). Instead of adopting a mandatory PFML law applicable to private employers, NH enacted legislation to create a PFML program that will provide paid leave to government employees and allow other public and private employers and employees to participate voluntarily in the plan, which makes the concept of compulsory paid family and sick leave for private employees at its peak.
Details of exactly how the program would work are scarce, but the state recently issued a request for proposals (RFP) seeking a commercial insurance company to fully insure and administer the plan for the state. The RFP provided further insights into how the state envisages the benefit administration, but there are problems with what the legislation establishing the program says and what the RFP describes, so we will have to wait and see how these disconnections are resolved.
But we know if NH PFML is voluntary for private employers, which creates another variant for insurance companies, third-party administrators and employers to deal with. Finally, to add another twist to an already twisted path, there are currently two separate bills pending in the NH legislature to repeal the PFML law in its entirety.
What about federal paid leave?
A discussion on the status of the PFL / PFML arena would not be complete without a review of what is happening at the federal level. As I initially discussed, many of us believed that the adoption of the federal FMLA in 1993 would lead to the adoption of a federal PFML. Many efforts have been made over the years to make this happen, but none of them have been successful.
Some progress was made on federal paid family and sick leave in 2020 that stemmed from efforts to address the need for paid leave due to coronavirus-related care of an employee’s own illness or illness of family members, but these benefits were temporary and has since ceased to apply. For a brief period last year, it appeared that federal PFML advocates could advance PFML legislation as part of President Biden’s broad package of health, social and climate change policies, but again these efforts failed. President Biden and a majority of Democrats in Congress are still talking about creating a national program for paid medical leave for the family, but other priorities have so far prevented that from happening.
Addressing the operational challenges for PFL and PFML
So what does the state-level development of the types of benefits and requirements for insurance companies, third-party administrators and employers mean?
Angie Brown, Sales Director and Absence Practice Manager, and I recently hosted a roundtable discussion at the Disability Management Employer Coalition (DMEC) 2022 FMLA / ADA Compliance Conference to discuss that issue. It was clear from the participants’ comments that everyone struggles equally with the operational challenges of implementing and administering the state PFL / PFML laws that have resulted from the various approaches that states have taken to implementation and regulation. We are far from the simpler times when California initially implemented PFL. Each state that adopts a new PFML law adds its own “stamp” to the process – resulting in additional layers of complexity each time a new PFL / PFML law is adopted and implemented.
We shared our recommendation to focus on what measures they can take to influence legislation and regulations at the state level to help reduce this extra complexity going forward. We talked to the participants about examples of laws and regulations written in ways that are not practical to administer and that create confusion for both employers and employees.
Assume that subject matter experts provide feedback on ongoing laws and regulations or show up at public hearings to share their expertise. In that case, legislators will often listen, and we will be able to avoid repeating the common mistakes we have seen. Our experience is that legislators and administrative authorities appreciate the commitment of the units concerned and want to work through areas of concern. We discussed options for sharing thoughts and proposals with government agencies without publicly expressing any concerns about PFL / PFML legislation, statutes or ordinances by working through coalitions or organizations representing relevant groups. Examples include working with the state chamber of commerce or employer groups at the state level.
However you choose to be involved, sharing your experience and expertise can make a difference in the end product that affects everyone who has a role in implementing, administering or using PFL / PFML.
As we await some action on the PFML at the federal level, it is likely that more states will take action to provide these benefits to their citizens. The latest example is Maryland. On March 30, 2022, the Maryland Legislature passed a bill that created a PFML benefit in that state. Governor Larry Hogan vetoed the measure on April 8, but the General Assembly voted to override the veto the next day. The benefit will be available under the new law from 1 January 2025.
Ideally, insurance companies, third-party administrators and employers would have offered their experience and expertise to lawmakers in Maryland when they wrote the bill, but now that we have a new PFML law to stand up for, you can take the advice that Angie and I were offered during the round table discussion. Reach out to lawmakers, contact the executive with comments, including sharing how, based on your experience with other PFL / PFML laws, what steps can be taken to simplify and streamline leave administration for the benefit of all and attend public hearings to comment proposed rules or cause concern.
State PFL / PFML laws will continue to be disseminated, but we can all take action to reduce the challenges they create and improve the experience for all.
 29 USC 2601, et seq .; 29 CFR Part 825  Cal. Unemp. Ins. Code 2601 § ff.  Overview of California’s Paid Family Leave Program, DE 2530 Rev. 5 (1-22) (INTERNET)  NJ Stat. Ann. 43: 21-25 § ff.  RI General Laws § 28-39-1 ff.  NY Workers’ Comp. lag 200 § ff.  Overview of California’s Paid Family Leave Program, DE 2530 Rev. 5 (1-22) (INTERNET)  RI General Laws § 28-39-1 ff.  DC code Ann. § 32-541.01 ff.  Wash. Reef. Code 50A Revised Code of Washington (2022 Edition)  Mass. General Laws Ch. 175 million family and sick leave (The General Laws of Massachusetts (2022 Edition))  Conn. General Stat. 31-49e and following. (General Statutes of Connecticut (2022 Edition))  ORS Chapter 657B Family and Sick Leave Insurance (Revised Oregon Statutes (2022 Edition))  CRS §§ 8-13.3-501 ff. (Colorado’s Revised Statutes (2022 Edition))