10 questions employers should ask before offering paid family leave

Published
  • February 02 2018, 11:15am EST
New York is the latest state to issue mandatory paid family leave, but in areas where its still optional, brokers may want to discuss with their clients about offering paid family leave to put them ahead of the curve.

To help clear up some of the questions clients are sure to have when advising them on the topic, Breanna Scott, director of product and service development at The Standard, and Terri Rhodes, CEO of the Disability Management Employer Coalition break down 10 questions employers could have when preparing to offer paid family leave.

Overview

States such as New York are implementing their own regulations for businesses. But some employers may want to plan ahead before it becomes mandatory.

To help clear up some of the questions clients are sure to have when advising them on the topic, Breanna Scott, director of product and service development at The Standard, and Terri Rhodes, CEO of the Disability Management Employer Coalition break down 10 questions employers could have when preparing to offer paid family leave.

What are the benefits of adding PFL to an organization?

Rhodes says that employers who have implemented a program report a boost in employee retention, reduced turnover cost, see increased diversification among leadership teams, and improved employee morale within the workplace.

“Having a paid family leave policy reinforces an organization’s commitment to a family-friendly organization,” Rhodes says.“More importantly, what we are hearing is that there is more competition for talent these days and more millennials are seeking family-friendly policies that allow them to have more work/life balance.”

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What is the difference between PFL and paid parental leave?

Paid parental leave is specific only to new mothers, fathers and adoptive parents. This policy is contingent upon a primary care-giver such as a mother, father, grandparent or legal guardian.

"The paid family leave is much more difficult because some of the policies that organizations have versus mandates states have in place define family in different ways [which differ from state to state]," Rhodes says. "Generally speaking, a paid family leave policy would include a domestic partner, child and any step children or step relationships that may exist within the family."

Can disability benefits and PFL work together?

Having the ability to utilize disability benefits alongside a paid family leave benefit is dependent upon the PFL policy in place with the employer and the state the company resides in.

"New York's paid family leave plan says that employees cannot receive their statutory paid disability leave benefit and their paid family leave benefit at the same time," Scott says. "It does allow for the benefits to be stacked such as a new mother taking advantage of disability leave to recover from delivery and then taking paid family leave time for bonding with the child."

How does mandated PFL differ from state to state?

For states such as California, Rhode Island and New Jersey, the mandated paid family leaves remain relatively similar. Similar to utilizing statutory disability benefits with PFL, each case must be taken on a state-by-state basis, but Scott says from a high level they remain the same.

"All of these states have a statutory disability plan and their paid family leave plans are covering and expanding on new child bonding or taking care of a relative," Scott says. "There are different definitions on what is considered a close relative, but at a high level, that is included under PFL."

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What happens if clients already have PFL and the state is implementing its own mandate?

Scott says this is a key area where brokers can take the lead with their employers because they can assist in reviewing their client's PFL policy and cross-check it with the state mandate being implemented.

"If brokers are proactively able to set themselves apart by monitoring statutory and regulatory changes within the state, they can update their clients as programs change," Scott says.

As long as the employer's PFL policy remains in compliance or goes above the needs of the state mandate, employers should not be in danger of legal repercussions.

Who pays for the cost of employee-funded PFL?

Under some state mandated PFL, there is shared cost between the employer and employee. For employers under a state mandated policy, the employee would pay their share of the cost through a payroll tax or deduction.

"In California, you can have a voluntary [PFL] plan, but also have the state mandated paid family leave plan," Rhodes says. "There are some mandates that have to be complied with, but there can be a company policy that requires internal coordination regarding payment of the benefit."

Can employers pay for PFL instead of employees?

Under a company provided PFL policy, excluding state mandate, employers can cover 100% of the benefit cost; however Scott says the employer is not required to pay the full amount of the cost if they choose.

“For the employers who has opted to provide benefits above the state plan, but are offering a paid family leave plan [that complies with state mandated requirements], they may determine the employee contribution amount,” Scott says.

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What do multi-state employers need to know?

For employers who have multiple business locations across the United States, there are variants involved that determine who is eligible for PFL based on the number of hours worked per week, how much the employee is paid and which family members are covered.

To ensure the company PFL policy complies with mandates for the state the employer’s business is located in, Rhodes says the policy should be overarching to ensure all regulatory needs are met and those employees outside of state mandates are still receiving the same opportunities.

"California's paid family leave is different from New York's or New Jersey's because the dollar amount is different," Rhodes says. "Employers need to coordinate payments to ensure their policy stays up-to-date with their pay practices and what each state is mandating."

How is PFL affected by the ADAAA?

The ADAAA only comes into play when it is attempting to make accommodations for an employee who has required conditions as to when they can return to work and at what capacity can they contribute to the business.

Scott says the PFL should not have involvement with ADAAA regulations, except if the employee is suffering from an illness while attempting to care for a relative that falls under the PFL requirements.

“In the cases where there is overlap between PFL and ADAAA, the employer should be actively working to figure out how to accommodate the employee to return them to work after leave,” Scott says.

Is there a chance for a nationwide PFL mandate in the near future?

There have been several pieces of legislation proposed in Congress such as the FAMILY Act, which has been read to the Senate twice. Scott says that bill will continue to make its way through the legislative process, but for the time being employers should focus on their individual state mandated policies or voluntary PFL policies within the states that do not have mandates.

"Any type of legislation will need to be passed and we are not at a point currently for immediate national implementation [of a paid family leave mandate]," Scott says. "The FAMILY Act would align with the same leave types as the Family and Medical Leave Act and would provide up to 12 weeks of paid time-off up to 67%."