December 18, 2018
As a growing trend, states across the country are enacting paid employee leave laws. Recently, three states (Massachusetts, New York and Washington) and the District of Columbia have enacted paid family and medical leave laws:
In general, these laws allow employees to take paid time off from work to care for an injured or ill family member or for their own medical condition. Each of these programs has its own rules for covered employers, qualifying reasons for leave and amount of paid leave. Employers in these states should become familiar with their compliance obligations.
A high level summary of each of these laws is reflected in the tables below.
Note that California, New Jersey and Rhode Island have disability insurance laws that provide wage replacement benefits for family leave. However, these laws are distinct from the paid family and medical leave laws discussed in this document.
Employers with employees in these states should become familiar with their compliance obligations. New York's paid family and medical leave law is currently in effect. However, employers in Washington, Massachusetts and the District of Columbia must begin contributing to their state's paid leave program in 2019. Specifically, payroll deductions for employees in Washington state must begin on January 1, 2019, whereas, in Massachusetts and the District of Columbia, deductions will begin on July 1, 2019.
District of Columbia
Covered employers: All District employers
Eligible employees: To be eligible, an employee must have spent more than 50 percent of his or her work time working in the District during some or all of the 52-week period before the leave event.
Paid leave duration: Paid leave is limited to eight weeks during any 52-week period in any combination of the following leave types:
Paid leave benefits: 90 percent of the employee's average weekly wage for an employee who earns equal to or less than 150 percent of the District's minimum wage.
An employee who earns a wage that is more than the 150 percent of the District's minimum wage is entitled to receive paid leave benefits at a rate that equals (i) 90 percent of 150 percent of the District minimum wage; plus (ii) 50 percent of the amount by which the employee's average weekly wage rate exceeds 150 percent of the District minimum wage.
All eligible workers are limited to a maximum weekly benefit of $1,000, adjusted for inflation beginning October 1, 2021.
Program funding: Effective July 1, 2019, covered employers will be required to make contributions of 0.62 percent of the wages paid to eligible employees. These contributions will be pooled into a collective fund for the paid leave program.
Benefit administration: The District's paid family and medical leave benefits will be administered by the District of Columbia Office of Paid Family Leave.
Covered employers: All employers. Employers with fewer than 25 employees are not required to pay the employer portion of family and medical leave premiums.
Eligible employees: Virtually all employees working in the state.
Paid leave duration: The paid family and medical leave program provides the following leave amounts during the benefit year (defined as the period of 52 consecutive weeks beginning on the Sunday immediately preceding the first day that paid family and medical leave commences):
Paid leave benefits: 80 percent of the employee's salary up to 50 percent of the average weekly wage, plus 50 percent of the employee's salary exceeding 50 percent of the average weekly wage, up to a maximum of $850 per week. Weekly benefit payments begin after an initial seven-day waiting period.
Program funding: The paid family and medical leave program is funded by a mandatory payroll tax of 0.63 percent of employees' wages, to be adjusted annually. The payroll tax will be split between employers and employees. However, for employers with fewer than 25 employees, no employer contribution is required for family or medical leave premiums.
Benefit administration: The state's paid family and medical leave program will be administered by the Massachusetts Department of Family and Medical Leave.
Covered employers: All employers with one or more employees in New York
Eligible employees: Any employee who works 20 hours or more per week if the employee works for a covered employer for 26 or more consecutive weeks.
A part-time employee (an employee who works fewer than 20 hours per week) is eligible for paid family leave after he or she has worked for a covered employer for 175 days.
Paid leave duration and benefits: When fully implemented in 2021, eligible employees may receive up to 12 weeks of paid family leave at 67 percent of their average weekly wages (AWW).
The duration and amount of paid family leave benefits will be phased in as follows:
Program funding: Paid family leave is funded entirely through employee payroll deductions. The employee contribution rate for coverage beginning January 1, 2018, is 0.126 percent of an employee's weekly wage, up to an annual maximum of $85.56. For 2019, employers may deduct 0.153 percent of an employee's weekly wages up an annual maximum of $107.97.
Employers are not required to contribute to or fund the paid family leave benefit.
Benefit administration: Paid family leave coverage is usually a rider to the employer's disability insurance coverage. For more information, see New York's Paid Family Leave: Information for Employers and Weekly Payroll Deduction Calculator.
Covered employers: All employers. Employers with fewer than 50 employees are not required to pay the employer portion of the premium to fund the program.
Eligible employees: Any employee who works at least 820 hours during the "qualifying period" is eligible for paid family and medical leave benefits. The qualifying period is defined as the first four of the last five completed calendar quarters or, if eligibility is not established, the last four completed calendar quarters immediately before the employee's application for leave.
Paid leave duration: The paid family and medical leave program provides the following leave amounts during a consecutive 52-week period:
Paid leave benefits: An eligible employee may receive up to 90 percent of his or her average weekly wage (AWW), based on the employee's AWW in comparison to the state AWW, up to the maximum weekly benefit, as follows:
In any case, the maximum weekly benefit for paid family and medical leave is $1,000, adjusted annually beginning September 30, 2020.
Program funding: The paid family and medical leave program will be funded with employer and employee payroll contributions. Beginning January 1, 2019, through December 31, 2020, the total premium amount is 0.4 percent of an employee's wages.
Employers with fewer than 50 employees employed in the state are not required to pay the employer portion of premiums for family and medical leave. However, if an employer with fewer than 50 employees chooses to pay the premiums, the employer will be eligible for grant assistance.
Benefit administration: The state's paid family and medical leave program will be administered by the Washington Employment Security Department.
For additional information, please contact your Burnham Benefits Consultant or Burnham Benefits at 949-833-2983 or firstname.lastname@example.org.
Burnham Benefits does not engage in the practice of law and this publication should not be construed as the providing of legal advice or a legal opinion of any kind. The consulting advice we provide is intended solely to assist in assessing its compliance with the Patient Protection and Affordable Care Act and other applicable federal and state law requirements, and is based on Burnham Benefit’s interpretation of federal guidance in effect as of the date of this publication. To the best of our knowledge, the information provided herein, and assumptions relied on, are reasonable and accurate as of the date of this publication. Furthermore, to ensure compliance with IRS Circular 230, any tax advice contained in this publication is not intended to be used, and cannot be used, for purposes of (i) avoiding penalties imposed under the United States Internal Revenue Code or (ii) promoting, marketing or recommending to another person any tax-related matter.