The Patchwork Quilt of Workplace Leave Laws in the United States

Mar 17, 2023
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By: Hon. Ruth Bogatyrow Kraft

Last week, President Biden marked the 30th anniversary of the Family and Medical Leave Act (FMLA) with a call for a national program providing leave for medical or caregiving needs. The United States is one of only eight countries in the world and the only participant country in the Organisation for Economic Cooperation and Development without a national paid parental leave policy. It is also one of the few high-income countries without a national family caregiver or medical leave policy. Most countries fund leave programs via social insurance funds supported by employers, workers and government contributions. 

The administration has proposed a comprehensive, paid national program to provide paid medical, parental, caregiving, deployment-related and safe leave.  

The FMLA, enacted during the Clinton Administration, provides for 12 weeks of unpaid leave without the loss of employment or health benefits. 

The underlying premise is that the lowest wage earners in the country, who are disproportionately women and people of color, do not have employer sponsored family leave; only 1 in 20 have access to paid family leave.  The likelihood of having access to coverage in construction, leisure and hospitality, food service or transportation, and warehouse work is about 10 percent.

Although most private sector employees have access to some form of paid sick time through their employers, most do not have enough leave to cover an extended illness or injury. The average private sector worker is eligible for seven days of fully paid leave each year. The Bureau of Labor Statistics indicates that only 1 in 4 private sector employees have access to paid family leave. 

Only eleven states have passed paid family and medical leave laws: California, Colorado, Connecticut, Delaware, Massachusetts, Maryland, New Jersey, New York, Oregon, Rhode Island and Washington, along with the District of Columbia. Vermont and New Hampshire have also enacted voluntary, “opt-in” laws.

Typically, benefits are set as a percentage known as the wage replacement rate up to a statutory cap, which adjusts annually in proportion to a state’s average wages. Statutes differ as to the applicability to all private sector employers or those employing a threshold number of individuals.

For example, the New York mandate as to employers with 4 or fewer employees in any calendar year and net income of $1 million or less in the previous tax year provides for 40 hours of unpaid leave per year; those with income of more than $1 million or between 5 and 99 employees must provide 40 hours of paid leave. Only employers with 100 or more employees are required to provide 56 hours of paid leave annually.

However, New York City has proposed amendments to its own Earned Safe and Sick Time Act which are more stringent. It will determine an employer’s obligations by counting the highest number of numbers concurrently employed at any time during the calendar year to date such that a reduction in force would not reduce its obligations until the following calendar year. The alignment of the city’s law with those of contiguous jurisdictions is of even greater significance. An employee who routinely performs or is expected to perform work within the city, even through telecommuting, would qualify for coverage based on the days in New York. 

Of concern, from a management perspective, is that the New York City proposal contains a provision that, if a business sale, transfer of corporate ownership, or subcontracting relationship occurs, benefits would continue to apply post-transaction, even if the successor employer’s workforce is smaller than that of the original employer. Joint employers would be held individually and jointly liable for the failure to transfer employee benefits. Given the Biden administration’s initiatives on joint employment in the wage/hour context, this assumes even greater significance.

To date, only six states and the District of Columbia provide for portability of benefits between employers. The rise of the gig economy has led to a notable concern regarding portability, as a considerable number of low-income workers hold multiple jobs or switch jobs frequently, rendering benefits inapplicable to them. Gig workers and independent contractors do not have natural “points of aggregation” or sources of information as to the applicability and terms of benefits.

A nationwide program would alleviate this issue, turning the patchwork quilt into a single-colored blanket but it remains to be seen whether this proposal could result in enactable legislation and on what terms. It appears that the administration’s budget is more a list of priorities than a program to be funded by the government, as opposed to an insurance program funded by employer and worker payments. 

If you have questions related to this article or wish to discuss matters related to wage/hour disputes, misclassification, or employment policies and procedures, please feel free to contact Hon. Ruth B. Kraft, Labor and Employment Partner at Falcon Rappaport & Berkman, at (516) 353-3306.

DISCLAIMER: This summary is not legal advice and does not create any attorney-client relationship.  This summary does not provide a definitive legal opinion for any factual situation. Before the firm can provide legal advice or opinion to any person or entity, the specific facts at issue must be reviewed by the firm.  Before an attorney-client relationship is formed, the firm must have a signed engagement letter with a client setting forth the Firm’s scope and terms of representation. The information contained herein is based upon the law at the time of publication.

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