Despite the extensive discussion about family leave in the media and among various forums, there is still wide-spread confusion about the essential details of the various proposals and programs.
It is not at all surprising given the complexity and the lack of common terms. Every program has a unique structure in context of its administration and laws. The early programs were implemented in distinct phases like building blocks. More recently, states intend to implement a bundled policy that includes most or all of these structures.
Described in brief below are the various purposes of leave commonly covered or considered, the two main benefits provided: job protection and wage replacement, and the two primary administrative and funding models currently adopted or under consideration: Universal Social Insurance, or an employer mandate.
A Family and Medical Leave Program might include some or all of the basic “purpose of leave” components as advocates seek to cover a wide range of circumstances.
Temporary disability, medical disability, or short-term disability
The oldest and most long-standing of the leave programs, temporary disability, also known as medical or short-term disability, provides for a leave in the event an employee or worker has a serious health event. It often covers a birth mother for a period of time to recover physically after the birth of a child. It may specify that the leave be limited to pregnancy or childbirth complications. Each state or proposal is a little different.
California, Rhode Island, and New Jersey are among the current PFML states that established these wage replacement programs in the 1940s. It is important to note that they were modest, partial wage replacements. Most did not originally cover maternity leave and did not have job protection provisions.
Most programs consider bonding and caregiving leave under the umbrella of Family Leave.
Parental Leave or Bonding Leave
Parental Leave or “bonding leave” is encouraged for both parents. Birth mothers are often given the opportunity to take an additional period of leave for recovery or in the event of complications (which is covered by the temporary medical disability, above). The birth mother can “stack” her leave so that combined, she may have a much longer period of leave before returning to work.
Either parent, as well as adoptive or foster parents, usually qualify for bonding leave. The trend for fathers to take advantage of this leave is rapidly growing. This is no doubt due to a combination of factors – changing norms and work cultures, as well as more widely available wage replacement in both the private and public sectors. It is also common to allow for this benefit to be taken intermittently over a set period of time, usually the child’s first year.
Family Caregiving Leave is the newest in the suite of benefits that would support time away from work to care for loved ones. It has become a more popular employer benefit in the private sector as well. Advocates have been pressing for an expanding range of relationships in recognition of unconventional caregiving relationships and changes in family demographics.
Programs may cover grandparents, siblings, in-laws, and the most recent inclusion, any relationship that resembles a family or blood-relative relationship. This is in recognition of our mobile society and that many have developed significant relationships that they may lean on in the event of a health issue.
Safe Leave provides for a leave of absence due to domestic violence or abuse as well as stalking. It may cover a number of reasons and circumstances that a victim may need to attend to.
Military Service Related Leave
Leave for employees to perform military service, as well as for employees who have family members engaged in military service. Provisions vary.
Another recognized circumstance or reason for a leave of absence.
Additional purposes may be bereavement and for parties in gestational agreements.
Various Purposes of PFML Programs
Family and medical leave policies may include one or both of two types of benefits: job protection and/or wage replacement.
The Federal law, FMLA, The Family and Medical Leave Act, has been in effect since 1993. It provides a worker with job protection and is a legally enforceable right to leave. If an eligible employee takes leave for any of the qualifying reasons, an employer is prohibited from interfering in the employee’s decision to take a leave, and the employee is entitled to reinstatement at an equivalent position in the company, the maintenance of any previously received healthcare benefits during their leave of absence, and protection from retaliation and discrimination.
Because FMLA is unpaid, and because eligibility requirements exclude some workers that need this benefit, more states have been implementing their own paid family and medical leave. This may be exclusively a wage replacement program, often using the term “insurance,” though whether or not it is truly an insurance model is up for debate.
These laws typically eliminate the risk management features that insurance companies rely on to control costs. Most are community rated and with no experience rating. They are essentially pooled resources captured from wages, administered by the state, and constrained by rules and terms of the law.
Job protection provisions may go beyond those in FMLA in an effort to include those workers not covered by the federal law. Every state is different. Given that many firms are multi-state employers, confusion and complication can cause significant compliance burdens.
Some states have built their family leave policies piece by piece, adding leave components that may or may not include job protection over time. California, for example, started with temporary disability insurance, later adding a pregnancy disability law that included a job protection provision, a bonding or parental leave job protection law, and now bonding and family caregiving insurance.
A few states, like Colorado, are considering bundling the entire PFML structure and implementing it all at once. This is an ambitious path especially given all the unknowns around costs. Time will tell.
Sick leave is typically a distinct law and policy
Sick leave laws are distinct from paid family and medical leave. They are commonly structured as unfunded employer mandates that allow for the accruing of hours of paid leave as hours are worked. They are more easily accessible for short absences and cover more common ailments and routine health visits.
Universal Social Insurance vs an Employer Mandate
Universal Social Insurance is the prominent PFML model nation-wide, yet there is growing interest in an Employer Mandate which brings the advantages of private market carriers and competition. It may contain costs, improve the administration and delivery of benefits, and reduce disruption among other employer-provided benefits. Basic provisions and benefit levels are still mandated by the state law and agency overseeing and enforcing compliance. New York State has an employer mandate for their family leave.
Basic Policy Structure
These schematics are an effort to map out the top-line variables and should be representative of most of those programs in effect or under consideration. Beneath these top-line variables are many layers of detail and that is where these different states are highly divergent.
The first is of the Universal Social Insurance Model, which is currently the most prevalent. Note that the job protection provisions of FMLA are under federal jurisdiction, but many states have added job protection provisions to their state laws to augment that protection.
Below, added in blue, are the key questions from the perspective of an employee or covered worker that must support the program with their wages and that may be applying for a paid leave benefit. The answers are unique for each individual due to the details and the layering of terms.
The second is one representation of an Employer Mandate Model. These may be more variable from state to state as we see more innovation in that direction. Although this model still dictates a mandated benefit structure and job protection provisions, it presents advantages by leveraging the expertise of the risk management industry to the benefit of both workers and businesses. It may bring more efficient cost containment, higher quality of service, and less disruption to existing employer benefits, particularly for multi-state employers. More and more insurance carriers are crafting products to meet the needs of these states.