INTEGRATING PAID FAMILY & MEDICAL LEAVE INTO YOUR EXISTING - PowerPoint PPT Presentation

INTEGRATING PAID FAMILY & MEDICAL LEAVE INTO YOUR EXISTING BENEFITS PRESENTED BY PATTY BORST AND DAVID SETZKORN October 10, 2019 1

AGENDA 1. Overview 2. Federal Landscape 3. State Landscape 4. Impact to STD, LTD, & Company Paid Leave 5. Appendix 2 The following slides are provided for informational purposes only and do not constitute legal advice. They should not be relied upon or treated as legal advice. This information is intended, but not promised or guaranteed to be current, complete, or up-to-date, as statutes and regulations are subject to change. You should not act or rely on any information contained in this document without first seeking the advice of an attorney.

WHY ARE WE HERE TODAY? 3

OVERVIEW 4

2019 LEGISLATIVE MAP 5

PAID FAMILY & MEDICAL LEAVE DEFINED • Paid Family and Medical Leave Insurance is an insurance program funded by Employees and Employers through a payroll tax that implements paid leave both for one’s own condition and to care for others that is typically job protected. • PFML is similar to FMLA (Family and Medical Leave Act), except that PFML ensures you get some pay while taking leave. PFML will also apply in certain instances that FMLA does not cover. Paid F Family L Leave Paid M Med edical Lea eave Provides paid leave for an Provides paid leave for an individual to bond with a child, individual’s OWN serious health care for a family member with a condition or pregnancy OVERVIEW serious health condition, military complications and recovery exigency, or military caregiver 6

NOT TO BE CONFUSED WITH…. • Employer-Mandated Paid Leave: Employers in some states/counties/municipalities are required to provide a minimum amount of paid sick leave or paid leave for other incidental reasons • State Accrued Paid Leave: State laws that require employers to allow the application of their company sick pay plans to be used for other reasons outside of an employee’s own illness and often provide job projection • Company Paid Leave Programs: Employer-Specific Paid Leave policies not in connection with a mandated program OVERVIEW 7

PARENTAL LEAVE TRENDS PAVE THE WAY From 2014 to 2018, the number of employers offering paid leaves to new parents increased significantly. 2016 2016 Paid Maternity Leave – 26% Paid Paternity Leave – 21% Paid Adoption Leave – 20% Paid Parental Leave – 17% 2018 2018 Paid Maternity Leave – 35% Paid Paternity Leave – 29% Paid Adoption Leave – 28% OVERVIEW Paid Parental Leave – 27% 1.SHRM, 2018 Employee Benefits: The Evolution of Benefits (2018), 44-45 8

FEDERAL VS STATE LANDSCAPE • Proposed Federal law attempts to compete with state and local laws • States and municipalities fill the gap, making consensus on federal requirements difficult to reach OVERVIEW 9

FEDERAL LANDSCAPE 10

PROPOSED LEGISLATION (2018) THE E ECO CONOMIC S C SECURITY TY FO FOR NEW P W PARENTS TS ACT ( (RUBIO-FL FL) • Allows parents to tap into their Social Security Benefits before retirement • Parents could take a least two months of paid parental leave at up to 70% of their weekly wage WORKFLEX I IN TH THE 2 21ST T CENTURY ACT ( T (WALTE TERS-CA, R RODGER ER-WA, & & STEF EFANIK-NY) • Would amend ERISA to provide benefits • Paid leave is extended to all full-time and part-time employees • Employees accrue leave over the course of a plan year • Employers would fund the bill and the bill would be scaled based on the size of the employer • Part-time employees would receive proportional benefits FEDERAL • LANDSCAPE Minimum eligibility requirements in order to qualify • The bill would pre-empt all state and local paid leave laws and regulations 11

PROPOSED LEGISLATION (2018 – 2019) FAMIL ILY A Y ACT ( (GI GILLIB IBRAND-NY & & DE DELA LAURO-CT) • Establishes new office under the Social Security Administration (SSA) to administer and pay benefits • Provides 12 weeks of paid leave for FMLA qualifying reasons at 66% of their monthly wages up to a capped amount (TBD); does not provide job or benefit protection as required by FMLA • Covers all employers regardless of size • Employees must contribute to Social Security in order to qualify • Funded by a 2 tenths of 1% employer and employee contribution • Estimates are about $1.50 per week for a typical worker (figure would adjust based on income) • Would run concurrent with, rather than in lieu of, state and local benefits • Based on models of CA, NJ, and RI FEDERAL LANDSCAPE 12

PROPOSED LEGISLATION (2018 – 2019) CRAD ADLE AC ACT ( (ERNS NST-IA & A & L LEE-UT) • Allows parents to tap into their Social Security Benefits before retirement • Would require parents to postpone activating their Social Security Benefits if the choose to use for Paid Parental leave by up to 6 months • Parents could take up to three months of paid parental leave at up to 70% of their weekly wage • Payments would begin 2 weeks after parents applied for a baby’s Social Security Number • Almost identical to the Economic Security for New Parents Act last in 2018 FEDERAL LANDSCAPE 13

STATE LANDSCAPE 14

STATE LANDSCAPE – PAID FAMILY LEAVE Likely t Li to b be Next Existing ng P Programs Com oming S Soon oon • Colorado • • California Washington • Maine • • New Jersey Oregon • Hawaii • • New York Massachusetts • Vermont • • Rhode Island Connecticut • New Hampshire • Washington, DC • Pennsylvania • Minnesota • Illinois STATE LANDSCAPE 15

STATE PAID FAMILY MEDICAL LEAVE TRENDS • Employee vs. Employer Funding (or both) • Paid Leave Benefit vs. Employer Tax Credit • Public vs. Private Plans • Impact to Current Unpaid Leave Laws • Eligibility Rules and coverage for non-traditional employees (contractors, former employees) • Benefit Amounts • Covered Leave Reasons, Relationships, and Leave Schedules STATE LANDSCAPE • Taxation of Benefits 16

WASHINGTON PAID FAMILY & MEDICAL LEAVE (WAPFML) Waiting Period Min/Max Benefit Max Duration 7 Days¹ $100/$1,000 12 wks Medical/12 wks Family/2 wks PDL/18 wks total* • Effec ective D e Date: Employee/Employer Contributions begin 7/1/19. Benefits begin 1/1/20. Contribution is 0.4% of gross pay. Employees pay 45% of Medical Leave and 100% of Family Leave. 2/3 of total Premium is for Medical and 1/3 is for Family • Emplo ployee E Eligib ibilit ility: Employees must work a minimum 820 hours for any employer (benefit is portable and employees may meet eligibility for WAPFML prior to FMLA) • Lea eave R Rea easons: Employee illness or pregnancy, parental leave, military exigency, care of ill child (any age), parent, parent-in-law, Spouse/domestic partner, sibling, grandparent, grandchild • Income R e Repla eplacemen ent: 90% of one-half of state AWW + 50% of the difference between the employee’s AWW and ½ of the state AWW. Can coordinate with employer paid leave programs • Priva vate te Plan: Employers can create a voluntary plan that meets or exceeds the state plan for either the medical STATE LANDSCAPE leave, family leave, or for both • Prote tection: Job protection extends once FMLA requirements have been met and can extend beyond the FMLA period *In any benefit year 17 ¹ There is no Elimination Period for Bonding or Placement of a child.

OREGON PAID FAMILY & MEDICAL LEAVE Waiting Period Min/Max Benefit Max Duration TBD 5% AWW/120% AWW 12 wks medical/12 wks family /2 wks PDL/18 Wks total* • Effec ective D e Date: Employee/Employer Contributions begin 1/1/22. Benefits begin 1/1/2023. Total contribution may not exceed 1% of employee wages. Employers pay 40% of total premium, employees pay 60% • Emplo ployee E Eligib ibilit ility: Employees must earn a minimum $1000 during the base year or the alternate base year • Leave Reasons : employee illness or pregnancy, parental leave, victims of domestic violence, care of ill child (any age), spouse, domestic partner, parent, sibling, grandparent, grandchild any individual related by blood or affinity • Income R e Repla eplacemen ent: 100% of an employee’s AWW for low income earners. For all others, 65% of the employee’s AWW and 50% of the employee’s AWW greater than 65% of the state AWW. Benefits are payable only when funds are available in the PFML Insurance fund STATE LANDSCAPE • Priva vate te Plan: Employers can apply to have obligations met via a private plan. • Prote tection: Employee is eligible for Job protection under federal FMLA, OFLA, and OR PFML if employed 90 days before taking leave 18 *In any benefit year