State Leave Laws + Employee Benefits

It’s Employee Handbook season! As you are writing your policies, don’t forget that state leave laws may affect your employee benefits!

As of October 2023, paid family medical leave laws (“PFML”) are or will be in place in fifteen states[1].  Many employers in states without paid leave laws are also initiating various paid and unpaid leave policies (“employer-initiated leave”), such as parental, medical[2], family, or maternity leave.  Various leaves may occur simultaneously. As such, it’s important not to lose sight of benefits continuation when drafting these leave policies.  PFML laws have embedded benefit protections and employer policies should also outline these benefit protections and responsibilities.

Within any leave policy (PFML or employer-initiated leave), the following should be clear:

1. How is eligibility for the leave determined? Is eligibility based on tenure or full-time/part-time status?
2. What reasons justify the use of the PFML or employer-initiated leave?
3. How will the employer obtain benefit premiums from employees’ compensation?
4. Can the employer terminate the benefits while the employee is on leave, if the premium is not paid?
5. If the leave is unpaid, how will the organization document the agreement to the premium payment arrangement?
6. If the employee does not return from leave, when may the benefit be terminated?
7. If a multi-state employer, the policy should outline how to identify which PFMLA applies to the remote worker or interstate worker or point to resources on how the employee may obtain the necessary information.
8. Does the leave need to be taken in a block of time concurrently or may it be taken intermittently?
9. How often may the employee take the leave? Will it be based on the calendar year or on a rolling 12-month basis?

Pro Tips! 

1. Provide documentation to the employee as to an estimate of their net paycheck while on PFML or during the premium payment arrangement period.
2. Review compensation plan for bonus payout requirements, how they interact with leave policies, and requirements of state law.
3. Overcommunicate with managers about the benefits of employer-initiated leave and how the employee can communicate the leave request to Human Resources.
4. Remember that PFML laws are generally broader and overlap with federal FMLA rules. Employers that are subject to both should ensure that there is no conflict between their PFML policies and FMLA policies.

[1] California, Colorado, Connecticut, D.C., Delaware, Maine (coming soon!), Maryland, Massachusetts, Minnesota (coming soon!), New Hampshire (voluntary), New Jersey, New York, Oregon, Rhode Island, Washington

[2] Organizations may have employer-initiated unpaid family leave policies if they are not a FMLA covered employer and covered by no other state leave laws.  Therefore, the employer may allow the employee to take a leave under an unpaid leave policy that will not come with all the protections of FMLA or possible PFML for those employees that do not meet their tenure requirements.