Federally Mandated Paid Parental Leave in the US: Is the Wait Over?

In the United States, the options for taking parental leave are limited. While federal (and many state) laws entitle U.S. employees to take time off from work to care for a child, the leave is unpaid unless a generous employer has a policy providing for paid leave. This means that taking leave to care for a child is not so easy for many American families.

The United States lags behind other countries when it comes to paid parental leave at the national level. A February 2017 survey published by the Organization for Economic Cooperation and Development revealed that, of 41 developed countries, the United States is the only one without a national paid maternity leave law, and many of the other member countries also have paid leave laws that apply to both male and female parents.

Even at the state level, the numbers are surprisingly small. Currently, only four states — California, Rhode Island, New Jersey and New York — have paid family leave laws. For example, New York’s Paid Family Leave Benefits Law will provide eight weeks of job-protected, paid family leave beginning on Jan. 1, 2018, with the number of weeks increasing in subsequent years to a maximum of twelve weeks beginning on Jan. 1, 2021. New Jersey’s own paid leave law was passed in 2009 and offers up to six weeks of paid family leave. A fifth state, Washington, passed a paid leave law in 2007, but the law was never implemented. On Dec. 20, 2016, the District of Columbia Council passed the country’s most generous paid leave program, the Universal Paid Leave Amendment Act of 2016. The act provides eight weeks of paid parental leave, six weeks of paid family leave, and two weeks of paid personal medical leave. D.C. Mayor Muriel Bowser opposed the law and, on Feb. 16, 2017, returned it to the Council unsigned. From there, the act moved to the next step of the legislative process, a mandatory 30-day congressional review.

Debate over whether paid parental leave should be a federal mandate, and over its scope and application, have sidelined attempts to introduce, let alone pass, a federal paid leave law. With the recent election and change in administration, one might assume that paid parental leave is going to have to wait for a “friendlier” environment. Not so, according to then-candidate and current president, Donald Trump.

President Trump’s stance on paid leave was first made known just prior to the election. On Sept. 13, 2016, Trump announced his “innovative plan” on paid leave. See Press Release, Donald J. Trump’s New Child Care Plan (Sept. 13, 2016). Much of the plan was devoted to child care expenses, including proposing amendments to the federal tax code that would allow working parents to deduct child care expenses, creating a Dependent Care Savings Account (DCSA) for tax-deductible contributions and tax-free appreciation year over year, and offering incentives to employers who provide child care in the workplace. On paid leave, the Trump plan offered to “guarantee six weeks of paid maternity leave by amending the existing unemployment insurance (UI) that companies are required to carry. The benefit would apply only when employers don’t offer paid maternity leave, and would be paid for by offsetting reductions in the program so that taxes are not raised.” The Trump plan vowed that it would “triple the average paid leave received by new mothers.” Yes, you read that right. The Trump plan was limited to a paid maternity leave for mothers and made no provision for any other caregiver, including non-birth or foster parents and fathers. The plan was touted as being at the behest of Trump’s daughter, Ivanka Trump, who has already taken on a very public role in his administration.

Not surprisingly, the Trump plan was criticized for being far too limited. Officially, the plan has remained unchanged following the election. However, there have been signs that a change is in the air, including a tacit acknowledgment that paid leave should be available to all parents. For example, in his first joint address to Congress on Feb. 28, President Trump indicated that his “administration wants to work with members in both parties to make child care accessible and affordable, to help ensure new parents have paid family leave, to invest in women’s health, and to promote clean air and clear water.” See The White House, Office of the Press Secretary, Remarks by President Trump in Joint Address to Congress (Feb. 28, 2017). If the reference to “new parents” and “paid family leave” was intentional, the president’s speech marks a departure from his earlier, and less popular, paid maternity leave plan. There has been no official confirmation of the shift, but news media have reported that Ivanka Trump and other Trump aides are considering alternatives to the original plan that would include parental leave for adoptive parents and fathers.

Meanwhile, in early February 2017, Senator Kirsten Gillibrand (D-NY) and Representative Rosa DeLauro (D-Conn.) reintroduced the Family and Medical Insurance Leave Act (the FAMILY Act). See Press Release, U.S. Senator Kirsten Gillibrand, “Senator Gillibrand Leads Group of 27 Senators to Reintroduce FAMILY Act” (Feb. 7, 2017); Press Release, U.S. Representative Rosa DeLauro, “DeLauro Leads More than 100 House Democrats in Reintroducing FAMILY Act” (Feb. 7, 2017). The FAMILY Act was first introduced by Senator Gillibrand and Representative DeLauro in 2013, and then again in 2015, but it has never made it out of committee. If passed, the FAMILY Act would provide up to 12 weeks of benefit payments to eligible employees who take time for “qualified caregiving,” defined as “any activity engaged in by an individual, other than regular employment, for a reason for which an eligible employee would be entitled to leave under [the Family and Medical Leave Act of 1993].” See Family and Medical Insurance Leave Act of 2017, S. 337 and H.R. 947, 115th Congr. (2017). Significant provisions of the act include the ability of eligible employees to earn up to 66 percent of their monthly wages (up to a capped amount) and its application to all employers, regardless of size. The benefit would be funded by employee and employer payroll deductions and administered by a to-be-created Office of Paid Family and Medical Leave.

Notwithstanding the complete absence of a federal law and the paucity of state laws, corporate America has forged its own way, with many companies opting to implement paid parental leave policies. For example, corporate giant American Express announced in a Dec. 12, 2016, press release that, effective Jan. 1, 2017, U.S.-based full-time and part-time employees would be eligible for 20 weeks of paid parental leave. See Press Release, American Express, “American Express Increases Parental Leave and Family Benefits for U.S. Employees Beginning January 1, 2017” (Dec. 12, 2017). In addition, Amazon, Etsy, Starbucks, IKEA, Spotify, Netflix, Twitter, Google, Facebook, Johnson & Johnson, Goldman Sachs, Reddit and Bank of America are just a few of the name brands that offer expansive paid leave policies. In November 2015, early adopter Amazon announced that it would include shared leave in its paid parental leave policy, borrowing from several European countries that offer it. According to a report by The Washington Post, the program gives an employee the option of sharing his or her paid leave with a partner whose employer does not offer its own paid leave program. See Jena McGregor, “In New Twist, Amazon to Let Employees Share Parental Leave Benefits With Their Spouses,” The Washington Post, Nov. 2, 2015. In March 2016, Etsy announced that, effective April 1, 2016, it would offer 26 weeks of fully paid leave to employees who become parents “through birth or adoption, regardless of their gender, country of residence or family circumstance.” See https://blog.etsy.com/news/2016/strong-families-strong-business-a-step-forward-in-parental-leave-at-etsy/. These companies undoubtedly understand the business case for paid parental leave, but their policies go much farther than a mere business imperative.

To be fair, most employers are not at the level of American Express, Amazon or Etsy, and do not have the financial resources or administrative capabilities to implement and administer such far-reaching policies. Yet, according to a June 2015 United States Department of Labor factsheet, only 12 percent of private sector employees have access to paid family leave through their employers. See United States Department of Labor, Factsheet: Paid Family and Medical Leave, June 2015. If the Trump administration is receptive to some form of paid leave law, as appears to be the case, and members of Congress follow suit, the time may be ripe for the passage of a federal paid family leave law. It remains to be seen how far such a law would go, and the devil may ultimately be in the bipartisan details.

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Reprinted with permission from the April 17, 2017 issue of the New Jersey Law Journal. © 2017 ALM Media Properties, LLC. Further duplication without permission is prohibited. All rights reserved. For information, contact 877-257-3382 or reprints@alm.com or visit www.almreprints.com.