How Does Paid Family Leave Work?

For most Americans, paid family leave is a luxury. In the United States, federal law only requires unpaid leave under certain criteria but allows states and employers to set their own policies. Taking time off to adjust to your new life or managing medical needs is essential but could be met with more administrative complications and stress if not planned properly. 

Small businesses and emerging employers are finding new ways to offer competitive benefits to improve the health and productivity of their employees. Providing a robust family leave option may not be in the budget, but consider a care management plan, such as Mira, to offer discounted doctor’s office visits, prescriptions, preventative testing, and more. Try Mira today.

How Paid Family Leave Works

The United States is the only industrialized country without a federal paid maternity leave policy. The federal government implemented the Family and Medical Leave Act (FMLA), ensuring 12 weeks of unpaid leave within a 12-month period for eligible employees of covered employers. An employee could also be eligible for 26 workweeks of leave during a 12-month period for military care of an immediate relative. 

FMLA

The FMLA also ensures job protection during leave and a continuation of health insurance benefits. Under the FMLA, eligible employees are entitled to 12 workweeks of unpaid leave for:

1. The birth of a child or care of a newborn within the first year of birth
2. The placement of a child for adoption or foster care within the first year of placement
3. To care for a spouse, child, or parent with a serious health condition
4. A serious health condition hindering the performance of essential functions of the job
5. A qualifying unexpected event arising from an immediate relative on “covered active duty.”

Nearly 60 percent of U.S. workers are eligible for FMLA through their employer, but only 19 percent receive paid family leave through their employer’s unique policy. The U.S. Department of Labor accepts feedback on specific challenges or best practices regarding the use or administration of FMLA leave. More information or to submit a comment, here. 

Covered Employers Under the FMLA

Only employers that meet certain criteria are subject to the provisions of the FMLA. These covered employers include public agencies such as local, state, or federal government employers. The FMLA also applies to public or private elementary and secondary schools. These public-sector and educational institutions are subject to the FMLA regardless of the number of employees.

The FMLA also applies to private-sector employers with 50 or more employees during at least 20 workweeks in the current or previous calendar year. In other words, if you work for a small business or startup, your employer may not be required to provide you the 12 weeks of unpaid leave. Clarify with your hiring manager or human resource team to understand the company’s time-off policies. Many employers have begun offering robust time-off benefits to increase competition and retention. 

Continue reading for more information on how some employers offer family leave. 

Eligible Employees Under the FMLA

If you work for an employer subject to the FMLA, it does not always mean you are automatically entitled to 12 weeks of unpaid leave. Employees also have to meet eligibility requirements to be entitled to job-protected leave. An eligible employee has:

1. Works for a covered employer, as outlined above.
2. Has worked for the employer for at least 12 months
3. Has worked at least 1,250 hours for the employer during the 12 months preceding leave
4. Works at a location where the employer has at least 50 employees within 75 miles

The 12 months of work required for an eligible employee does not have to be consecutive and could include seasonal work. If you have more than a seven-year gap of service for that organization, then you are no longer eligible unless that gap was due to military service for USERRA members.

Recent Attempts at Federal Paid Leave Expansion

Employers and Politicians see the benefit of paid leave policies. Since the early 2000s, some states and employers have developed robust paid family leave policies. In recent years, the Trump administration began discussing a national paid leave policy that did not come to fruition. Still, many suggested policies have been brought to our political leader's attention. Below are some recent efforts to expand the federal guidelines regarding paid family leave in the United States.

Federal Employee Leave Act

In October of 2020, the Federal Employee Leave Act was enacted, granting federal employees 12 weeks of paid parental leave for the birth or placement of a child. The FMLA policy had previously guaranteed federal employees 12 weeks of unpaid leave.

Healthy Families Act

The Healthy Families Act was introduced to the House of Representatives in April of 2021 but has yet to be passed. This law would allow employees to earn at least seven paid sick days, or 56 hours to care for themselves or their loved ones. This bill emphasizes the importance of “sick time” in the workplace to care for personal needs by setting a national paid sick leave policy. 

Family and Medical Insurance Leave Act

Introduced to the Senate in February of 2019, the Family and Medical Insurance Leave Act, also known as the FAMILY Act, establishes the Office of Paid Family and Medical Leave within the Social Security Administration. This would entitle every individual to a family and medical leave insurance benefit for a specified period and under certain calculated eligibility benefit amounts. This bill amends our current tax system and would impose a new tax on employers, employees, and self-employed individuals to fund the FAMILY benefit.