President Biden Unveils his Paid Leave Plan: How Would the Plan Impact Employers?

The reality cuts like a knife: the United States of America is one of the only countries in the world that doesn’t maintain a federal paid leave program for its workers.

On the evening of April 28, President Biden made clear his desire to change this reality.

In his first address to Congress since his election, President Biden unveiled an aggressive plan to provide federal paid family and medical leave to employees at workplaces across America.

What’s the Plan?

According to a White House fact sheet, the President’s proposal, dubbed the “American Families Plan,” calls for the following:

• The program would provide for partial wage replacement for an employee to take time to bond with a new child, care for a seriously ill loved one, deal with a loved one’s military deployment, find safety from sexual assault, stalking, or domestic violence, heal from their own serious illness, or take time to deal with the death of a loved one.  Though the fact sheet does not define these terms, it appears as though the President’s plan would expand the reasons for FMLA leave and the familial relationships involved.
• The program would phase in paid FMLA leave over a 10-year period.  It would guarantee 12 weeks of paid parental, family, and personal illness/safe leave by year 10 of the program.
• Employees also would receive three days of bereavement leave per year starting in year one. (This has long been sought for by a growing number of Congress members, never to see the light day.)
• The program would provide workers up to $4,000 a month, with a minimum of two-thirds of average weekly wages replaced, rising to 80 percent for the lowest wage workers.

Why is Paid FMLA Leave Necessary?

The White House puts it this way:

Nearly one in four mothers return to work within two weeks of giving birth and one in five retirees left or were forced to leave the workforce earlier than planned to care for an ill family member. Further, today nearly four of five private sector workers have no access to paid leave. 95 percent of the lowest wage workers, mostly women and workers of color, lack any access to paid family leave.

Pretty compelling.

How Would the President Pay for the New Entitlement?

The cost is breathtaking — the price tag is $225 billion.

To pay for paid FMLA leave, the President is proposing an increase in the income tax rate for the top 1 percent of American income earners (from 37 percent to 39.6 percent). He also would increase capital gains and dividend tax rates for those who earn more than $1 million a year and would close some loopholes on the estate tax.

What’s the Likelihood of Passage?

One word to keep in mind: filibuster.  Until this proposal has the support of 60 Senators (or at least 60 who won’t stand in the way and agree to end the debate), gridlock surely will ensue. It’s one thing to pass a temporary FFCRA measure on a small number of employers during a pandemic. It’s a far different story when you’re considering permanent paid leave that presumably would cover the far majority of American businesses. At a minimum, we’re far more likely to see a compromised plan than the President’s proposal.

Still.

It’s about time, America, don’t you think?   I share many folks’ concerns about the price tag, but here’s several compelling reasons that it’s time to make paid leave of some kind the law of the land:

1. The federal bill would significantly slow down (although admittedly not eradicate) the growing number of conflicting state and local paid medical and sick leave laws.  At a minimum, we likely would see a number of these state and local paid leave laws run concurrently with a federal mandate.  Not all, but most, would fall in line.
2. A compromise could require employees to pay their fair share into the cost of paid leave, so it would not fall exclusively on employers or the federal government.
3. See the compelling statistics above.  At this point in time, isn’t federal paid leave simply the right thing to do?

Jeff Nowak is a Partner at the law firm of Littler Mendelson and has been named as one of Illinois’ top “40 Attorneys Under 40” to watch in 2012.  Jeff is widely recognized as one of the nation’s foremost FMLA and ADA experts, regularly counseling clients on compliance with FMLA and ADA regulations, conducting FMLA/ADA audits and training, and successfully litigating FMLA and ADA lawsuits.  Jeff is the author of the highly regarded FMLA Insights blog, which has been selected for four consecutive years by the ABA Journal as one of the top 100 legal blogs (2011-2017) and was also voted the No. 2 Labor and Employment blog by LexisNexis.

The above article first appeared in FMLA Insights and is reprinted with Jeff’s permission.