We’ve discussed on several occasions the patchwork of paid sick and family leave laws in cities and states across the country. While the federal government has yet to take up the issue, this is one of the few topics that politicians on both sides of the aisle have shown a willingness to address. Recent developments suggest that Congress may soon take action to create the first significant revision to federal law on family leave since the enactment of the Family and Medical Leave Act (FMLA) back in 1993.
Recent Democratic proposals for paid federal family leave have called for financing the program through an increase in the payroll tax shared by employers and employees (similar to the payroll taxes for Social Security and Medicare).
Republican proposals, meanwhile, would allow parents to obtain paid family leave now by agreeing to delay the start of their Social Security payments. Until now, no proposal has generated enthusiasm from a majority in Congress.
That may be changing. In May, the Senate established a bipartisan working group to study the issue of paid family leave and to explore proposals that could generate broad support. And just last week, Sen. Bill Cassidy (R-La.) and Sen. Kyrsten Sinema (D-Ariz.) teamed up to release the first bipartisan proposal to create a federal paid family leave benefit.
The proposal is promising, in that it avoids some of the issues that have caused both sides to reject past paid leave initiatives. Rather than creating a new tax or cutting retirement benefits, this proposal would allow new parents to accelerate a portion of their child tax credit for immediate pay following the birth of a child. In exchange, the credit would be reduced over the following decade.
As proposed, the program would be capped at $5,000 in immediate pay following the birth or adoption of a child. In exchange for that upfront payment, the parents’ child tax credit would be cut from $2,000 to $1,500 each year for the following 10 years. (The 2017 tax reform bill increased the child tax credit from $1,000 to $2,000, so even the reduced credit would still be greater than it was prior to the change in law.)
The proposal may have something to offer everyone. It could appeal to Republicans (and employers) by not imposing a new tax, and it could appeal to Democrats by preserving existing retirement benefits. Still, it remains to be seen whether Congress will act on this new initiative, especially as the political parties turn toward the 2020 presidential election.
In addition, even if this benefit is enacted, employers will likely still be required to comply with the myriad of state and local laws on this issue as well. Any employer that operates in a state with its own version of FMLA knows that the federal law does not preempt all state laws on the topic. This will probably be true for paid family leave as well. Thus, for the foreseeable future, employers must continue to monitor the patchwork quilt of state and local laws to ensure they are in compliance everywhere they operate.
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