Employment Law Could Become More Complex With Paid Family and Medical Leave Act

According to a press release, on March 25, 2009, Representative Pete Stark (D-CA) and others introduced to Congress the Family Leave Insurance Act of 2009 (H.R. 1723)(the “Act”). This Act will:

  • Provide an employee with 12 weeks of paid leave, over a 12-month period, to care for a new child, provide for an ill family member, treat his or her own illness, care for a wounded veteran, or deal with the deployment of a family member;
  • Provide these benefits through a new trust fund that is financed equally by employers and employees, who will each contribute 0.2% of the employee’s pay (for the average worker, less than $7 a month);
  • Progressively tier the benefits so that a low wage employee (earning less than $30,000) will receive full or near full salary replacement, middle income employees ($30,000- $60,000) receive 55% wage replacement, and higher earners (over $60,000) receive 40-45%, with the benefit capped at approximately $800 per week;
  • Administer the program through the Department of Labor, which will contract with states to administer the program (similar to how the Unemployment Insurance program is run); and
  • Allow states and businesses with materially equivalent or better benefits to opt-out of the program.

The press release states that the Act “builds on the success” of the Family and Medical Leave Act of 1993 (often called the “FMLA”). The FMLA provides 12 weeks of unpaid leave to an employee who needs to take time off generally for one of the reasons referred to in the first bullet above.  However, employers have found the FMLA very difficult to administer, due to the complexity of the statute and the underlying regulations, and in particular the Department of Labor’s overhaul and revision of those regulations, effective as of January 16, 2009. In considering whether to enact the proposed  Family Leave Insurance Act, it is hoped that Congress will take into account the complexity of and difficulty in administering the proposed Act along with the existing FMLA.