Proposed Paid Leave Legislation in the 115th Congress
By: Megan J. Muoio, May 1, 2017
Employers should be apprised of several pieces of legislation currently pending in Congress which would affect paid leave policies for their employees. While it is unclear whether any of these bills will be passed by both the House and the Senate and then be signed into law, it is important for employers to be aware of pending legislation as it is being debated in Congress. These bills address the issue of paid family leave, which is currently available to 12% of U.S. workers. The paid leave policies are meant to supplement the existing federal Family and Medical Leave Act, which provides unpaid leave for covered employees who have been with the same employer for at least 12 months and worked 1,250 hours or more in the previous year.
The first bill is S. 337, the Family and Medical Insurance Leave (FAMILY) Act, which would create a family insurance program for all workers within the Social Security Administration. The FAMILY Act is modeled on successful state programs, such as the California Paid Family Leave program implemented in 2002. The federal program would apply to all employees, regardless of the size of the employer, the length of time an employee has been with their employer, or whether the employee works full time, part time, or seasonally. The employer and employee would each contribute 0.2% of the employee’s wages (or 2 cents for every $10 earned) from the employee’s paycheck into the trust fund maintained by the Social Security Administration. Employees would be entitled to up to 66% wage-replacement for 12 weeks in the event of a serious family or medical emergency. The FAMILY Act is sponsored by Democratic Senator Kirsten Gillibrand of New York and has several Democratic co-sponsors.
Another paid leave bill that is pending in the 115th Congress is H.R. 1180, the Working Families Flexibility Act, sponsored by Republican Representative Martha Roby from Alabama’s 2nd Congressional District. There is a coordinating bill pending in the Senate (S. 801), sponsored by Republican Utah Senator Mike Lee. This bill would amend the Fair Labor Standards Act to permit employees to choose paid time off as compensation for working more than 40 hours per week. Employees could bank up to 160 paid hours off in lieu of receiving compensation for overtime work.
Employee advocates caution that this scheme would provide incentives for employers to mandate overtime with the promise that time could be banked later. However, employees would need employer approval to use the banked compensatory time, which means that they may not be able to access paid time off in the event of a family emergency. The ability to bank time would only apply to full-time employees who have been with their employer for 12 months or more. In the event a request to use banked time is denied, the employee would have the right to “cash out” the time at the overtime rate, which the employer would have to comply with within thirty days. Another downside for employers is that employees who believe that their rights under the Act have been violated can sue in court and not the lower-cost administrative dispute systems through the Department of Labor.
Similar bills were introduced by Rep. Roby and Sen. Lee in the 113th and 114th Congress but did not make it to President Obama’s desk for signature either time. Now, however, with Republican control of the House, Senate, and Presidency, it is more likely that the Working Families Flexibility Act will become law. The Act is set to be voted on in the House this week.