New National Paid Leave Proposals Explained

With new national leadership prioritizing paid family and medical leave, 2021 may be the year the United States finally creates a national paid leave program, ending its outlier status among peer nations, reducing hardships for families and small businesses, helping the women and people of color hardest hit by the pandemic, and promoting vibrant, inclusive economic growth.

Today, President Joe Biden released the outlines of the Biden-Harris administration’s proposal for comprehensive national paid leave as an element of the American Families Plan, the second part of the administration's vision for building back a stronger post-pandemic economy that reflects the need for greater gender, racial and economic justice. This is a historic first: No president has ever proposed a national, permanent comprehensive paid family and medical leave program. The Biden-Harris plan would phase in 12 weeks of paid leave for parents caring for new children, workers addressing their own serious health issue or caring for a loved one, workers dealing with the effects of a loved one’s military deployment or service-connected injury, survivors of domestic violence and sexual assault getting services and help, and workers grieving the loss of a loved one. The White House estimates this program to be a $225 billion investment over 10 years.

The Biden-Harris plan is one of two new paid leave proposals released this week. Yesterday, U.S. House Ways & Means Committee Chairman Richard Neal (D-Mass.-1) released a discussion draft of a universal paid family and medical leave program that is part of his Building an Economy for Families Act, which also includes new investments in child care and new family-supporting tax policies. Neal’s program would also provide 12 weeks of paid leave for a comprehensive set of reasons, to all workers. His plan would begin providing benefits in 2023.

The Biden-Harris and Neal proposals both build on the Family and Medical Insurance Leave Act (FAMILY Act) which, until this week, was the only serious comprehensive, universal paid leave program to be proposed at the federal level. The FAMILY Act’s lead sponsors, Sen. Kirsten Gillibrand (D-N.Y.) and Rep. Rosa DeLauro (D-Conn.-3), have been tireless champions for paid leave, building support to record levels within their caucuses, encouraging workers and business leaders to speak out in support of paid leave, and calling on the President and congressional leadership to prioritize the policy.

The Neal and Biden-Harris plans build on the basic structure of FAMILY Act benefits, and each make important improvements that will help create more equitable access, reflecting lessons and best practices from the state programs that have helped pave the way for federal progress.

What do the FAMILY Act, the Biden-Harris plan and the Neal plan have in common? And what’s most important in expanding access to paid family and medical leave to all workers in the United States, no matter where they live, work or their job? The summary of ten paid leave policy design elements below provides a primer on the different approaches to ensuring equitable, comprehensive paid leave for all.

1. Comprehensive Coverage

All three proposals — the FAMILY Act, the Biden-Harris plan and the Neal plan cover a range of serious family and medical needs. The FAMILY Act and Neal proposal cover all of the reasons for leave included in the Family and Medical Leave Act of 1993 (FMLA) — caring for a new child, caring for a loved one with a serious health issue, addressing one’s own serious health issue, caring for a wounded service member or addressing certain circumstances related to a loved one’s military deployment.

The Biden-Harris plan goes further and includes paid leave for survivors of domestic violence, sexual assault or stalking to seek services and help (“safe leave”) and for workers grieving the loss of a loved one to take bereavement leave. State programs that will be in effect in 2023 and 2024 in Colorado and Oregon will include safe leave, as does New Jersey’s recently expanded paid leave program.

Addressing all FMLA reasons, at a minimum, is essential to ensure all people can benefit from a paid leave policy when they need it. About half of workers use unpaid FMLA leave to address their own health issues (51%), one-quarter use FMLA leave to care for a new child (25%) and one-fifth use FMLA leave to care for a loved one with a serious health condition (19%).

2. Gender Equity

All three proposals make paid leave equally available to people of all genders. In essence, new parents in a two-parent opposite-sex family will have 24 weeks of paid leave to care for a new child; when fathers take leave, they are more engaged in their children’s lives in the longer term, and when men take leave to care for children or loved ones, gender equity both at work and at home is enhanced.

3. Duration of Paid Leave

The FAMILY Act and the Neal plan both propose workers have access to paid leave for any one or a combination of purposes for up to 12 weeks in a 12-month period of time. The Biden-Harris plan would get there too, but the different types of leave would phase in, with shorter durations to start.

The Biden-Harris plan’s phased-in approach is not unprecedented. Massachusetts’ program implemented paid leave benefits in two phases: parents caring for new children, workers with serious health issues and military caregiving leave became available in January 2021; family care benefits will be available in July 2021. New York’s paid leave program phased in both leave durations and wage replacement rates and maximum benefit levels over four years, from 2018 to 2021. This is a way to help shift the culture and normalize paid leave within workplaces. It is also a way to keep the initial costs of the program down — something the administration may be under pressure to do given the other priorities included in its American Jobs and Families Plans and the revenue sources it has identified to fund these proposals.

4. Wage Replacement

Paid leave is only useful to all workers if the wage replacement it offers is high enough to enable people to take time away from work to provide or receive care without risking their ability to afford the basics. The FAMILY Act was drafted at a time when the highest wage replacement offered by a state program was two-thirds of a workers’ wages (New Jersey) and where the maximum amount available to a worker was $1,000 per week (California). The FAMILY Act includes each of these parameters. Studies of state policies since then have shown that even two-thirds of a worker’s wages may not be enough for low-wage workers to afford paid leave.

Recognizing the centrality of adequate wage replacement and reflecting lessons from states, both the Neal and Biden-Harris proposals include tiered or “progressive” wage replacement so that minimum wage workers receive 80 percent (Biden-Harris) or 85 percent (Neal) of their wages. Middle-wage earners receive around two-thirds of their wages under each plan as they do in the FAMILY Act, up to a reasonable cap. This reflects an approach found in all of the more recently adopted state programs, which replace 80% to 100% of low-wage workers’ wages and a smaller share of middle- and higher-earners typical wages, with maximum caps of just above $1,000 per week in several jurisdictions.

5. Family Caregiving

Both the Neal proposal and the Biden-Harris proposal recognize the need that some workers may have to care for a family member who is related by blood or affinity or for adult children, grandparents, grandchildren, siblings and in-laws. The FAMILY Act’s drafting pre-dated lessons learned from states and includes just parents, spouses, minor children and adult children incapable of self-care.

Expanding access for people with extended family members who need care is critical for the full inclusion of people of color and LGBTQ people, and is now part of every state paid leave program. The federal government has a long history of recognizing a range of family relationships in federal policies for funeral leave and other family-friendly benefits, including most recently in the paid sick leave provisions of the Families First Coronavirus Response Act, which allowed eligible workers to take leave to care for another “individual” who needed their care.

6. Employment Protections

The FAMILY Act includes anti-retaliation protections so that workers cannot be penalized for expressing an intent to take or taking leave, and employers cannot interfere with an employee’s right to take leave. The Neal and Biden-Harris plans are silent on employment protections for recipients of public paid leave benefits, although the Neal draft includes some protective language for workers in businesses that choose to continue providing paid leave benefits on their own with limited federal reimbursement.

As Congress considers paid leave legislation and updating the nation’s unpaid leave law, the FMLA, Congress should work to expand employment protections to all workers so that no worker who uses a public paid leave benefit will be fired, lose their job or face retaliation for taking paid leave and so that all workers have a right to return to their prior position or an equivalent position. Job protection that goes beyond the current scope of the FMLA will improve the take-up of paid leave benefits, especially coming out of a pandemic where unprecedented employment interruptions will affect workers’ eligibility for unpaid, job-protected FMLA leave — exacerbating gaps in FMLA coverage that even pre-pandemic excluded more than 40 percent of the workforce and disproportionately excludes lower-skill workers, workers of color and single parents.

7. Administering Agency

The Biden-Harris proposal and the FAMILY Act task the Social Security Administration (SSA) with administering paid family and medical leave, using new resources that draw on the agency’s expertise in delivering individual benefits to workers and without pulling resources away from core SSA programs like the Old Age and Survivors Disability Insurance program (OASDI). The Neal plan tasks the Department of the Treasury with administering a new paid leave program, along with new tax policies that sit within Treasury; Neal’s proposal also includes grants to states and community-based organizations that the Department of Health and Human Services would administer and which would resource state-based “navigators” for workers who need assistance with a range of family- and work-supporting policies.

The most important functions of paid leave administration are accepting applications and creating clear, plain language application processes; responding in a timely way to applications and applicant questions; determining benefits eligibility and benefit levels expeditiously; paying benefits in a timely fashion; monitoring application and benefits delivery processing times; and creating an appeals process that allows workers to be heard if they feel their application or claim has been unfairly denied or their benefit level set incorrectly. Both the Neal proposal and the FAMILY Act set out processes for this — and it will be up to Congress to provide adequate funding to ensure implementation, outreach and engagement.

8. Continued Operation of State Paid Leave Programs

The Neal plan would allow the federal government and state governments with paid leave programs that exist at the time a federal program is enacted (currently nine states plus the District of Columbia) to streamline benefits delivery to workers as long as the state programs meet the federal program’s minimum requirements. The Biden-Harris plan is silent about federal-state coordination. The FAMILY Act contemplates a regulatory process by which state and federal administrators develop coordination protocols. Note, however, that at the time the FAMILY Act was originally drafted, there were only two state paid leave programs in place and a third that was set to take effect the following year. Coordinating among as many as ten state paid leave programs would be much more complicated without statutory prescriptions.

9. Employers’ Private Plans

Only two in ten workers have access to paid family leave at their jobs, and just four in ten have personal medical leave through an employer’s short-term disability insurance program. Access is much lower for lower-wage workers and those in service industries. So, for most workers, the public program will provide new protections and benefits. However, some workers do have paid leave through their employers and some employers that offer paid leave want to continue to do so.

The FAMILY Act contemplates all workers being eligible for federal benefits but permits employers to add on to enhance the benefits available to their employees. The Neal plan includes a provision that would allow employers that choose to do so to continue to offer paid leave benefits on their own and receive a limited amount of reimbursement for the benefits they provide, as long as those benefits meet certain minimum conditions and as long as the employers offer some employment protections. The heavy brackets in the Neal draft suggest this aspect of the proposal may be subject to substantial revision and, indeed, there are many outstanding questions to answer about how this would work to ensure that workers receive paid leave that is equivalent to or better than the benefits provided at the federal level. The Biden-Harris proposal is silent on employer’s private policies.

In states that offer a “voluntary program” where employers can offer benefits to their workers directly, there is state oversight to ensure the adequacy and delivery of employer-provided benefits, enforcement and the ability for employees to seek help from the state. Any federal program should include similar protections.

10. Paid Leave Program Funding

A national paid family and medical leave program requires new revenue — but any discussion about cost must recognize that the costs of inaction — the costs of the status quo — are already high. Families lose an estimated $22.5 billion per year due to inadequate paid leave; older workers who leave work to care for an aging parent lose more than $300,000 each in income and retirement savings; the economy loses trillions of dollars in GDP due to women’s reduced labor force participation.

The Biden-Harris proposal would make paid leave funding investments through adjusting corporate and individual tax rates. The FAMILY Act, like state paid leave programs, would be funded through payroll deductions on employees and employers. The Neal plan is silent on funding so that lawmakers can “develop a design and then…address the issue of revenue,” according to Neal; presumably Neal’s plan would be paid for through adjustments to a range of other taxes and revenue sources.

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The United States could be headed toward enacting one of the most transformational new work-family economic policies in more than a generation. Any of these three approaches to paid family and medical leave — or mixing and matching elements of each — would guarantee universal access to paid leave to U.S. workers.

National paid leave would touch virtually every household in America at some point in workers’ lives. It has the potential to help people see that government policies can serve them when they are most vulnerable. It will modernize our economy and support a workforce inclusive of diverse perspectives and experiences. And it will help transform both culture and workplaces to ensure that care is valued, valuable and part of the infrastructure the country needs to thrive.