In response to President Obama’s 2015 State of the Union Address and subsequent urging by the U.S. Department of Labor, state and local governments across the country have enacted paid leave mandates requiring employers to provide paid sick and parental/family leave. These laws raise labor costs, increase administrative burden, reduce employers’ competitiveness, increase unemployment, reduce productivity, jeopardize existing leave benefits and limit employers’ flexibility to design leave benefits packages for their unique workforces. Additionally without federal uniformity, states and local governments have enacted laws with unique characteristics creating compliance headaches for large multi-state employers many of which already voluntarily offer generous paid leave policies.
Five states (California, Connecticut, Massachusetts, Oregon and Vermont) and the District of Columbia have enacted paid sick leave mandates, generally modeled after the federal Executive Order 13706 and H.R.932 and S.497 – Healthy Families Act. Fourteen states have enacted laws that prevent local governments from requiring employers to provide paid sick leave. Meanwhile the list of cities that have enacted paid sick leave mandates is growing with Minnesota’s St. Paul voting on September 7 to require employers to offer it starting July 1, 2017.
On the paid parental leave front, three states (California, New Jersey and Rhode Island) have state programs that provide wage replacement for a specified amount of time for bonding with new children and care for a seriously ill family member. New York will join these states in 2018. These programs are funded by employee-paid payroll taxes with the exception of San Francisco that in 2017 will require local employers to wrap around California’s program and make employees whole for up to 6 weeks of parental bonding.
The Business Group supports voluntary family-friendly work policies, but does not support mandates for paid sick or parental leave. Employers should have flexibility to design leave benefits to fit their own unique workforces. Additionally, we believe that state and local PSL laws should be federally preempted. To the extent not preempted, they should follow employers’ existing payroll and leave policies and employer-deemed compliance standards should be straightforward.
While state and local governments have been busy on mandated paid leave, Congressional activity has been muted. Given the upcoming November election and the limited legislative calendar, we expect that mandated paid leave will have to wait until the next Administration. If Congress passes mandated paid leave legislation, a key issue of importance will be federal preemption of state and local laws and employer-deemed compliance for those with generous leave policies. In the meantime, we expect increased local activity with Cook County, IL and Albuquerque, NM to be the next local governments to require mandated paid sick leave.
For more information on employers’ leading practices on paid leave, see the members-only survey reports on Parental Leave and Paid Family Sick Leave and Paid Leave Policies: PTO vs. Traditional Vacation and Sick Leave.