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The State of Paid FMLA: Thirteen States and Counting

By: Jen McCormick, Esq.

Crucial healthcare and employee benefits issues were addressed during President Biden’s recent State of the Union, including a commitment to expanding paid family and medical leave. Thirty years ago, the Family and Medical Leave Act (FMLA) was passed and created new opportunities for employees faced with the difficult decision of having to choose between work and family. FMLA allows eligible employees to take unpaid, job-protected leave for family and medical reasons and continue their group health coverage.

Over the past thirty years, however, the needs of working families have changed and the US remains one of the only developed countries that does not have a national policy for paid time off for new parents. Access to leave (unpaid) leaves a gap as many employees decline leave due to financial reasons.   

Economists studied the impact and found that paid leave benefits the economy by improving employee retention and efficiency and increasing the number of individuals in the workforce (especially women), and helps children from all backgrounds. It could not only help with economic growth, but also with gender equity. As noted by the Biden-Harris Administration, we should expect to see more efforts to increase access to family and medical leave so employees can both care for and financially support their families.

Momentum is growing not only at the federal level, but also at the state level.  Thirteen states and the District of Columbia have enacted paid family leave, and a bill is currently likely to be passed soon for Illinois employees. What does this mean for employers and self-funded plans? Paid leave laws at the state level need to be analyzed carefully to ensure the subtle details are captured and updates are made to all employee materials – including the handbooks and plan documents.  Stay alert as more efforts to expand paid leave are made at the state and federal level and be sure to make timely updates to plan materials!