Paid Family Leave Gets Hill Attention

July 18, 2018

On July 11, the Senate Finance Subcommittee on Social Security, Pensions, and Family Policy held a hearing entitled, “Examining the Importance of Paid Family Leave for American Working Families.”

Testifying were two Senators, Kirsten Gillibrand (D-NY) and Joni Ernst (R-Iowa). Sen. Gillibrand spoke about her Family and Medical Insurance Leave Act (FAMILY Act), which is essentially paid Family and Medical Leave Act (FMLA) leave funded through taxes on both employees and employers.

Her bill—S. 337—establishes the Office of Paid Family and Medical Leave within the Social Security Administration (SSA). The bill entitles every individual to a family and medical leave insurance (FMLI) benefit payment for each month beginning on the first day of the month in which the individual meets the criteria specified below and ending 365 days later (benefit period), not to exceed 60 qualified caregiving days per period.

An individual qualifies for such a benefit payment if such individual:

  • is insured for disability insurance benefits under the Social Security Act at the time an application is filed;
  • has earned income from employment during the 12 months before filing it; and
  • was engaged in qualified caregiving (any activity for which the individual would be entitled to leave under the Family and Medical Leave Act of 1993), or anticipates being so engaged, during the 90-day period before the application is filed or within 30 days after.

The bill prescribes a formula for determination of an individual’s monthly benefit, as well as for the maximum and minimum amounts. An FMLI benefit payment will be coordinated with any periodic benefits received under a state or local temporary disability insurance or family leave program. The bill prescribes criteria that make an individual ineligible for an FMLI benefit payment and specifies prohibited acts by an employer and penalties for violations. The bill also establishes the Federal Family and Medical Leave Insurance Trust Fund. FMLI benefit payments can be made only from this fund.

According to the Senator, no amounts from the Social Security Trust Funds or appropriated to the SSA to administer Social Security programs can be used for FMLI benefits or administration. The bill amends the Internal Revenue Code to impose a tax on every individual and employer, all self-employment income, and every railroad employee, employee representative, or railroad employer to finance the Federal Family and Medical Leave Insurance Trust Fund for FMLI benefits.

Sen. Ernst, on the other hand, endorsed a nascent plan that would allow new parents to receive paid leave by drawing on their Social Security payments and subsequently delaying their receipt of benefits upon retirement. Sen. Ernst is working with senators Mike Lee (R-Utah) and Marco Rubio (R-Fl.) on this plan, and they expect to introduce a bill later this week.

Sens. Ernst, Rubio and Lee have been supportive of a proposal that the conservative Independent Women’s Forum (IWF) released earlier this year that would allow people to get paid parental leave by collecting early Social Security benefits. In exchange they would defer collecting benefits for a short time when they retire in an effort to offset the cost. Under IWF’s proposal, new parents would be able to get up to 12 weeks of paid leave that for an average wage earner would amount to about 45 percent of their wages. Many expect their proposal will be very similar to the IWF, yet, little details have been released.

The idea of a federal paid family leave program has long been a priority for Democrats, with conservatives raising concerns about creating a costly, large government program. But lately there has been growing interest by Republicans to address the issue and develop a conservative approach. The Republican tax law signed last year created tax credits for employers who offer paid leave, and some Republican lawmakers are interested in building on that effort.

Ivanka Trump, the president’s daughter and adviser, is viewed as key to Republicans’ paid family leave efforts. She has met with lawmakers on the topic and championed a six-week parental leave program linked to unemployment insurance, a proposal that President Trump backed with $25 billion in his 2018 budget proposal and $19 billion in his 2019 budget proposal.