Reconciliation: Paid Family Leave

September 16, 2021

Part of the massive Build Back Better Act, informally referred to as the reconciliation bill, includes universal paid family and medical leave. Starting in July 2023, workers would be eligible for up to 12 weeks of annual federal benefits to replace lost wages due to time off for medical or caregiving for a sick family member.

The program covers all workers including full-time and part-time, gig workers and other self-employed workers, public and private sectors, and without regard to employer size or tenure.

Specifically, the proposal would:

  • Cover workers through a qualifying “legacy state” or comprehensive employer-sponsored program for which the state or employer is reimbursed by the federal government.
  • Extend to care included under the Family and Medical Leave Act (FMLA) and expands the types of family relationships which allow individuals to seek caregiving leave. Bereavement is also a qualified caregiving activity but is limited to three workdays.
  • Allow employees to apply for benefits if they have or are anticipating having at least four caregiving hours in a week, awarded on a sliding scale based on worker’s annual income.
  • Provide for grants to legacy states equal to the amount of benefits that would have been paid in a given year and grants to eligible employers equaling 90 percent of the projected national average cost per employee. Employer-sponsored plans must be as good as or better than the public plan.
  • For employers with fewer than 50 employees, provides for small-business assistance grants equal to 2.5 times the average weekly wage if the employer agrees to employment protections and other attestations.

NSBA opposes the mandated paid leave proposal as it will create complex new regulations for small employers. Since the majority of business owners already offer some kind of paid sick leave, any additional requirements could cause productivity to decrease and compliance cost to increase from new mandates. Furthermore, employees and employers should be able to determine for themselves the allocation of compensation between money, paid sick leave, paid vacation leave, health insurance, retirement and other employee benefits. There is no one-size-fits-all approach that meets the needs of all employees or employers.

Urge lawmakers to oppose the paid leave mandate provision.