Many U.S. workers do not have a guaranteed source of pay to cover leave following the birth of a child or to bond with a new addition to the family.
Lack of access to paid parental leave can create a financial hardship for employees, and research has shown that it can be particularly challenging for part-time workers and employees with lower incomes and without college degrees.
In her article “Helping Employees Access Pay Resources During Unpaid Parental Leave” in the March/April issue of Benefits Magazine, author Stephanie J. Lowe writes that employers that don’t offer a paid parental leave program may want to consider helping employees navigate other paid leave options. Lowe is an attorney and senior counsel in the San Diego, California office of Liebert Cassidy Whitmore.
Although paid parental leave has been a hot topic for the past few years, the United States does not have a federal paid parental leave program. Employees who work for a covered employer do have access to unpaid leave through the federal Family and Medical Leave Act (FMLA), which provides up to 12 weeks of unpaid, job-protected leave to care for qualifying reasons, including the birth of a child and to bond with a newborn child, in addition to a placement with the employee of a child for adoption or foster care.
How can workers access pay if their employer doesn’t offer its own internal paid parental leave program? Lowe identifies the following sources.
Vacation and Sick Leave
One of the most common sources of pay during parental leave is an employee’s own accrued vacation, sick leave or paid time off (PTO), she explains. FMLA regulations permit employees to use their own accrued paid leave during unpaid FMLA leave in some circumstances. And employers also can require the employee to substitute paid accrued leave for unpaid FMLA leave.
“It is important to note that an employee who uses paid accrued leave during unpaid FMLA leave must use a type of paid accrued leave that the employer’s applicable leave policies permit. This means that the employee must satisfy the requirements of the employer’s normal leave policy before substituting in their paid leave for unpaid FMLA leave,” Lowe adds. For example, some sick leave policies may not allow the employees to use sick leave to take time off to bond with a child because the policies require the employee or family member to have an illness, disease or medical condition.
Lowe also notes that human resources (HR) and benefits professionals should make sure that employees understand their leave policies and that they fully fund these benefits—in other words—they have to earn, accrue and save their own paid leave entitlements to use them during unpaid parental leave. HR and benefits professionals should communicate how much accrued and available vacation, PTO and sick leave an employee has before the employee begins parental leave, she writes.
State Paid Family Leave Programs
These programs cover leave for a range of reasons, including the birth of a child and to bond with a baby or a foster or adopted child. Some states fund these programs solely with employee payroll deductions, while other states use funding from a combination of employee and employer deductions, Lowe explains.
Eleven states currently have mandatory paid family leave programs for eligible employees (California, Colorado, Connecticut, Delaware, Massachusetts, Maryland, New Jersey, New York, Oregon, Rhode Island, Washington) as well as the District of Columbia. Three states provide a choice for employers and employees to voluntarily participate in paid family leave programs (New Hampshire, Vermont, and Virginia). More states have enacted paid family leave laws that will take effect in future years. These state programs provide partial wage replacements, so an employer and employee should coordinate state paid family leave benefits with other paid leave resources when they are available, Lowe suggests.
Practical Tips for Administering Paid Parental Leave Programs
Lowe offers the following tips to benefits and HR professionals attempting to coordinate different sources of pay and navigate varying state requirements.
*If you have employees in a state that offers a state paid family leave program, be aware of any employee notification requirements. For example, California requires employers to provide an informational brochure to employees about paid family leave when they require leave to bond with the new child.
*Pay attention to state leave eligibility requirements. These vary across the states and include minimum lengths of employment and employee and/or employer contributions.
*Make sure to monitor the different sources of pay. One of the complicated issues is confusion over which sources of pay apply during which weeks of parental leave, which sources are only partial wage replacements and what sources of pay fill in for the rest of the employee’s wages.
*Pay attention to the employee’s transition from the period of pregnancy disability to baby bonding leave. The pregnancy disability period and the baby bonding period are both covered under the 12 weeks of job-protected FMLA leave, but the sources of pay can differ.
*Regularly report to payroll staff when an employee’s parental leave status changes, such as when an employee ends the pregnancy disability period and enters the baby bonding phase.
“With assistance from HR and benefit professionals, employees can gain knowledge about the types of pay resources specifically available to them during unpaid FMLA leave, which allows employees to move forward with planning their time off and entering this exciting stage in life,” Lowe concludes.