Compliance update – July 2019
Every month, Lincoln puts together the latest compliance news related to family and medical leave laws and regulations – helping you keep track of the important deadlines, compliance considerations and links to additional information.
Family and medical leave
Other paid and unpaid leave
In the news
|Breaking news as of July 15, 2019|
Oregon’s legislature passed a paid family and medical leave bill, which is headed to the Governor’s desk for her signature. By the time you read this, the Governor has likely signed the bill into law. Collections will begin January 1, 2022, with benefits payable beginning January 1, 2023.
Lincoln is working to identify how this bill impacts our products and services and will continue to share updates about the latest changes. Please look for a more comprehensive summary in our next newsletter.
What is the Family and Medical Leave Insurance (FMLI) bill?
Governor Ned Lamont signed the Connecticut paid family and medical leave insurance bill into law (Public Act No. 19-25) on June 25, 2019. This law provides wage replacement benefits to eligible employees who need to care for a family member with a serious health condition, bond with a child following birth or placement within the first twelve months, have a qualifying military exigency, deal with a covered individual’s own serious health condition, to serve as an organ or bone marrow donor, and care for a covered service member. FMLI benefits are also available for leave reasons under Connecticut’s domestic violence leave law.
Which employers must comply with this law?
All private employers must provide FMLI coverage to covered individuals through the state-run program or a private plan.
What is the private plan option?
Employers may opt out of the state-run program by instead choosing an approved private plan for the payment of family and medical benefits. The benefits for covered individuals must be equivalent to or greater than the benefits provided by the state's FMLI program. Private plans must be approved by a majority vote of the employer's employees.
When does the program become effective?
Assessment and collection of contributions for covered individuals will begin on January 1, 2021, with payment of benefits beginning by January 1, 2022.
Who is eligible?
Covered employees include individuals who have earned at least $2,325 during the employee's highest earning quarter within the base period (the first four of the five most recently completed quarters) and either:
- are presently employed,
- have been employed by an employer in the previous twelve weeks, or
- are self-employed individuals or sole proprietors who have opted in to the PFML program.
How long can employees receive benefits?
The law will provide employees with up to 12 weeks of FMLI benefits over a 12-month period. The program also provides two additional weeks of benefits for a serious health condition that results in incapacitation during pregnancy.
How much will employees receive?
Covered individuals will receive a weekly benefit that varies depending on income. A covered employee’s weekly benefits under the program are generally calculated as:
- 95% of his or her average weekly wage, up to 40 times the state minimum wage
- Plus 60% of his or her average weekly wage that exceeds 40 times the minimum wage
- Total benefits capped at 60 times the minimum wage (initially up to $840 per week based on the $14 minimum wage that will be in effect in 2022).
How is this program funded?
PFMLI will be funded entirely through employee contribution. The actual rate is not yet available, but will be set by the Paid Family and Medical Leave Insurance Authority (Authority). The rate will not be more than 0.5% of the covered individual’s wages. The amount of an employee’s earnings subject to contributions will be capped at the same amount of earnings subject to Social Security taxes (currently $132,900).
On November 1, 2022, and each subsequent November 1, the Authority may announce a revision to the contribution rate, subject to the same 0.5% cap, that must be sufficient to ensure that the state’s trust fund will achieve and maintain the target fund balance. The new contribution rate will become effective on the following January 1.
How does this law interact with the CT FMLA law?
Leave and job protection is provided under CT FMLA; wage replacement will be provided under FMLI.
- CT FMLA is an existing leave law which generally requires certain private-sector employers to provide job-protected, unpaid leave to employees for various reasons related to their health or their family members' health.
- FMLI, the new paid leave law, creates a wage replacement program to provide benefits to eligible employees taking leave for reasons allowed under the CT FMLA.
Are there any changes to the CT FMLA law?
Effective January 1, 2022, the new FMLI law also amends the CT FMLA law:
Current: The current CT FMLA law requires private-sector employers with at least 75 employees to provide eligible employees with unpaid, job-protected leave.
New: The new FMLI law reduces this employee threshold from 75 to one, thus covering all private-sectors employers in the state.
- Employee eligibility
Current: Under the current CT FMLA law, private-sector employees are eligible for FMLA leave if they have worked for their employer for at least 12 months and 1,000 work-hours over the 12-month period preceding their first day of leave.
New: The new FMLI law makes employees eligible if they have worked for their employer for at least three months immediately preceding their request for leave, with no minimum requirement for hours worked.
- Maximum leave duration
Current: The current maximum CT FMLA leave allowed is 16 weeks over a 24-month period.
New: The new FMLI law amends the maximum FMLA leave allowed to 12 weeks over a 12-month period and allows an additional two weeks of leave due to a serious health condition that results in incapacitation during pregnancy to coordinate with FMLI benefits.
- Expanded family members
Current: The current CT FMLA law allows employees to take leave for their own serious health condition or to provide care for the serious health condition of their children who are either under age 18 or unable to care for themselves, their spouses, or their parents (including in-laws).
New: The new FMLI law amends the family members for whom an employee can take leave to include a spouse, sibling, son or daughter, grandparent, grandchild or parent, or an individual related to the employee by blood or affinity whose close association the employee shows to be the equivalent of those family relationships to coordinate with the definition of family member for purposes of taking FMLI benefits.
- Employer-provided paid leave
Current: The current CT FMLA law allows an employer to require employees to use their accrued employer-provided paid vacation, personal, family, medical, or sick leave when they are on CT FMLA leave.
New: The new FMLI law requires that employers allow employees to retain at least two weeks of their employer-provided paid leave.
- Military caregiver leave
Current: The current CT FMLA law allows covered employees to take a one-time benefit of up to 26 weeks of unpaid leave when certain family members or “next of kin” in the armed forces undergo treatment for an injury or illness incurred in the line of duty.
New: The new FMLI law allows the injured armed forces member to designate someone as their “next of kin” (thus making him or her eligible for the leave and FMLI benefits) if their close association is the equivalent of a family member. (Please note that FMLI benefits for military caregiver leave does not extend to 26 weeks.)
Massachusetts, Washington, District of Columbia
Massachusetts - Massachusetts has released the final version of its PFML program regulations. The initial contribution rate, as of October 1, 2019, is 0.75 percent of all wages or other qualifying earnings or payments. Employers will need to complete their quarterly report and submit contributions for the calendar quarter (October - December) through MassTaxConnect by January 31, 2020.The full text of the regulations can be found on the Commonwealth’s website.
Washington - Starting July 1, 2019, Washington employers will report employee information to the Employment Security Department quarterly. For 2019 only, reporting for Q1 and Q2 will be due August 31, 2019. Reporting periods follow calendar quarters and are aligned with the reporting periods for unemployment insurance. More information on the WA PFML reporting process can be found on their website.
District of Columbia - Covered employers will be required to file wage reports and pay contributions on July 1, 2019 for wages paid between April 1 through June 30, 2019.
The District of Columbia is still in the process of rulemaking for its PFML law. The city has published its final regulations on employer contributions, subject to approval by the city council, and will be releasing draft regulations on paid leave benefits in 2019. More information on the DC PFML rulemaking process can be found on their website.
Quick reference for reporting and premium submission (WA, MA and DC)
Initial reporting and contribution schedule:
- WA: Submit Q1 and Q2 reports and contributions by August 31, 2019. Remaining quarters will follow schedule below.
- MA: Submit Q4 report and contributions by January 31, 2020. Remaining quarters will follow schedule below.
- DC: Submit Q2 report and taxes by July 31, 2019.
Ongoing quarterly reporting schedule:
Reports and contributions due
Q1: January, February, March
Q2: April, May, June
Q3: July, August, September
Q4: October, November, December
On June 27, 2019, California Governor Gavin Newson signed Senate Bill 83, which mandates changes to California’s paid family leave (PFL) program. The most significant change to the program is an extension of the duration of benefits from six weeks to eight weeks effective July 1, 2020. The extension of benefits applies to leave taken to care for a seriously ill family member or to bond with a new child. The new law allows each parent to take an additional two weeks of leave. Subsequently, on January 1, 2021, the list of qualifying PFL reasons for which eight weeks of PFL benefits are available will expand to include qualifying exigency.
The bill also requires the Governor to create a task force that will submit proposals by November 2019 to make additional changes to California’s PFL program, including:
- A plan to increase PFL bonding duration to six months by 2021-22. Six months would be the total duration two parents may take to bond with a new child. The individual leave entitlement for bonding per parent would be three months if used consecutively.
- Job protection for employees under PFL. Currently, job protection is afforded under federal Family Medical Leave Act (FMLA) leave, the California Family Rights (CFRA) leave and the New Parent Leave Act (NPLA).
- Increasing wage replacement for low-wage workers up to 90% from the current 60-70%.
Employers should update their policies and handbooks to reflect the increased leave duration to eight weeks effective July 1, 2020. Employers with VDI plans will need to make changes to their plan documents as well. Lincoln will be closely monitoring the Governor’s task force and any recommendations that are made, as well as the Employment Development Department for forthcoming regulations and guidelines on how to implement these changes.
Effective immediately, New Jersey employers will no longer have to complete an employer statement for employees’ temporary disability or family leave claims. This only applies to state-administered plans. When a temporary disability or family leave claim is approved by the Division of Temporary Disability and Family Leave Insurance (Division), employers will be issued a "Notice of Eligible Determinations" (Form D20). If it indicates that benefits are being issued for days that the employee may have worked, received vacation pay, received sick pay, employers should notify the Division immediately. More information on the change to the NJ application process can be found on their website.
Other Paid Leave
Effective January 1, 2021, this new paid leave law provides employees with earned paid leave at the same wage rate as the employee normally earns. This applies to private sector employers with at least 10 employees for more than 120 days in any calendar year. Under the enacted law, employees will accrue one hour of paid leave for every 40 hours worked, up to 40 hours of paid leave per year. Employees are required to provide reasonable notice to their supervisor of their intent to use earned leave, except in cases of emergency, illness or other sudden reason for taking earned leave. Use of leave must be scheduled to prevent undue hardship on the employer, as reasonably determined by the employer.
Although it is presented as a universal paid leave law, this regulation actually functions like a paid sick leave law (that generally allows leave for any reason) given its accrual rate, carryover rules, and payment of benefits.
Effective January 1, 2020, this new paid leave law provides employees earned paid leave at the same wage rate as the employee normally earns. This applies to private sector employers with at least 50 employees. Under the enacted law, employees will accrue 0.01923 hours of paid leave for every hour worked, up to 40 hours of paid leave per year. Employers may set a minimum increment (up to four hours) for taking paid leave. An employee may use paid leave without providing a reason to his or her employer. Similar to the new Maine law, this program functions like paid sick leave.
Other Unpaid Leave
Effective October 1, 2019, the Organ Donation Leave law provides unpaid leave to employees for up to 60 business days in any 12-month period to serve as an organ donor. This applies to employers with at least 15 employees. Eligible employees must have been employed by that employer for at least a 12-month period and 1,250 hours during the previous 12 months. To receive organ donation leave, an employee must provide written physician verification to his or her employer. Organ donation leave may not be taken concurrently with any leave taken under the federal Family and Medical Leave Act (FMLA).
Effective January 1, 2020, a new pregnancy accommodation law will require employers with six or more employees to reasonably accommodate the needs of employees due to pregnancy, childbirth, or a related medical condition. Reasonable accommodations may include, but are not limited to:
- Acquisition or modification of equipment or devices
- More frequent or longer break periods or periodic rest; assistance with manual labor
- Modification of work schedules or job assignment
The law will also require employers to post and provide written notices to new employees, existing employees (within 180 days after the effective date of this law), and any employee who informs the employer of their own pregnancy, within 10 days after the employer receives the information. The Oregon Bureau of Labor and Industries is expected to issue guidance and educational materials on implementing this law.
In the news
JPMorgan Chase Bank (Chase) announced that they have agreed to pay a $5 million settlement in a class-action gender discrimination lawsuit alleging that their paid parental leave policies discriminated against fathers. At the time the lawsuit was filed, Chase’s parental leave program provided a 16-week paid parental leave benefit for all primary caregivers and a two-week paid parental leave benefit for all non-primary caregivers. Until revising its procedures in December 2017, Chase assumed that biological mothers are the primary caregivers and fathers are the non-primary caretakers. The agreement calls for Chase to continue its current gender-neutral parental leave policy and compensate fathers who were denied access to paid parental leave on the same terms as mothers from 2011 to 2017. Chase also agreed to conduct training and monitoring regarding its parental leave policy to support gender-neutral implementation.
In light of this settlement, employers are encouraged to work with their legal counsel to make sure any processes for determining employee eligibility for leave – especially primary/secondary caregiver status designations – are aligned with all applicable employment and anti-discrimination laws.