In recent years, there has been a major shift in how American workers access paid family and medical leave. While the U.S. does not have a federal paid leave program, individual states are stepping up to fill this crucial gap. Lets take a deep dive into what employers should know and be on the look out for when it comes to State Paid Family & Medical Leave (PFML) programs.
What is State Paid Family & Medical Leave?
State PFML programs are mandatory insurance-style benefits that provide paid time off for employees experiencing qualifying life events. These programs ensure workers continue receiving income during their time away from work, acting as a safety net that assists employees with balancing their work with life's major challenges.
Common Qualifying Life Events:
Personal medical conditions
Caring for family members with serious health conditions
Welcoming a new child through birth, adoption, or foster care
Other qualifying family and medical situations
Core Program Elements
Location - Based Coverage
PFML coverage will depend on where your employees work, rather than where your company is headquartered. For example:
An employee working in Washington state must be covered by Washington's PFML program, even if the company is based in Oklahoma
Remote workers are covered by the PFML laws of their work location state
Multi-state employees may need individual evaluation for coverage determination
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Current Company Benefits
Some employers offer some sort of employer-paid or voluntary STD plan, or paid parental leave for new parents. In most cases, these existing plans don't satisfy PFML requirements because they typically:
Don't cover all eligible employees
Don't provide benefits for all qualifying reasons
Offer lower benefit amounts than required by law
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Funding Mechanisms
The details of how each state funds its PFML program will vary enormously. States offer three primary ways to fund PFML programs:
Payroll Tax Contributions: In most states, this is the standard funding mechanism. Employers and/or employees contribute a percentage of wages through regular payroll deductions, similar to Social Security taxes.
Private Insurance Policy: Companies can purchase approved insurance plans from authorized carriers to meet state requirements, offering more control over program administration. This is not available in all states.
Self-Funding: Large organizations may opt to pay benefits directly, though this requires substantial financial reserves and state approval.
Benefit Coordination
Some states permit employees to combine PFML with other paid leave to reach 100% of their regular wages, while others have strict limitations on benefit combinations. How PFML coordinates with these other benefits varies from state to state, those benefits being:
Short-term disability
Paid time off (PTO)
Vacation Time
Sick Leave
Employer-provided parental leave
Current PFML Landscape
Active Programs
California
Colorado
Connecticut
District of Columbia
Hawaii
Massachusetts
New Jersey
New York
Oregon
Rhode Island
Washington
Upcoming Programs
Action Steps for Employers
Map Your Workforce: Review employee work locations and identify which states apply within your organization.
Evaluate Benefits: Compare your current leave policies against PFML requirements and adjust as needed.
Plan Ahead: Budget for contributions and update your systems for new or upcoming state programs.
Stay Compliant: Monitor program changes and regularly review your policies with benefits experts.
Looking Forward
The PFML landscape continues to evolve and change within more states. Successful navigation of these requirements requires ongoing attention to:
New state program implementations
Changes to existing programs
Coordination with other leave benefits
Employee communication strategies
Summary
State Paid Family & Medical leave programs are expanding across the U.S., requiring employers to carefully navigate various state requirements. Effective PFML management requires understanding that coverage is based on work location, existing benefits often need supplementation, and funding mechanisms differ by state. As these programs continue to change, it is important for multi-state employers to stay up to date on state requirements and compliance.