The Paid Leave Trend Continues at the State and City Level, With Federal Encouragement

As the Obama administration continues to push for federal paid family and sick leave requirements, it’s also prompting state and local governments to take matters into their own hands.

On May 5, the Labor Department announced that it’s offering $1 million in federal grants to allow state, county or city governments to research paid leave laws. This is at least the third time in the past two years that federal grant opportunities have been handed down for states and localities to pursue such legislation.

At ground level, the landscape is already shifting. Just five months into 2016, San Francisco and New York state have enacted groundbreaking laws requiring employers to provide workers with paid family leave; Vermont joined the nascent state-mandated sick leave trend; and Los Angeles is fast-tracking paid sick leave legislation that could take effect as early as this summer.

Employees and family rights groups tout the work-life benefits that these laws bring, but business groups oppose them because they add to overhead costs and create an administrative burden. Meanwhile, as the number of cities and states with paid leave legislation grows, employers should carefully review requirements for the states and cities in which they operate.

Here are the details of the biggest developments.

Paid parental leave in San Francisco: In perhaps the most significant legislation passed thus far in 2016, San Francisco became the first U.S. city to require private-sector employers to provide workers with paid parental leave. The law goes into effect on Jan. 1, 2017 for employers with 50 or more employees; July 1, 2017 for employers with 35 or more workers; and Jan. 1, 2018 for businesses with 20 or more workers.

The city’s law requires private employers to fund up to 45 percent of workers' pay when they take paid parental leave. Employers must pick up the difference between an employee's salary and what the state disability insurance fund provides when a worker takes leave, up to $924 (45 percent of this year's maximum weekly benefit under the state program).

Paid family leave in New York: New York passed a statewide paid family and medical leave law on April 1. The law has been criticized by the Business Council of New York State as the “least business-friendly” in the country, saying it provides at least twice as much leave as afforded in any other state and places an undue burden on businesses. The leave is funded through an employee payroll deduction, to be phased in beginning in 2018. The law will be in full effect by 2021. At this time, employees will be eligible for 12 weeks of paid family leave at 67 percent of their average weekly wage.

Paid sick leave in Vermont—and possibly L.A.: In March, Vermont became either the fifth state (after California, Connecticut, Massachusetts, and Oregon) or the sixth (if you count the District of Columbia) to require employers to provide employees with paid sick leave. Beginning Jan. 1, 2017, employers must give employees at least three paid sick days each year. In Jan. 2019, that requirement will increase to five paid sick days per year.

On April 19, the Los Angeles City Council passed a motion directing the city attorney to draft an ordinance requiring employers to provide workers with 48 hours of paid sick leave per year. The provision includes amendments for a one-year implementation delay for businesses with 25 or fewer employees, and an allowancefor employers that requires workers to provide verification of sick leave for three or more consecutive workdays. If it is passed, Los Angeles will join 16 other U.S. cities with paid sick leave laws.

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