Operational Challenges of Paid Family and Medical Leave Laws – Past, Present and Future

It doesn’t seem that long ago that our biggest challenge as administrators or employers was compliance with the federal Family and Medical Leave Act of 1993 (FMLA).[1] Prior to FMLA, there were no federal requirements to provide job-protected time off for care of an employee’s own or a family member’s illness, or for bonding with a newborn or newly placed child, so the new law was a major change how private businesses were required to administer employee leave.

At the time of FMLA’s passage, it looked like it was the beginning of a sea change in employee leave benefits. I, and many others that I spoke to at the time, assumed that it was only a matter of time until the job protection requirements were expanded to a larger pool of employees and that a federal paid leave requirement would not be far behind. In reality, it was 15 years before the FMLA was even amended to include coverage for workers who needed to take time off related to family members in the military. Today, the law is still unpaid and not applicable to small employers. 

So, what did happen around mandatory paid leave for those periods of leave that were covered by unpaid FMLA? Not much, for a very long time. Eventually, states moved to fill the gap in mandatory benefits.

PFL Expands Existing SDI Programs

Five states – California, Hawaii, New Jersey, New York, and Rhode Island – have had state-mandated disability insurance (SDI) programs in place for many years.  The programs provide employees with various levels of pay replacement when they are disabled due to their own injury or illness. In 2002, using the existing SDI framework as a basis, California was the first state to take action to address the issue of mandated paid leave for the care of family members. The state passed a law creating a paid family leave (PFL)[2] benefit financed through a payroll tax on employees, like the one used to fund SDI, and administered by the state.[3] It was six more years before any other states followed California’s example.

However, the next three states to enact paid family leave – New Jersey[4] in 2008, Rhode Island[5] in 2013, and New York[6] in 2016 – followed a similar path by building on their existing SDI programs. As was the case in California, the new benefit programs covered only paid leave for family members because the existing SDI programs addressed the need for paid leave for the care of the employee’s own disability. Hawaii is the only state with an SDI program in place that has not added a PFL program – yet. There are currently four bills pending in the legislature to do just that.

Building the PFL programs using the structure of the existing state disability programs meant that employees were covered through a state fund, and the states administered the leave through their existing processes. California, New Jersey, and New York also allowed employers to satisfy the PFL benefit requirements using voluntary or private plans. However, California did not allow the use of voluntary plans until 2010[7], and Rhode Island still requires paid leave for the care of family members to be administered through the state.[8] Allowing employers to use voluntary or private plans to administer the PFL benefit in eligible states meant that employers had more involvement in the leave process and were better able to coordinate the various leave benefits they provided to employees. This opportunity had not previously been available to them when California initially implemented PFL.

Moving from PFL through PFML & Beyond

In 2017 the District of Columbia enacted the next paid family leave benefits program[9].  It was the first locality to create a PFL benefit without the existence of a state-mandated disability program to layer on top of.  As a result, the program includes both leave for an employee’s own illness – medical leave – and the traditional PFL, so it is a paid family and medical leave (PFML) program. It was also the first locality to fund the benefit through employer contributions only.  DC was the first locality to include both paid family and paid medical leave in one program.

All the remaining states that have enacted mandatory paid leave for private employees in recent years – Washington[10] enacted in 2017, Massachusetts[11] enacted in 2018, Connecticut[12] enacted in 2019, Oregon[13] enacted in 2019 with benefits available beginning 9/3/2023 and Colorado[14] enacted in 2020 with benefits available beginning 1/1/2024 – have included paid leave for both medical and family reasons.  This indicates we will likely see laws going forward that address both types of paid leave under a single program.  We may also see an expansion of the availability of paid leave like the addition of paid leave for reasons related to domestic violence that is included in New Jersey, Connecticut, Oregon, and Colorado.

Based on these, we are starting to see some patterns emerge in how PFL/PFML laws will develop moving forward.  But there is always an exception to every rule. 

In this case, the exception is New Hampshire (NH). Rather than enacting a mandatory PFML law applicable to private employers, NH passed legislation to create a PFML program that will provide paid leave to state employees and allow other public employees and private employers and employees to participate in the plan voluntarily, turning the concept of mandatory paid family and medical leave for private employees on its head. 

Details around how exactly the program would work are scarce, but the state recently issued a request for proposal (RFP) seeking a commercial insurance carrier to fully insure and administer the plan for the state. The RFP gave some additional insight on how the state envisions the benefit administration, but there are issues with what the legislation enacting the program says and what the RFP outlines, so we will have to wait to see how those disconnects are resolved. 

However, we know if NH PFML is voluntary for private employers, that creates another variation for insurance carriers, third-party administrators and employers to address. Finally, to add one more twist to an already twisted path, there are currently two separate bills pending in the NH legislature to repeal the PFML law in its entirety.      

What about Federal Paid Leave?

A discussion on the status of the PFL/PFML arena would not be complete without a review of what is happening at the federal level.  As I discussed at the outset, many of us thought that the passage of federal FMLA in 1993 would lead to the passage of a federal PFML. There have been many efforts over the years to make that happen, but none of them have been successful.

There was some progress on federal paid family and medical leave in 2020 stemming from efforts to address the need for paid leave due to coronavirus-related care of an employee’s own illness or the illness of family members, but those benefits were temporary and have since expired. For a brief period last year, it looked like federal PFML proponents were going to be able to move PFML legislation forward as part of President Biden’s broad package of health, social and climate change policies, but once again, those efforts fell short. President Biden and a majority of Democrats in Congress are still talking about creating a national paid family medical leave program, but other priorities have so far prevented that from happening.

Addressing the Operational Challenges of PFL & PFML

So, what does the evolution at the state level of the benefit types and requirements mean for insurance carriers, third-party administrators, and employers?

Angie Brown, Sales Director and Absence Practice Leader, and I recently hosted a roundtable at the Disability Management Employer Coalition (DMEC) 2022 FMLA/ADA Compliance Conference to discuss that question.  It was clear from participants’ comments that everyone is struggling equally with the operational challenges of implementing and administering the state PFL/PFML laws that have resulted from the various approaches states have taken to implementation and regulation. We are a long way from those simpler times when California initially implemented PFL. Each state that enacts a new PFML law is adding its own “stamp” to the process – resulting in additional layers of complexity every time a new PFL/PFML law is enacted and implemented.

We shared our recommendation on concentrating on what action they can take to impact the legislation and regulations at the state level to help reduce this added complexity moving forward. We talked with participants about examples of legislation and regulations written in ways that are not practical to administer and that create confusion for both employers and employees.

Suppose subject matter experts submit comments on pending legislation and regulations or show up to public hearings to share their expertise. In that case, lawmakers will often listen, and we will be able to avoid repeating the common mistakes we have seen. Our experience is that legislators and administrative agencies appreciate engagement from impacted entities and want to work through areas that raise concerns.  We discussed options to share thoughts and suggestions with government entities without publicly expressing any concerns about the PFL/PFML legislation, statutes, or regulations by working through coalitions or organizations representing impacted groups.  Examples include working with the state Chamber of Commerce or state-level employer groups. 

However you choose to be involved, sharing your experience and expertise can make a difference in the final product that impacts everyone who has a role in implementing, administering, or using PFL/PFML.       

As we wait for some action on PFML at the federal level, more states are likely to take action to provide these benefits to their citizens.  The latest example is Maryland.  On March 30, 2022, the Maryland legislature passed a bill creating a PFML benefit in that state.  Governor Larry Hogan vetoed the measure on April 8, but the General Assembly voted to override the veto the next day. Benefit will be available under the new law effective January 1, 2025.

Ideally, insurance companies, third-party administrators and employers could have offered their experience and expertise to Maryland legislators as they were writing the bill, but now that we have a new PFML law to stand up, you can take the advice that Angie and I offered during the roundtable discussion.  Reach out to the legislators, contact the implementing agency with comments including sharing how based on your experiences with other PFL/PFML laws what actions can be taken to simplify and streamline leave administration for everyone’s benefit and attend the public hearings to comment on proposed regulations or raise concerns. 

State PFL/PFML laws will continue to spread, but we can all take action to reduce the challenges they create and improve the experience for everyone.


[1] 29 U.S.C. 2601, et seq.; 29 CFR Part 825

[2] Cal. Unemp. Ins. Code § 2601 et seq.

[3] Overview of California’s Paid family Leave Program, DE 2530 Rev. 5 (1-22) (INTERNET)

[4] N.J. Stat. Ann. § 43:21-25 et seq.

[5] R.I. Gen. Laws § 28-39-1 et seq.

[6] N.Y. Workers’ Comp. Law § 200 et seq.

[7] Overview of California’s Paid family Leave Program, DE 2530 Rev. 5 (1-22) (INTERNET)

[8] R.I. Gen. Laws § 28-39-1 et seq.

[9] D.C. Code Ann. § 32-541.01 et seq.

[10] Wash. Rev. Code 50A Family and Medical Leave (Revised Code of Washington (2022 Edition))

[11] Mass. Gen. Laws Ch. 175M Family and Medical Leave (The General Laws of Massachusetts (2022 Edition))

[12] Conn. Gen. Stat. 31-49e et seq. (General Statutes of Connecticut (2022 Edition))

[13] ORS Chapter 657B Family and Medical Leave Insurance (Oregon revised Statutes (2022 Edition))

[14] C.R.S. §§ 8-13.3-501 et seq. (Colorado Revised Statutes (2022 Edition))

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