Biden proposes a federal plan offering paid leave for all employees
At his first address to the joint sessions of Congress in April, President Biden unveiled an ambitious budget plan with several provisions aimed at helping families and the country’s economic recovery following the COVID-19 pandemic.
The American Families Plan (AFP) includes a comprehensive paid family and medical leave plan, which would be funded through tax increases. The plan would provide workers with up to 12 weeks of paid leave, phased in over a 10-year period.
What the Paid Family Leave plan includes
Biden has asked Congress to develop and pass a plan to ensure workers will receive at least a portion of their wages for up to 12 weeks to:
- Care for a new child in the home
- Attend to their own or a loved one’s health issue
- Find safety from sexual assault, stalking or domestic violence
- Attend to the needs of a loved one’s military deployment
- Bereave the death of a loved one
As worded, the plan may expand the categories of eligible workers. Under current FMLA guidelines, family members are specifically defined.
The term “loved one” broadens the ability for workers to take leave for family members or partners who are not listed under the current definitions.
As proposed, the plan offers up to 12 weeks of paid leave by the 10th year of the program. If passed, it will guarantee 3 days of bereavement pay per year starting in the first year. As worded, the amount of leave will increase over time to the maximum 12 weeks by year 10 of the legislation.
Although not yet defined, the plan proposes up to 80% of wages for the lowest paid workers, capped at $4,000 a month. The minimum wages provided for others would be two-thirds of average weekly wages replaced. The administration estimates the plan will cost $225 billion over a decade. Funding is proposed through tax increases.
It’s unclear whether paid leave will be required by employers currently mandated to provide leave under the FMLA – those with 50 or more full-time or full-time equivalent staff; or whether employees will need to satisfy the FMLA’s current 1 year/1,250 hour minimum work requirement for eligibility. Those specifics would be addressed under the bill drafted by Congress.
Biden’s reasoning for paid family leave
Biden’s American Families Plan notes: “Paid family and medical leave supports workers and families and is a critical investment in the strength and equity of our economy.” According to the Bureau of Labor Statistics, 78% of working Americans have access to some paid sick leave. The average cost to business, per their data, is $.045 per employee hour worked.
Under the 2020 Federal Employee Paid Leave Act federal employees have access to 12 weeks of paid parental leave. However, for civilian workers, the percentage of paid leave participation is low. Less than 20% of private sector workers have access to paid family leave: for low wage earners (less than $14 per hour) only 8% have paid family leave access.
The cost of paid family leave
The proposed nearly $2 trillion American Families Plan will need to be developed and passed by Congress before it takes effect, likely no sooner than 2022. Similar, recent, proposed legislation has failed including the Workflex in the 21st Century Act, the FAMILY Act, and a bill that would allow new parents to draw funds from their own Social Security account for leave pay. None were enacted.
The Biden plan is expected to be paid for by raising taxes on Americans earning over $400,000 per year, increasing the corporate tax and removing some of the tax breaks and incentives passed in the 2017 Tax Cuts and Jobs Act.