Volume 3

How Do You Stay Compliant With State Paid Family Leave Laws?

By Sushma Tripathi


Compliance with paid family leave regulations is growing increasingly complex.

While federal law and several state laws provide unpaid job-protected family leave for eligible employees, only a handful of states pay workers who need to take time off to care for a newborn or a relative with a serious medical condition. The number of states with paid family leave laws is expected to grow. However, this will add complexity to certain payroll tasks regarding benefits administration.


The following information will inform you about current laws and proposals related to this subject and provide ways to help you comply with paid time off regulations.

The Paid Family Leave Landscape

Over the past few years, many paid family leave laws have been proposed on the state level. However, there are no federal legal requirements for paid family leave. The only federal protection is through the Family and Medical Leave Act of 1993 (FMLA). Under FMLA, eligible workers can take up to 12 weeks of unpaid leave for certain covered reasons, such as caring for a new baby or sick family member. However, the mandate only applies to employers with at least 50 employees.


Currently, only California, New Jersey, Rhode Island, New York and the District of Columbia have paid family leave laws in effect, but many states are contemplating enacting their own. In 2018, 21 states were considering paid family leave laws, and even more are expected to evaluate legislation in the future.


Massachusetts and Washington, for example, plan to initiate paid family leave in 2020 and 2021, respectively. Vermont voted to advance legislation that would require a statewide paid family leave program as well, and the initiative is scheduled to launch in the last quarter of 2020. Oregon lawmakers are also considering a bill for statewide paid family leave, and California anticipates an expansion to include military exigency in the beginning of 2021.


Adding to the burden, paid leave requirements vary by state. For example, California and Rhode Island fund their programs through an employee payroll tax, whereas New Jersey, New York and Washington impose payroll taxes on employers and employees.


Other differences include wage replacement rates. For instance, wage replacement rates can range from 50 to 90 percent in these states. And the length of family leave varies from four to 12 weeks ― and even more for a medical disability.


Momentum is also building for a federal paid family leave initiative. The New Parents Act allows parents to draw from their Social Security benefits for paid leave after the birth or adoption of a child for up to three months in exchange for reduced or delayed Social Security benefits.


Other measures that have been introduced to Congress include the Working Parents Flexibility Act, the Child Rearing and Development Leave Empowerment (CRADLE) Act, and the Family and Medical Insurance Leave (FAMILY) Act.

Ways to Stay Compliant With Paid Family Leave Laws

Managing compliance with family leave laws ― at both the federal and state level ― can become difficult, especially for multistate employers. It's important that benefits administrators familiarize themselves with current FMLA regulations and applicable paid leave laws for each state in which they operate to avoid administrative fines or penalties for noncompliance from state and local agencies.

Benefits administrators will also need to ensure accurate record keeping. The information tracked should include the number of hours worked, the amount of accrued paid leave and the amount of leave taken for each employee in your organization.

Administrators should consult internal or external legal counsel and consider investing in technological solutions or Human Resource Outsourcing (HRO) to help ensure compliance with paid family leave laws. Payroll management software, for instance, can enable your business to track work time and attendance with ease. Specialized software can also make maintaining records more efficient by automating certain paid leave tasks and eliminating manual reporting. Overall, a technological solution can allow your business to streamline paid leave administration and produce records to prove compliance when needed.

As managing compliance and payroll administration becomes increasingly challenging, you may want to invest in an HRO. An HRO can help your business meet its obligations not only for federal regulations but also in states with paid family leave laws. An agile HRO will have the expertise needed to solidify workforce management and payroll administration and help ensure your employees are getting paid correctly.

For more insights on a variety of payroll and reporting issues at the state and local level, sign up to receive our Eye on Washington email alerts.

Author Bio

Sushma Tripathi, ADP Vice-President of Strategic Advisory Services, is responsible for workforce management consulting and thought leadership to support ADP® clients across all Human Capital Management services. She brings more than two decades of experience in leadership, operations and product management ― primarily in health and productivity management, employee benefits administration and wellness outsourcing.