Bipartisan Momentum on Paid Family Leave Policy in the 118th Congress

Photo Credits to Imagine Photography

The bicameral, bipartisan Working Groups are collecting extensive stakeholder input as the next phase of their working process. Last year the House Working Group hosted six stakeholder meetings, welcoming a wide range of insights from paid leave advocates, state administrators, trade associations, and small businesses. Additionally, the announcement of the Senate Working group in December was paired with a formal Request for Information to gather further input to inform the groups’ efforts.^[1]

The House working group released its policy framework in early 2024 and is now working to turn those ideas into legislation.^[2]  The framework includes a host of policy ideas ranging from utilizing private insurance to harmonizing paid leave programs across states.

House Working Group’s Legislative Framework

1. Public-Private Partnership Paid Leave Pilot: Funding to states who want to set up a new paid leave program.
2. Coordination and Harmonization of Paid Leave Benefits Across States: Creation of an “Interstate Paid Leave Action Network (I-PLAN)” to help states with existing programs share best practices with one another.
3. Small Employer Pooling for Paid Leave Insurance: Create a system where small businesses can join group paid family leave insurance plans, making coverage more affordable.
4. Improvements to 45S – Paid Leave Tax Credits for Small Businesses and Working Families: Implement reforms to the 45S Employer Tax Credit making it permanent and more beneficial for small businesses.

^{* The President’s Budget Request for Fiscal Year 2025 echoes the first two pillars of the House Working Group’s framework.  The U.S. Department of Labor is tasked with establishing a program, facilitated by the Women’s Bureau, aimed at helping states broaden access to paid leave via state programs. Also, it proposes creating a ‘Technical Assistance Hub’ to encourage the sharing of best practices among states.}

Strengthening the 45S Employer Credit for Paid Family and Medical Leave

The 45S Employer Credit for Paid Family and Medical Leave (45S tax credit) assists businesses in covering the costs of providing paid leave to employees. Lawmakers initially enacted this tax credit as a two-year pilot in the Tax Cuts and Jobs Act of 2017 and then extended it through 2025.

Unfortunately, since its inception, employer uptake has been low. To increase take up and expand access to paid family leave, Sens. Deb Fischer (R-NE) and Angus King (I-ME) recently introduced legislation that would enhance the credit. If passed, their bill would make the tax credit permanent, allow employers to apply the tax credit toward the cost of providing paid family leave through private insurance, and direct the Internal Revenue Service and Small Business Administration to conduct education and outreach to employers and relevant entities to increase awareness of the tax credit.

Paid Parental Leave for Military Families

A bipartisan group of lawmakers also expanded paid parental leave to military families in 2023. The National Defense Authorization Act for 2024 included two key provisions broadening eligibility for more military families:  fathers and adoptive parents serving in the reserves and National Guard are eligible for federal employee paid parental leave and veterans in civil service roles can count their military service towards the 12-month eligibility requirement to receive paid parental leave under the Federal Employee Paid Leave Act.^[3]

Building on Past Victories and Moving Forward

The legislative achievements over the past year are promising. However, as emphasized by Sens. Gillibrand and Cassidy and Reps. Houlahan and Bice at our recent reception, there is more work to be done. Ongoing collaboration remains essential to drive paid family leave legislation forward in the closing months of the 118th Congress. BPC looks forward to supporting these bipartisan, bicameral efforts to ensure no worker is faced with the dilemma of choosing between financial stability and family.

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[1] BPC’s response to the Request for Information can be found here – https://bipartisanpolicy.org/letter/bpc-response-to-senate-house-bipartisan-request-for-information-on-paid-family-leave/

[2] See BPC’s comments on the House Bipartisan Paid Family Leave Working Group’s framework – https://bpcaction.org/bpc-action-applauds-bipartisan-paid-family-leave-policy-framework/.

[3] Provisions can be found in Sections 601 and 1114