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Paid Family Leave: The Basics

The Brief

Paid family leave is a “kitchen table” issue for millions of American families. Increasingly, it is also an issue on which Democrats and Republicans alike believe meaningful progress is possible. This fact sheet is part of a series of explainers BPC has developed to help inform the debate.

Last updated on July 25, 2023

What is Paid Family Leave?

Paid family leave is compensated time away from work for specific caregiving needs. While existing policies vary, there are generally three qualifying reasons for paid family leave:

  • Parental LeaveTime to bond with a newborn, newly adopted, or newly fostered child. This includes paternity and maternity leave.
  • Family Caregiver LeaveTime to care for a qualifying family member with an illness or injury.
  • Medical LeaveTime to recover from a personal health issue that makes the employee unable to work for a short period of time.

What Paid Family Leave Laws Exist Across the U.S.?

The United States does not guarantee that workers receive paid family and medical leave. However, federal law does provide over half of workers unpaid, job-protected leave. Additionally, a business tax credit offsets the employer’s cost of providing paid family and medical leave benefits. Furthermore, certain federal employees that have completed a minimum of 12 months of service are eligible to receive 12 weeks of paid parental leave. Lastly, several states have implemented their own paid family and medical leave laws.

Federal Laws

Family and Medical Leave Act (1993)

The Family and Medical Leave Act (FMLA) provides many workers with the right to take 12 weeks of unpaid, job-protected leave each year. Although FMLA does not guarantee paid benefits, it does provide workers with the peace of mind that they can be away from work for up to 12 weeks and return to their job (or an equivalent job at the same compensation level).

Under the FMLA, covered employers must provide eligible employees unpaid leave for parental, family caregiving, or personal medical leave. However, FMLA only guarantees job-protected leave for workers who meet a certain set of eligibility requirements. To qualify for FMLA, a worker must:

  • Have worked for their employer for at least one year;
  • Have worked at least 1,250 hours for their employer in the past year; and
  • Work for an employer that has at least 50 employees within a 75-mile radius.

As a result of these eligibility requirements, FMLA covers only 56% of employees. Lawmakers have modified FMLA only a few times since its enactment in 1993. A recent Bipartisan Policy Center report outlines ways to modernize FMLA so that it better meets the needs of today’s businesses and workers.

45S Employer Credit for Paid Family and Medical Leave (2017)

The 45S Employer Credit for Paid Family and Medical Leave is available for businesses of all sizes that provide their employees with paid parental, family caregiving, and/or personal medical leave. To qualify, employers must provide at least two weeks of paid leave that compensates their employees with at least 50% of their regular earnings. The size of the tax credit depends on the generosity of the paid leave benefits, ranging from 12.5% of the cost of paid leave that replaces 50% of earnings to 25% of the cost of paid leave benefits replacing 100% of earnings. The credit is only available for leave taken by workers who have been employed for at least one year and who make less than $81,000 annually.

Originally proposed by U.S. Senators Deb Fischer (R-NE) and Angus King (I-ME) and Representatives Mike Kelly (R-PA) and Terri Sewell (D-AL) as the Strong Families Act, this bipartisan tax credit was enacted as a two-year pilot in the Tax Cuts and Jobs Act of 2017 (TCJA) and is currently authorized through 2025.

Federal Employee Paid Leave Act (2019)

The Federal Employee Paid Leave Act (FEPLA) became law in December 2019 as part of the National Defense Authorization Act for Fiscal Year 2020. FEPLA amends the Family and Medical Leave Act to allow eligible federal employees to take 12 weeks of paid parental leave (not family caregiving or personal medical leave). Paid parental leave may only be taken during the 12-month period following the birth, adoption, or placement (for foster care) of an employee’s child.

To be eligible for paid parental leave under FEPLA, the employee must have completed at least 12 months of service as an employee of the Government of the United States (12 months of covered government service, no tenure requirement for specific employer), be a full-time or part-time employee, and have an appointment to continue work for at least one year.

State Laws

Eighteen states and the District of Columbia have enacted paid family and medical leave laws. Arkansas, California, Connecticut, the District of Columbia, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, Vermont, Virginia, and Washington have laws that are currently in effect. Colorado, Delaware, Maine, Maryland, Minnesota, Oregon, and Texas enacted laws that have not yet been implemented. Most of these state laws provide parental and family caregiving leave as well as temporary disability insurance to provide paid personal medical leave. Many also use a social insurance policy design that pays for benefits by creating a pooled fund through payroll taxes on employees, employers, or both (see BPC’s fact sheet on State Paid Family Leave Laws Across the U.S.).

However, some states are exploring the role of private insurance. Specifically, Arkansas, New York, New Hampshire, Vermont, Virginia and Texas have enacted laws that provide paid family and medical leave through private insurance on a mandatory (New York) or voluntary (Arkansas, New Hampshire, Texas, Vermont, and Virginia) basis. Under a private insurance system, companies and/or workers’ pay premiums to private insurers that pay out benefits for paid parental, family caregiving, and/or personal medical leave.

Who Has Access to Paid Family Leave?

Outside of the states with paid family leave programs, paid family leave is not widely available in the U.S. As of 2022, 75% of American workers lacked access to an employer-provided paid parental or family caregiving leave benefit, and 59% lacked access to personal medical leave. Moreover, these benefits are not distributed equally. Employees working for companies with more than 500 workers were twice as likely to receive paid family leave benefits as those working for companies with fewer than 50 workers, while the top 10% of wage earners were nearly six times more likely to have paid family leave than the lowest 10% of wage earners.[1]

Read Next

Access to Paid Family Leave by Wage Quartiles, March 20222

Lowest 25 percent Second 25 percent Third 25 percent Highest 25 percent
Paid parental and family caregiver leave 13 % 24 % 27 % 38 %
Paid medical leave 22 % 40 % 49 % 57 %

Access to Paid Leave by Number of Employees, March 20223

1 to 49 workers 50 to 99 workers 100 to 499 workers 500 workers or more
Paid parental and family caregiver leave 18 % 22 % 29 % 33 %
Paid medical leave 28 % 37 % 50 % 54 %

How Are Other Types of Paid Leave Benefits Used When Paid Family Leave Is Not Available?

Without access to a defined paid leave benefit, workers often use other benefits—or combinations of benefits—to receive compensation while on parental, family caregiving, or medical leave. In 2018, about 66% of workers who took FMLA cobbled together other forms of leave to cover caregiving needs. Of those who received pay, 70% used sick leave, 60% used vacation days, 8% used a state paid family leave benefit, and 30% used temporary disability insurance. Additionally, while low wage workers took leave for family and medical reasons at similar rates to middle- and high-wage workers (18% vs. 14%), low-wage workers were least likely to receive any pay (39%) compared to their middle- and high-wage counterparts (80%).4

How Does Paid Family Leave Differ from Other Types of Leave?

Paid family leave is designed to support extended periods away from work when the employee intends to return to the workplace. Paid family leave is not paid vacation or sick leave. As we have noted, however, many workers without access to paid family leave turn to vacation, sick leave, or other forms of paid time off when caregiving or medical needs arise.

Many workers also have access to unpaid, job protected leave under the FMLA and state leave laws. (See The Family and Medical Leave Act (FMLA): The Basics and State FMLA and Job-Protection Leave Laws Across the U.S.)


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