Paid Family, Medical Leave Set for State Law Expansion in 2023

State paid family and medical leave laws are poised for expansion in 2023 as two programs go live, advocates push for policies in more state legislatures, and opt-in paid leave laws get traction among conservative lawmakers.

Michigan and Minnesota, in particular, will be states to watch on paid leave proposals, once Democrats take control of their legislatures starting in January. Minnesota Gov. Tim Walz (D) has indicated that enacting a state-run paid leave entitlement is a high priority, likely offering 12 weeks or more of paid time off annually for workers to care for a new child, tend to a sick family member or complications related to a family member’s military duty, or take care of their own serious health problem.

State legislatures remain at the center of the action on paid family leave laws, after Democrats’ efforts to enact a federal paid leave proposal in 2021 and 2022 fell short. The Covid-19 pandemic helped highlight the importance of workers having paid time off, and supporters maintain hope for passing a federal program, potentially springing from a recently unveiled bipartisan House paid leave caucus in Congress.

“There’s definitely a possibility of passing strong paid family and medical leave programs” in Michigan and Minnesota, said Sherry Leiwant, co-founder and co-president of the advocacy group A Better Balance, who also pointed to momentum for enacting new programs in Maine and New Mexico. “There has been a lot of discussion about the importance of paid leave over the last year or two. I think you’re going to see that translate into legislation.”

Mandatory vs. Voluntary

Still, Democrats and Republicans remain largely at odds over the best policy approach to promoting paid leave—whether to choose a mandatory program available to most workers or a voluntary insurance-driven model that encourages but doesn’t require employers to participate. The disagreement shows clearly in the varying state programs.

Eleven states plus the District of Columbia, all with Democratic-majority legislatures, have enacted state-run, mandatory paid family and medical leave programs that cover most private-sector workers with funding from payroll deductions. In contrast, conservative-leaning lawmakers have advanced voluntary models over the past year, such as those in New Hampshire, Vermont, and Virginia.

The US is an outlier among the world’s wealthy nations, most of which guarantee some amount of paid time off for medical needs, the birth of a new child, or both. With no federal mandate, only 24% of private-sector workers in the US have access to paid family leave to care for a new child or sick family member, according to Bureau of Labor Statistics data from March 2022. About 43% have access to short-term disability insurance to cover workers’ own medical needs.

Worker advocates contend that a government mandate is the best path to guaranteeing low-wage workers have access to paid leave, since the employers they tend to work for are least likely to offer it to them voluntarily. Within those BLS figures, 6% of the bottom quarter of wage-earners have paid family leave access, while 40% of the top quarter have it.

One recent study by the think tank New America tied together the health risks for rural workers who live far away from medical facilities and a lack of access to paid time off for medical needs.

But business and industry groups say many employers, particularly small businesses, can’t handle the financial and operational strain of a comprehensive, mandatory paid leave program. A company with three employees, for example, would struggle to function if one employee is off for 12 weeks and the business isn’t allowed to hire a permanent replacement, said Amanda Fisher, the Michigan state director for the National Federation of Independent Business.

The NFIB consistently opposes mandatory paid leave proposals and will do the same in Michigan next year, she said.

“If there was an infinite amount of money, of course, let’s take care of everybody,” Fisher said. “But that’s just not the reality.”

Jan. 1 Start Dates

Paid leave programs already enacted in Colorado and Oregon will take effect in the year ahead, with mandatory payroll deductions starting Jan. 1 in each state. Benefits become available Sept. 3, 2023, in Oregon and then on Jan. 1, 2024, in Colorado.

The latest states to enact mandatory paid leave programs, Maryland and Delaware, won’t begin offering benefits before 2025 and 2026, respectively. In the meantime, state agencies are working behind the scenes to set up the programs, such as calculating how much the payroll deductions will be.

Jan. 1 is also the beginning of New Hampshire’s paid family and medical leave program, which the state contracted with MetLife to administer. The state is funding benefits for its own employees and giving private-sector employers and workers the option to buy into that same coverage.

Vermont will launch a similar state government paid leave plan in 2023, with an option for private-sector businesses and employees to join. The state contracted with The Hartford to run the program.

More State Momentum

Beyond Michigan and Minnesota, a number of states have momentum for potentially enacting paid leave programs in 2023.

In Maine, a study commission set up by the state legislature reviewed its final recommendations in December for the details of a mandatory paid family and medical leave program, after more than a year of meetings and research.

Those details are similar to a separate proposed ballot question for which the Maine Paid Leave Coalition is gathering signatures—an effort that paid leave proponents see as a back-up plan in case the state legislature doesn’t enact paid leave in 2023.

A similar study committee in New Mexico published its recommendations in October for a state-run paid leave program designed to cover most workers.

South Dakota, meanwhile, could join the GOP-led states offering up conservative approaches to encouraging paid leave access.

Gov. Kristi Noem (R) proposed in a Dec. 6 budget address expanding the state’s paid family leave program for government employees to cover 100% of weekly wages for new parents taking leave. At the same time, she proposed $20 million of state-funded incentives over four years to reward private-sector employers that adopt their own paid family leave benefits.

“Too often, new parents have to leave the workforce when a new child joins the family,” Noem said in announcing the proposals. “Those early days are so crucial to give moms and dads the opportunity to bond with the new child. By extending paid family leave opportunities, we can help workers and families.”