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Paid Leave Plan Would Aid Low-Income Workers, Limit High Earners

Nov. 4, 2021, 12:05 AM

House Democrats’ pared-back paid family and medical leave benefits would provide more wage replacement for workers in the lowest income brackets than an earlier proposal.

It would also create the new entitlement program within the Social Security Administration, though opposition from key lawmakers leaves its fate to be determined.

A worker whose employer doesn’t provide paid medical or family leave would be eligible to receive as many as four weeks of wage replacement for time off during a one-year benefit period.

The proposed program would replace 90% of wages for workers making up to $15,000 a year, up from 85% in a September proposal. That’s a key change as lawmakers trim the tax and social spending package’s overall cost.

It would also cut off wage replacement for those earning more than $1,192 a week, or $62,000 a year. People with higher incomes can submit requests for paid leave, but their earnings are replaced up only up that level. An earlier proposal would have replaced a small percentage of income up to $250,000 a year.

The curtailed proposal was resuscitated in the $1.75 trillion tax and social spending package after being cut from the framework that President Joe Biden unveiled last week. It still faces opposition from moderate Sen. Joe Manchin (D-W.Va.), who said earlier today that he’s discussing paid leave with GOP lawmakers.

The previous proposal would have called for the Treasury Department to run the program, while this iteration calls on the Social Security Administration, after Republican lawmakers raised doubts about the Treasury’s ability to oversee the program.

The curtailed proposal gained new life in the $1.75 trillion tax and social spending package after being cut from the framework that President Joe Biden unveiled last week. It still faces opposition from moderate Sen. Joe Manchin (D-W.Va.), who said earlier today that he was discussing paid leave with GOP lawmakers.

Families, parents, and caregivers, during a Nov. 2, 2021 vigil at the U.S. Capitol, call on Congress to include paid family and medical leave in spending legislation.
Paul Morigi/Getty Images for PL+US

At least two Republican senators, Shelley Moore Capito (W.Va.) and Susan Collins (Maine), received phone calls on their private lines from Meghan Markle urging them to support paid leave, Politico reported.

Markle, duchess of Sussex and wife of Queen Elizabeth’s grandson Prince Harry, got the phone numbers from Sen. Kirsten Gillibrand (D-N.Y.), who’s been promoting paid leave, Politico said.

Gig Workers

The new proposal would still be widely available to most U.S. workers, including part-time employees and gig workers, while expanding current leave options available under the Family and Medical Leave Act. This would broaden who qualifies as a family member from the current definition under the unpaid FMLA.

Although providing less benefit to middle-class and higher-income workers, the proposal follows the theme of Democrats’ earlier proposals to focus the bulk of benefits on lower-income workers who are less likely to get paid leave directly from their employers.

“All along, the proposal has had a cap, if you will, on the amount of benefits that anybody’s going to get,” said Sherry Leiwant, cofounder of the progressive advocacy group A Better Balance. “A higher percent of wage replacement will go to lower-income workers, and that’s the way it should be,” because the bulk of their income is necessary for basic living expenses.

The latest plan also keeps language from an earlier proposal that would provide federal funding to cover state-run and employer-sponsored paid family and medical leave, including employer plans contracted out to insurers or third-party administrators. The plans must be at least as generous as the federal program to qualify, and the funding is available only to the nine states and the District of Columbia that have already enacted their own programs, if they choose to continue operating them.

To contact the reporters on this story: Paige Smith in Washington at psmith@bloomberglaw.com; Chris Marr in Atlanta at cmarr@bloomberglaw.com

To contact the editors responsible for this story: Martha Mueller Neff at mmuellerneff@bloomberglaw.com; Robin Meszoly at rmeszoly@bgov.com

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