Varied State Laws Confound Uniform Leave Policies, Report Says

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By Christine Pulfrey

Multistate employers that try to provide employees with paid leave, despite varying state and local paid-leave requirements, should receive a federal safe harbor to protect them if they fail to comply with a particular jurisdiction’s requirements, a recent report said.

Large employers are leading the way in offering employees with generous paid-leave benefits, including sick leave, vacation time, holiday leave and personal leave, but they are increasingly challenged by a “patchwork quilt of varying administrative requirements under state and local mandates,” said the Making the Workplace Work report that was released April 25 by the HR Policy Association, which represents the chief human resource officers of 380 major U.S. companies.

Uniform Policies, Different Laws

Eighty percent of employees working for large employers have access to paid sick leave, compared with 52 percent of employees working for small employers, the report said. Ninety percent of employees working for large employers have access to paid vacations, compared with 68 percent of those working for small employers, it said.

Most large employers operate in multiple states, but state legislatures focused on guaranteeing certain paid sick leave or paid family leave amounts, and state and local laws that try to control how employers provide such benefits is resulting in requirements that are varied and conflicting, which poses a challenge to multistate employers attempting to provide uniform benefits to employees, it said.

The differences between the paid family and sick leave laws in several states makes it more difficult for these multistate employers to comply with each facet of the state laws and still provide a desired service to employees residing in states without paid leave requirements, the report said.

Often, drastic differences exist in state and local laws that require paid family leave with regard to amount of guaranteed wages, the minimum and maximum leave length and the legal definition of family member, particularly the definition of child, the report said.

Likewise, many state and local paid sick leave laws differ with regard to which family members are covered, when paid leave vests and when employees can begin to accrue paid leave, the report said.

Such regulatory conflicts result in administrative hardships for employers, many of which are already trying to provide paid sick leave and paid family leave to its employees, regardless of their state of residence, it said.

To help ensure that multistate employers are not hampered from providing paid sick leave and paid family leave to workers by the varied state and local leave mandate requirements, Congress should enact a federal standard to protect such employers, the report said. Employers would not have to meet the standard, “but having paid leave policies that are consistent with that standard would shield a company operating in multiple states from prosecution under a particular state or local law for failure to provide the leave in the same manner dictated by that jurisdiction,” the report said.

Other Benefits Initiatives

Several states provide for a limited number of hours each year for parents to attend school-related events and activities for their children: California, Illinois, Louisiana, Massachusetts, Minnesota, North Carolina, Rhode Island and Vermont, as well as the District of Columbia, the National Conference of State Legislatures said. Nevada makes it unlawful to terminate an employee for using leave to attend a child’s school-related activities, it said.

Among the report's other recommendations regarding what policies could be implemented to make the workplace work, legal definitions of employment relationships could include safe harbors for employer actions and policies that benefit employees and other workers and employee benefits could be made more portable and not tied to tenure with a single employer.

A tax-preferred system similar to Section 401(k) plans could be implemented to help employees save and pay off student loan debt sooner and a tax exemption for employer-sponsored health insurance could be protected because the employer deduction of employer-sponsored health insurance and the employees’ ability to deduct their premiums on a pretax basis lowers the after-tax cost of many workers' health insurance.

To contact the editor responsible for this story: Michael Trimarchi at mtrimarchi@bna.com.

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