June 6, 2023

Federal and State Updates

Federal Update

Department of Labor (DOL) – Wage & Hour Division (WHD)

The DOL has released an opinion letter (FMLA2023-2-A) that delves into the topic of calculating an employee’s leave entitlement under the Family and Medical Leave Act (FMLA) during weeks when a holiday occurs. To summarize, the WHD confirms that the employee’s normal workweek is the basis of the employee’s FMLA entitlement. If an employee on intermittent or reduced schedule leave works part of the week and uses FMLA for the other part of the week, a holiday would not count towards the employee’s leave entitlement unless the employee was required to work on the holiday. On the other hand, if the employee uses a full week (that includes a holiday) of FMLA, then the employee’s leave entitlement is reduced by a full week regardless of whether the employee was required to work on the holiday or not.

State Updates

Paid Family Leave Insurance Updates

We mentioned in this newsletter the ongoing trend of states passing laws that authorize insurers to provide paid family leave (PFL) insurance under a group disability or life insurance policy. Add Florida to the growing list. HB 721 was approved by Governor DeSantis at the end of May and is now in effect. Texas has sent a similar bill to Governor Abbott for approval (we’ll let you know if and when he signs the bill into law). As mentioned previously, we recommend reaching out to your insurance carrier if you would like more information. Also, please keep your Larkin Account Manager updated if you do add Paid Family Leave to your group insurance policy.

Colorado

Starting August 7, 2023, employees in the Centennial State will be allowed to use sick leave under the state’s Healthy Families & Workplaces Act for additional reasons:

  • When an employee needs time to grieve, attend funeral services or a memorial, or deal with financial and legal matters that arise after the death of a family member.
  • The employee needs to care for a family member whose place of care has been closed due to inclement weather, loss of power, loss of heating, loss of water, or other unexpected occurrence or event resulting in the closure of the family member’s school or place of care.
  • The employee needs to evacuate their residence due to inclement weather, loss of power, loss of heating, loss of water, or other unexpected occurrence or event resulting in the need to evacuate their residence.

The state will be updating the required poster and we will share once it’s available.

Minnesota

The North Star State has been quite busy lately. Before we get into the latest update, we want to clarify some information from our previous newsletter. We advised that the amendment to the state’s Parenting Leave Act has been amended and that the change was effective immediately. In actuality, the change (the law will apply to employers with only one employee) is effective July 1, 2023, the same as the other changes under the omnibus jobs bill that Governor Waltz signed into law on May 24, 2023.

Paid Family and Medical Leave (PFML)

We have yet another state PFML program on the horizon. The Midwest region of the country will have its first PFML program now that Governor Waltz has signed HF2 into law. HF2 provides for the creation of a “Family and Medical Benefit Insurance Program”. In a unique twist compared to other PFML programs, premiums for the program begin to be collected from employees on January 1, 2026 AND employees will be able to take PFML on January 1, 2026. Usually these programs start premium collection at least one year in advance to fund the program prior to benefits becoming available. The Department of Employment and Economic Development will be charged with creating a new Family and Medical Benefit Insurance Division to administer the program. More recently implemented state programs have outsourced administration to insurance carriers. Here are the high-level details of the program as it currently stands:

Program Funding

  • For an employer participating in both family and medical leave benefits programs, the premium will be 0.7%. The rate may increase in January 2027 but would not exceed 1.2%.
  • For an employer participating in only the medical benefit program and with an approved private plan for the family benefit program, the premium will be 0.4%.
  • For an employer participating in only the family benefit program and with an approved private plan for the medical program, the premium will be 0.3%.
  • Employers are on the hook for at least 50% of the premiums and employees must pay the remaining portion, if any, of premiums that are not covered by the employer.

Covered Employee and Employers

  • All employees are covered with the exception of seasonal employees, federal employees, self-employed individuals, and independent contractors.
  • “Covered Employment” means an employee’s entire employment during a calendar year if:
    • 50% or more of the employment is performed in Minnesota.
    • 50% or more of the employment is not performed in Minnesota or any other state, or Canada, but some of the employment is performed in Minnesota and the employee’s residence is in Minnesota (at least 50% of the time).
    • 50% or more of the employment is not performed in Minnesota or any other state, or Canada, but the place from where the employee’s employment is controlled and directed is based in Minnesota.
  • All employers are covered under the law with the exception of the United States of America and self-employed individuals (unless coverage is elected).

Leave Reasons

  • Caring for a family member with a serious health condition, or caring for a family member who is a military member.
    • Family member: a spouse or domestic partner, a child (biological, adopted, or foster child, a stepchild, or a child to whom the employee stands in loco parentis, is a legal guardian, or is a de facto parent), a parent (biological, adoptive, de facto, or foster parent, stepparent, or legal guardian of the employee or the employee’s spouse, or an individual who stood in loco parentis to the employee when the employee was a child) or legal guardian of the employee, a sibling, a grandchild (a child of the employee’s child), a grandparent (a parent of the employee’s parent) or spouse’s grandparent, a son-in-law or daughter-in-law, and an individual who has a relationship with the employee that creates an expectation and reliance that the employee care of the individual, whether or not the employee and the individual reside together.
  • Bonding with a biological, adopted, or foster child.
  • Safety leave from work because of domestic violence, sexual assault, or stalking of the employee or the employee’s family member.
  • Qualifying exigency – a need arising out of a military member’s active duty service or notice of an impending call or order to active duty in the United States armed forces.
  • An employee’s own serious health condition or medical care related to pregnancy.

Leave Entitlement

  • Employees are entitled to a maximum of 20 weeks in a single benefit year, however, they are capped at 12 weeks for any qualifying event. For example, an employee who takes 12 weeks to care for their ill parent would have 8 weeks of benefits if they need leave for their own serious health condition.

Amount of Benefits

  • The maximum weekly benefit amount will be the state’s average weekly wage (for reference, the average weekly wage in 2022 was $1,287).
  • The formula for calculating an employee’s benefit amount (based on an employee’s average typical work week and weekly wage during the high quarter of the base period is as follows:
    • 90% of wages that do not exceed 50% of the state’s average weekly wage, plus 66% of wages that exceed 50% of the state’s average weekly wage but not 100%, plus 55% of wages that exceed 100% of the state’s average weekly wage.

As you may have caught in the above, private plans will be allowed. Employees will have the right to reinstatement upon return from PFML, however, they have no greater right to reinstatement than if they had been continuously employed.

We will keep you informed of updates, changes, and all pertinent information as they develop this program over the next couple of years.

Oregon

It’s possible that we may see another delay with the Paid Leave Oregon program. If you recall, the program was delayed previously due to the COVID-19 pandemic (benefits were initially slated to begin January 1, 2023, but delayed to September 3, 2023). SB 31, effective May 8, 2023, gives the Director of the Employment Department until August 11, 2023 to determine if the Paid Leave Oregon fund is solvent and will be able to pay benefits starting September 3, 2023. If the fund is insolvent, the program will be delayed until December 3, 2023. We’ll keep you posted.

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