Growing Patchwork of State and Local Paid Leave Laws Overburdens Large Employers that Offer Paid Leave

Washington, DC – With millions of Americans worried about how they will afford taking leave from their jobs if they or a loved one contracts COVID-19, a new paper by The ERISA Industry Committee (ERIC) examines how an ever-expanding patchwork of state and local mandates is threatening paid leave programs of large, multistate employers.

Paying the Way: Large Employers and the State Paid Leave Patchwork highlights the valuable paid leave benefits offered by large, multistate employers and their success in designing and delivering these critical benefits to millions of employees and their families across the country.

Large employers’ paid leave plans often exceed the national private-sector averages and frequently equal or surpass the leave provided by state-mandated paid leave programs.

“For large employers, like ERIC member companies, paid leave is essential to ensuring a healthy, happy workplace,” said Aliya Robinson, Senior Vice President of Retirement and Compensation. “Employers understand that paid leave benefits give critical financial security and flexibility to today’s workforce, the ability to better balance work and family life, and ultimately improve productivity within their work environments.”

Large employers provide these generous paid leave benefits to their nationwide workforce voluntarily and paid for with employer funds. However, an ever-increasing patchwork of state and local paid leave mandates is threatening these programs due to the operational cost and challenges necessary for compliance. There are currently seven separate state paid family and medical leave insurance programs in operation across the country with two others in regulatory development and more than 20 additional states considering such programs.

Large, multistate employers want to offer employee benefit parity – equitable, generous benefits to all of their employees regardless of where they live or work. In addition to employee recruitment, retention, and increased productivity, a significant reason for this desire stems from the value of employee transferability between different locations when an opportunity for promotion or transfer becomes available, or when an employee wants to relocate due to personal reasons.

With more employees working remotely and regular changes in location becoming more prevalent in a modern workforce, benefit parity will become an increasing issue. Because the current patchwork of state paid family and medical leave programs results in benefit structures that vary widely by jurisdiction, employers that wish to maintain parity of benefits between employees in different states have to perform a balancing act to establish that:

  • Employees in one state are not receiving inferior benefits compared to their counterparts in another state because of differences in state program standards

  • Employees are not dissuaded from accepting an otherwise desirable relocation offer because they are wary of the difference in available employee benefits

“Large employers want to offer generous paid leave benefits, but they want them to be equal for all their employees. With location-specific differences, employers must constantly review, re-design, and re-program their nationwide programs to ensure that benefit parity remains. This constant re-adjustment uses resources – time and money – without providing any greater benefits to the employee,” said Robinson.

In Paying the Way, ERIC calls on Congress to ensure that any federal paid leave laws do not add another layer to the already difficult maze of state and local paid leave laws and mandates. ERIC asks lawmakers to consider a national exemption or safe harbor that provides relief for employers that already voluntarily offer paid leave benefits to their employees.

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All media inquiries to The ERISA Industry Committee should be directed to:

Kelly Broadway, 202.627.1918, kbroadway@eric.org

About the ERISA Industry Committee
ERIC is a national advocacy organization that exclusively represents large employers that provide health, retirement, paid leave, and other benefits to their nationwide workforces. With member companies that are leaders in every sector of the economy, ERIC advocates on the federal, state, and local levels for policies that promote flexibility and uniformity in the administration of their employee benefit plans.