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Overview of Proposed Paid Leave Program Under the Build Back Better Act

On November 19, 2021, the U.S. House of Representatives passed the Build Back Better Act (BBBA or the Act), [1] which, if enacted, would be the first federal enhancement of family and medical leave for private sector workers since the enactment of the Family and Medical Leave Act (FMLA) in 1993. While the BBBA does not go as far as initially proposed (12 weeks of paid leave), it would expand upon the FMLA’s current unpaid protections by providing up to four weeks of paid caregiving leave. Further, the BBBA would allow paid leave benefits for a broader group of eligible workers and for additional qualifying family members beyond those covered by the FMLA. If enacted, the paid family leave program would become effective January 2024.

The Act would provide paid leave to nearly all U.S. workers, including self-employed individuals, through an amendment to the Social Security Act. Unlike the FMLA, the BBBA’s paid leave benefits do not require a specific length of service, and are not limited to larger employers. However, workers would have to meet a minimum threshold of earned wages ($2,000 starting in 2024) for a quarterly period ending at least four months prior to using paid leave benefits. To use such benefits, workers must complete an application, which would be good for 90 days, and will also provide a lookback period of 90 days, for qualifying leaves of at least 4 hours weekly.

Eligible workers could receive paid leave benefits for the following reasons:

  • because of the birth of a child and in order to care for such child;
  • because of the placement of a child with the employee for adoption or foster care;
  • for the individual’s own serious health condition (using the same definition as the FMLA); or
  • to care for a qualified family member with a serious health condition (the definition of “qualified family member” under the Act is broader than the FMLA definition, and includes spouses (including domestic partners), children, siblings, grandparents and grandchildren, any spouse of the aforementioned, or “any other individual who is related by blood or affinity and whose association with the individual involved is equivalent of a family relationship.”)

The Act would pay out a benefit rate of: (1) 90.138% pay for those earning less than $290 per week; (2) 73.171% for those earning less than $658.62 per week; or (3) 53.023% for those earning less than $1,192.31 per week.

Notably, paid leave provided under the Act would not preempt applicable state and local paid leave laws, but employees would be eligible for the state and local paid leave benefits in lieu of the paid benefits under the BBBA, to the extent they exceed the benefits under the BBBA. Similarly, employees eligible for comprehensive paid leave benefits programs provided by their employer (either through an insurer, multiemployer plan, or self-insured plan) would not be eligible for benefits under the Act, to the extent they exceed the benefits under the BBBA. Employers with such comprehensive paid leave plans would be eligible for a partial reimbursement of premiums.

Although the BBBA appears to face an uphill battle in the Senate, employers should review any applicable policies that may be affected by the Act, and continue to monitor the Act’s progress.

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*Kamil Gajda, a Law Clerk – Admission Pending (not admitted to the practice of law) in the firm’s New York office, contributed to the preparation of this post.

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[1] For more information on the Act, and in particular its implications for the health-care industry, see our Insight available here.