Explainer: Family And Medical Insurance Leave (FAMILY) Act of 2023

Longtime paid leave champions Senator Kirsten Gillibrand (D-N.Y.) and Representative Rosa DeLauro (D-Conn.) plan to introduce a new version of their Family And Medical Insurance Leave (FAMILY) Act, improving on the national paid family and medical leave proposal they have sponsored and fought for since 2013.

This explainer summarizes seven key provisions in the newly-improved FAMILY Act. It highlights changes in these provisions from prior versions of the bill and explains the likely effects of the changes on workers’ enhanced ability to use the program.

If enacted, the newly-improved FAMILY Act would guarantee the vast majority of working people in the United States the ability to use up to 12 weeks of paid family and medical leave to care for a new child or a loved one with a serious health condition, or to address their own serious health condition. Leave would also be available for military families facing circumstances arising from a service member’s deployment and for survivors of domestic violence, stalking, and sexual assault to seek services related to the violence. The family members for whom a worker would be able to provide care include immediate family members and extended blood-related and chosen family. Workers would receive benefit payments on a sliding scale, so that lower-wage workers would receive up to 85 percent of their usual wages with workers at the country’s median wage receiving about 70 percent of their usual pay. Workers’ jobs would be protected, regardless of the size of the employer they work for or their tenure or hours at their job, allowing them to return to work without facing job loss or retaliation related to their leave.

Why A National Paid Family and Medical Leave Program?

A public program like the FAMILY Act is necessary because, left alone, the private and public sectors have failed to guarantee paid time away from work that new parents, family caregivers, and all workers need. Just 25 percent of civilian workers in the United States have dedicated paid family leave at their jobs, and only four in ten have short-term disability insurance that replaces a share of wages for a workers’ own serious illness or injury. Lower-wage workers are far less likely to have access to paid leave than higher wage workers — but even half of highly-paid professional workers do not have dedicated paid family leave.

A well-designed national paid leave program would have important benefits for women’s labor force participation and earnings; maternal and child health; gender equity in homes; health outcomes for people with serious health issues and their caregivers; public health and benefit programs’ cost savings; businesses would see improvements in worker retention; and the economy would grow. Guaranteeing access to paid leave is also a racial and economic justice issue.

In an era where reproductive freedom has been curtailed, national paid family and medical leave would provide a backstop for people who may now have no choice but to have a child, as none of the states that have banned or imposed significant barriers to abortion care guarantee paid leave to new parents or any one else working in their states.

Key Provisions of FAMILY Act 2.0

The provisions of the newly-improved FAMILY Act are built on research-backed lessons from state paid leave programs and policies in other countries. When the FAMILY Act was first introduced in 2013, just two U.S. states (California and New Jersey) had paid family and medical leave programs in full operation (each added paid family leave to decades-old temporary disability insurance programs), and a third (Rhode Island) had passed but not yet implemented paid family leave as an add-on to its longstanding temporary disability insurance program for personal medical issues. Today, 11 states plus the District of Columbia have adopted paid family and medical leave plans, eight of which are available to workers now and four of which are in the implementation phase. One additional state — Minnesota — will join the list of paid leave states within days of this writing in spring 2023.

The original FAMILY Act included, and in some cases exceeded, the most generous elements of the California and New Jersey programs as they existed in 2013; California and New Jersey’s programs have been expanded in numerous ways since then. State programs enacted in the last several years have generally improved on older programs to provide more robust wage replacement, acknowledge a wider range of family caregiving relationships, establish job protections, and include other key elements that make paid leave affordable, accessible, equitable, and secure to use. The newly-improved FAMILY Act incorporates these elements.

Many of the main improvements in the FAMILY Act were also included in the national paid family and medical leave proposal that passed the U.S. House of Representatives in November 2021 as part of the Build Back Better Act. For a detailed discussion of changes to federal paid leave policy proposals from the FAMILY Act’s inception through Build Back Better and outstanding questions about policy design and implementation, see the Urban Institute/New America brief, Evolution of Paid Family and Medical Leave Policy.

The following are seven key features in the new version of the FAMILY Act:

(1) Eligibility: The vast majority of workers, including younger workers and workers with less work attachment and lower earnings histories, will be covered.

New: The newly-improved FAMILY Act makes paid leave available to more workers. People who have earnings from work or self-employment, or have been looking for work and received unemployment benefits, in the months leading up to the need for a paid family and medical leave, and who have earned at least $2,000 in wages or self-employment income in roughly two years leading up to the need for leave, are eligible. Employees of all state and local governments are also eligible.

Original: The prior version of the legislation had a higher earnings threshold and required more sustained work history because it used the same formula as Social Security Disability Insurance. The prior version also did not cover public sector workers in 13 states where public sector workers are covered by state and local pensions and excluded from Social Security disability and retirement programs.

Impact: The newly-improved FAMILY Act will extend eligibility for paid leave benefits to younger workers, part-time workers, and people with intermittent work histories, including those with caregiving interruptions and education breaks. Using a relatively low $2,000 recent earnings threshold means greater inclusion of lower-wage workers and workers with employment interruptions who have recently been working. Particularly after three years of a pandemic in which record numbers of people — and especially women and service and hospitality workers lost jobs or cycled in and out of work — creating a more flexible approach to eligibility acknowledges people’s lived needs.

(2) Duration: Twelve weeks, beginning with the first day of the need for leave.

New: The FAMILY Act’s duration of leave — 60 caregiving days, which is equivalent to 12 work weeks of leave — is unchanged from the original bill, although leave in the new version of the proposal, paid leave is now available from the first day of a worker’s need for leave, rather than after the exhaustion of a waiting period. Most state paid leave programs do not include waiting periods, including older programs that eliminated waiting periods. The 12 weeks of leave under the FAMILY Act reflects the United States’ 30 years of experience with the Family and Medical Leave Act of 1993 (FMLA) (the nation’s unpaid leave law), and falls into a reasonable mid-range of the number of weeks that state programs provide.

Original: The original legislation included a five-day waiting period for workers whose leaves lasted less than 15 days in the first month in which benefits were used.

Impact: The waiting period in the original legislation could have inadvertently excluded or dissuaded people from taking the leave that they needed due to their inability to take, or hardship involved in taking, five work days of unpaid leave. Low-wage workers are much less likely than other workers to have paid sick days or other sources of paid time off to use from their jobs to cover unpaid days away from work for family and medical needs. The waiting period can also cause administrative complexity for workers, employers and the administering agency.

(3) Reasons: All FMLA personal and family caregiving needs are covered, as is “safe leave” for people dealing with domestic violence, stalking, or sexual assault.

New: The newly-improved FAMILY Act — like both the original and the FMLA — provides workers with leave to: care for a new child through birth, adoption, or foster placement; care for a loved one with a serious health condition; care for a workers’ own serious health condition when the condition makes the worker unable to perform their usual work; and address circumstances related to a spouse, child’s, or parent’s military deployment. The newly-improved FAMILY Act also includes leave for medical, legal, or other services related to their own or a loved ones’ domestic violence, sexual assault, or stalking.

Several state paid leave programs (Colorado, Connecticut, New Jersey and Oregon, as well as the soon-to-be-enacted Minnesota law) include safe leave provisions like those now incorporated into the FAMILY Act.

Original: The original FAMILY Act only included FMLA reasons, which do not include safe leave.

Impact: The safe leave provisions will help people in abusive or violent situations to seek help or change their circumstances. According to research compiled by Futures Without Violence and the National Partnership for Women & Families, people often stay in unsafe situations because they lack financial security or are unable to miss work. Women, Native people, people with disabilities, and LGBTQIA people are more likely to experience violence and are less likely to have paid leave at their jobs.

(4) Family Caregiving Relationships: Family caregiving leave is available to workers to care for a wide range of loved ones.

New: The newly-improved FAMILY Act recognizes a range of family caregiving relationships. Workers’ whose loved ones have a serious health condition — defined as it is in the FMLA as inpatient treatment or continuing outpatient treatment by a health provider for an illness, injury, impairment, or a physical or mental condition — may provide care to: a child of any age; a spouse, (including a registered domestic partner); a parent or step-parent; a sibling or a sibling’s spouse; a grandparent, grandchild or a step-grandparent or step-grandchild; and “any other individual who is related by blood or affinity whose association is the equivalent of a family relationship.” Four states, and the soon-to-be-enacted program in Minnesota, currently include this scope of family relationships, and all state programs except one include some types of extended family caregiving relationships.

Original: The original FAMILY Act only included FMLA-covered family members, which are parents, spouses (with the original FAMILY Act also covering domestic partners), and children under 18 or adult children incapable of self-care.

Impact: Most people use paid leave to care for immediate family, but about one-sixth of workers who needed family or medical leave in 2018 said they did not take it because the family member for whom they needed to provide care was not covered by FMLA family caregiving definitions. Data compiled by the Center for American Progress shows that Black, Latine, Native, and Asian people, immigrants, single-parent families, people without children, people with disabilities, and LGBTQIA people are all more likely to have family structures and family caregiving needs over the course of their lives that extend beyond traditional nuclear family relationships. The updated FAMILY Act will make family caregiving leave available on a more equitable basis to people in all types of family relationships.

(5) Wage replacement: Workers will receive paid leave benefits on a sliding scale, so that low-wage workers’ benefits will replace a higher share (up to 85 percent) of their typical wages.

New: The newly-improved FAMILY Act adopts scaled wage replacement, similar to most of the newer state paid family and medical leave programs. Workers would receive: 85% of their first $1,257 in average monthly earnings from work or self-employment income. For workers who typically earn above $1,257 per month, monthly benefits would be a blended rate of 85 percent of the first $1,257, plus 69 percent of average monthly earnings between $1,258 and $3,500, and 50 percent of average monthly earnings of between $3,501 and $6,200.

In practical terms, this means that:

• A minimum wage worker will receive 85 percent of their usual wages.
• A person who earns half of the current U.S. median wage will receive 78 percent of their usual wages.
• A person who is paid the current median weekly wage ( $1,110 in the first quarter of 2023) will receive 70 percent of their wages.
• A person who is paid 1.5 times the median weekly wage will receive about 60 percent of their usual wages.
• A higher-wage worker who is paid twice the median weekly wage will receive 40 percent of their wages.

This table shows how state paid leave programs’ effective wage replacement rates compare for workers at these wage thresholds.

The maximum monthly benefit provided by the bill is $4,000, and the minimum monthly benefit is $580, as in the original FAMILY Act. All amounts will be indexed over time, based on the national average wage index.

Original: The original FAMILY Act provided a flat 66 percent wage replacement rate, up to a maximum monthly benefit of $4,000 per month.

Impact: Scaled wage replacement will make leave accessible to more workers, especially middle- and lower-wage workers. Research shows that a minimum of 80 percent wage replacement is required to make a program accessible for low-wage workers. All except three state paid leave programs meet or exceed this standard, and one of those (California) recently passed legislation that will implement a significant wage replacement improvement in 2025.

(6) Employment protections: Workers who take FAMILY Act leave will be able to return to their jobs, maintain their health insurance coverage, and be protected from workplace retaliation and discrimination.

New: The newly-improved FAMILY Act provides that, after a 90-day probationary period upon starting a new job, workers’ jobs will be protected when they need to take a paid family and medical leave. This fills the gaps left by worker eligibility and employer coverage rules of the FMLA, which serve to exclude approximately 44 percent of workers. The FAMILY Act also prohibits discrimination and retaliation against workers who apply for, take, or express an intent to apply for or take FAMILY Act leave. Several states have job protection built into their paid leave programs or have expanded their state’s unpaid leave laws.

Original: The original FAMILY Act included anti-retaliation protections for workers who applied for or expressed an intent to apply for paid leave benefits, but contemplated that job protection would come through parallel application of the FMLA.

Impact: Workers who fall outside the FMLA’s job protections are disproportionately paid lower wages, have less education, are single parents, Latine, foreign born, live in rural areas, and are women. Many are also less likely to have paid leave through their jobs and to have lower-quality jobs with little workplace voice. Research from states shows that lack of job protection is a barrier to workers using the paid leave programs available to them. Adding job protection to the FAMILY Act will help to make leave accessible to all workers who have a qualifying need; it also closes gaps in job protection for family caregiving coverage that would arise if FAMILY Act leave were to include an expansive definition of “family” but the FMLA’s family definition remained more limited.

(7) State programs: States with pre-existing paid leave programs will be able to continue to offer benefits, with new federal funding available to offset the costs that would otherwise be borne by the federal program.

New: The newly-improved FAMILY Act adopts a designation of “legacy states” (a concept first included in then-Chairman Richard Neal’s House Ways and Means Committee Building an Economy for Families Act in 2021) to signify and honor state leadership in the early adoption of paid family and medical leave programs. If states with existing programs at the time the FAMILY Act is enacted can show that their benefits are at least as generous and inclusive as federal benefits, and if states agree to enter into data sharing agreements with the federal government, federal funding would be available to offset the state program costs that would otherwise be borne by the federal program if workers in those states participated in the federal paid leave program. The notion of legacy states allows workers to continue to receive benefits from their state agencies as they do now rather than from the new federal Office of Paid Family and Medical Leave that the FAMILY Act creates. The bill also includes a “volunteer advisory body” familiar with state programs to advise the federal government on regulations.

Original: The original FAMILY Act — which was drafted when just three states had or would soon have comprehensive paid family and medical leave programs — contemplated a “volunteer advisory body” that included experts in and administrators of state paid leave programs to determine how to harmonize state and federal paid leave benefits. This language remains in the bill, in addition to the “legacy state” language described above.

Impact: The new FAMILY Act language recognizes that workers and businesses in paid leave states are used to receiving benefits from and dealing with a state-based agency and that states have invested time and resources in creating home-grown programs; it also reflects the fact that some states’ benefits are more generous in terms of wage replacement, leave duration, and/or the purposes for which one may take leave. There are further details to work out with respect to this provision as the legislation moves forward to ensure that no entities face double taxation and to define equivalence of benefits, but the concept of legacy states should facilitate the harmonization and simplification of benefit provision for employers and workers alike.

In addition to the eligibility, coverage, and benefits provisions outlined above, the FAMILY Act includes provisions regarding program funding and administration.

Funding: Like the original FAMILY Act, the new version of the bill is funded through a 0.4 percent payroll contribution, shared between employers and employees, or paid fully by self-employed people — a model that has been used for decades with Social Security and Medicare contributions. Comprehensive state paid leave programs are also funded through payroll contributions paid by employers, workers, or both (a chart of rates and taxable wage base is here).

The newly-improved version of the bill creates a fairer contribution system than the original bill by using the Medicare taxable wage base, where all wages are subject to contributions, rather than the Social Security wage base, which functions in a more regressive way for low- and middle-wage workers. California (beginning in 2024), the District of Columbia and Delaware also use this approach.

Administration: The FAMILY Act in both its original and new form creates an Office of Paid Family and Medical Leave within the Social Security Administration (SSA). This federal agency serves similar functions for other national social insurance programs, has good reach into the public with communications capacity and field offices, and has or could easily be granted access to data to administer the FAMILY Act program. Administrative funding for the new program would come from the revenue raised to pay FAMILY Act benefits. In order to equip SSA for success in managing existing responsibilities and taking on new ones, additional resources beyond those included in the FAMILY Act but under discussion in budget and appropriation discussions are needed to ensure reliable and efficient customer service.

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A national paid family and medical leave program like the FAMILY Act has broad public support, has been tested at the state level, and is essential for workers and businesses, families, and the economy. The status quo — where workers depend on employer-sponsored benefits, isn't working for tens of millions of people and their families. Nearly a decade after the original FAMILY Act's introduction, it's time for Congress to finally guarantee paid family and medical leave to every working person in the United States, no matter where they live, work, their job, or their serious care needs.

For further reading

Federal policy and landscape:

The Family and Medical Insurance Leave Act (National Partnership for Women & Families)

As 2022 Ends, We've Seen What the Federal Government Can Do – Yet the Vast Majority of U.S. Workers and Families Are Still Waiting for Paid Leave (New America)

State of Paid Family and Medical Leave in the U.S. in 2023 (Center for American Progress)

Evolution of Federal Paid Family and Medical Leave Policy (Urban Institute and New America)

Key Elements of the Build Back Better Act’s Paid Family and Medical Leave Proposal Explained (New America)

Polling Summary: In Build Back Better, Paid Family and Medical Leave Is One of the Most Popular Policies (New America)

State policies:

Explainer: State Paid Leave Benefits and Funding (New America)

Comparative Chart of Paid Family and Medical Leave Programs in the United States (A Better Balance)

State Paid Family and Medical Leave Laws (National Partnership for Women & Families)