Paid Family and Medical Leave Act of 2005
Key Provisions
The Paid Family and Medical Leave Act builds on the highly successful Family and Medical Leave Act by providing up to 12 weeks of paid benefits to workers who take time off for reasons allowed under the Paid Family and Medical Leave Act. Beginning in 2008, workers will receive this benefit from a new “Family and Medical Leave Trust Fund,” financed through a .4% payroll contribution from employers.
Benefit
- Up to 12 weeks of paid leave over a 12-month period for workers who need time off for the same reasons allowed under the Family and Medical Leave Act. These purposes include: (1) the birth of a child; (2) the placement of adopted or foster child; (3) to care for a child, parent, spouse or other persons in their household who have a serious medical condition; or (4) because the employee has a serious medical condition that makes it impossible for employee to perform their job functions.
- Capped benefit of up to 55% of a weekly salary of $ 1,350 (Maximum benefit of $742.50 a week which is increased each year by the yearly national average wage index).
- Maintains Family and Medical Leave Act job protection for employees of companies of 50 and more employees, but does not extend this benefit to employees of smaller companies.
Financing
- Employers pay a .4% tax on employees’ wages, which is deposited into the new “Family and Medical Leave Trust Fund.”
- The “Family and Medical Leave Trust Fund” operates like the Social Security and Medicare Trust Funds.
Eligible Employees
All employees who worked the last full 4 quarters and earned at least $250 in each of those 4 quarters are eligible.
Self-employed workers can chose to opt into the system. In order to benefit they must have worked the last full 4 quarters, earned $250 in each of the last full 4 quarters, and must have paid into the “Healthy Families Trust Fund” for the last full 4 quarters.
- Employee must file an application to receive the benefit with implementing state agency, or the Social Security Administration if state has decided not to implement the program.
Program Administration
- The U.S. Department of Labor contracts with a state to administer the program. If a state decides not to administer the program, then the Secretary of Labor may make an interagency agreement with the Commissioner of Social Security to administer the program (This is similar to how the Social Security Administration implements its disability program).
Other Features
- Employers who have a plan that is equal or better can opt out of participating in the program.
