VT FaMLI FAQ

FAQs

For the current status of H.196, read more here.

 

1. What is Family and Medical Leave Insurance?

Family and Medical Leave Insurance (FaMLI) is an insurance program that allows
employees to take longer-term paid leave to bond with or care for a new child, an ill or
injured family member, or to recover from a serious long-term illness or injury.

2. Why is FaMLI important?

While many employees nationally and in Vermont are eligible for unpaid family leave
through the federal Family and Medical Leave Act (FMLA) and/or the Vermont Parental
and Family Leave Act (PFLA), leave remains inaccessible for those who work for small
employers or who cannot afford to take time off unpaid. Implementing an insurance
program for paid family and medical leave would increase access to leave and will
ultimately provide greater stability and economic security for workers without undue
financial or administrative impact on employers.

3. How is FaMLI different than Paid Sick Days?

Paid sick days cover short-term leave (up to five days by 2019 under VT’s current law) for
recovery from illness or routine health care appointments and are paid for by the
employer as part of an employee’s compensation/benefit package. Family and Medical
Leave Insurance (FaMLI) is an insurance program that allows employees to take longerterm
paid leave to bond with or care for a new child, or recover from a serious, non-work
related illness or injury.

Additionally, paid sick days are paid for by the employer directly. A statewide family and
medical leave insurance program would not require employers to cover the cost of longterm
leave by themselves. A statewide insurance program would be publicly financed
through a payroll deduction.

4. How is FaMLI different than Maternity/Paternity leave? Short-term and Long-term
Disability leave?

Family and Medical Leave Insurance (FaMLI), Maternity/Paternity leave, and Paid Family
Leave, are sometimes used interchangeably. However, there are many differences
between the FaMLI program and the maternity, paternity, or parental/family leave
policies individual businesses in Vermont may currently have.

Family and Medical Leave Insurance operates like an insurance program. Employees, or
employers and employees, contribute a certain, very small percentage of wages or payroll
to a state fund. Then, if an employee or an employee’s spouse has a new child, or if the
employee or employee’s family member becomes seriously ill or injured, the employee
could apply to this program and receive a certain number of weeks paid at a certain level
of wage replacement.

In the current absence of such a program in Vermont, employers must decide whether or
not they can afford to offer this benefit and those who choose to, must pay for the full
expense of an employee’s absence during this time. In a state like Vermont, where the
majority of businesses have fewer than 20 employees, it can be difficult for many
businesses to pay for employees to take maternity, paternity, parental, or family leave.
Employees who work for an employer without this benefit, must either use vacation, sick,
or personal time, or, if eligible under federal law, take unpaid time. This leaves employees
making the choice between maintaining their financial stability or bonding with a new
child, caring for themselves, or family members in times of crisis.

Some employers in Vermont also choose to offer short and long-term disability insurance
to employees. Like Maternity/Paternity Leave, this can also be financially difficult for
many small employers in Vermont to offer. The FaMLI program, along with care for new
children, also includes leave for non-work related, serious illness or injury, which would
relieve employers of offering short and long-term disability insurance, unless they chose
to continue to offer it as a supplemental benefit.

5. Do any other states have a program like this?

Yes. Currently four states (CA, NJ, RI, NY) and Washington D.C. have FaMLI laws in place.

6. How is FaMLI paid for?

Each state’s policy has a different funding mechanism. Some are funded only by employees
or employers, and some are jointly funded by employers and employees. A 2013 Vermont Study Committee explored the possibility of an employee-funded program, and the proposal currently under consideration in the legislature would establish a payroll deduction of .141% up to $150,000 in wages.

7. How much is this going to cost businesses?

The answer to this depends on how the program is financed (if the employer is
responsible for a share) as well as the size and length of the benefit. The proposal currently under
consideration in the legislature does not require employers to pay into the benefit.

It is important to note that employers will NOT be responsible to cover the cost of wages
directly under this program. Wage replacement will be administered by the state and
financed entirely through the small payroll deduction described above.

A key part of this legislation is job protection for employees who take leave under this
insurance program. Employers will likely be required to hold the employee’s job for them
during their absence. This may lead to additional costs associated with finding temporary
employment or paying overtime for existing staff. Employers will not be responsible to
pay wages for the employee taking leave, however they will be required to continue other
employee benefits, such as health insurance.

8. Will employees receive their full salary while they are on leave?

Each state’s policy differs. Generally, when employees are out on leave, they receive a
certain percentage of their average weekly salary, capped at a certain amount. The
legislation currently under consideration in Vermont would provide 80% wage
replacement up to a cap of two times the livable wage, as calculated by the Joint Fiscal
Office. In 2014, the livable wage was $13/hour.

9. How long is the leave?

Currently, state and federal laws allow certain eligible employees to take up to 12 weeks
of unpaid leave. States that have paid family & medical leave insurance programs provide
between 4-12 weeks of paid time off for family leave and between 26 and 52 paid weeks
for an employee’s own disability. The legislation currently under consideration in
Vermont would provide 6 weeks of paid family leave (the leave benefit for personal disability was removed).

10. Is there job protection for people who access family or medical leave?

Current Vermont law protects employment for people taking family and medical
leave if they work for an employer with more than 15 employees for family leave (for
one’s own or a family member’s illness or non work related injury) and with more than 10
employees for parental (to care or bond with a child) leave.

11. What is it used for?

Family and Medical Leave Insurance is used to:
• Care for/bond with a new child,
• Recover from a non-work related serious illness or injury,
• Care for a sick or injured family member.

12. Aren’t there already similar laws in place at the state or federal level?

Currently there are two laws in place related to family and medical leave. The federal law,
the Family and Medical Leave Act (FMLA) and Vermont’s law, Parental and Family Leave
Act (PFLA). Currently, both the federal and state laws allow certain eligible employees to
take unpaid leave to care for a new child or recover from illness or injury.

Under FMLA, employees are eligible for unpaid leave if they’ve worked at least 1250 hours
in the 12 months prior to taking the leave and if they work for an employer with 50 or
more employees within a 75-mile radius of the worksite from which they are taking leave.
Under PFLA, employees are eligible for unpaid leave if they’ve worked an average of 30
hours per week for one year. Employees who work for an employer that employs 10 or
more employees can take leave unpaid parental leave and employees who work for an
employer that employs 15 or more employees can take unpaid family leave.

13. Aren’t many businesses already doing this? What will happen to them?

There is not Vermont-specific data related to what businesses currently offer for
Maternity/Paternity Leave. However, a 2013 Fringe Benefit Study, which surveyed just
over 1,000 employers in VT, shows that employers with between 50 –250 employees are
much more likely to offer Short-term and Long-term Disability Insurance to their
employees than smaller employers.

Businesses that currently provide benefits that FaMLI would include (like
Maternity/Paternity, Short-term and Long-term Disability Insurance) may choose to
discontinue to their program since the state insurance plan will be available to their
employees or they may choose to provide an additional, wrap around benefit.