Paid Family and Medical Leave: Current Policy and Legislative Proposals in the 116th Congress

Paid Family and Medical Leave: Current Policy and Legislative Proposals in the 116th Congress

Paid Family and Medical Leave: Current Policy
June 3, 2020
and Legislative Proposals in the 116th Congress Molly F. Sherlock
The Family and Medical Leave Act of 1993 (FMLA; P.L. 103-3, as amended) is the primary
Specialist in Public Finance
federal policy governing family and medical leave. Under FMLA, eligible workers are provided

with a federal entitlement to unpaid leave for a limited set of family caregiving and medical
Barry F. Huston
needs. With few exceptions, FMLA guarantees only unpaid leave. Recently, Congress has
Analyst in Social Policy
expanded access or created incentives for expanded access to paid family and medical leave for

certain groups of workers , in some cases temporarily. Starting October 1, 2020, most federal civil
service employees eligible for FMLA leave will have a paid parental leave benefit. Additionally,
Sarah A. Donovan
through 2020, Internal Revenue Code (IRC) Section 45S allows a tax credit designed to
Specialist in Labor Policy
encourage private-sector employers to provide paid family and medical leave. The Families First

Coronavirus Response Act (FFCRA; P.L. 116-127, as amended) created a temporary entitlement
for certain worker groups to partially paid FMLA leave to care for the employee’s minor child

whose school or place of care is closed, or whose care provider is unavailable due to the
Coronavirus Disease 2019 (COVID-19) public health emergency; this entitlement applies to leave taken between April 1 and
December 31, 2020.
Legislators in the 116th Congress have put forth numerous proposals that would provide paid leave for at least some FMLA -
related purposes. One proposal, the Family and Medical Insurance Leave Act (H.R. 1185, S. 463), or the FAMILY Act,
would create a new social insurance program to provide up to 60 days per year of paid family or medical leave. Payments
from the new social insurance program would equal about two-thirds of income, up to $4,000 per month. The new benefit
would be financed with a 0.2% payroll tax on workers and employers, such that the combined tax rate on covered
employment wages and self-employment income would be 0.4%.
Other proposals would modify existing entitlement programs. The New Parents Act of 2019 (H.R. 1940, S. 920) would
effectively allow new parents to temporarily access Social Security retirement benefits before the current-law eligibility age.
In return, parents who elected to receive benefits upon the arrival or adoption of a new child would accept an increase in their
retirement age or receive reduced Social Security benefits at their current-law retirement age. The delay in retirement benefit
receipt or reduction in individuals’ Social Security benefits would be expected to largely offset the cost of providing up to
three months of benefits for new parents.
Several tax policy proposals would either provide temporary tax savings, or create a tax incentive for private savings, to
financially support family (largely parental) leave or medical leave taking. The Advancing Support for Working Families Act
(S. 2976, H.R. 5296) is not explicitly linked to leave taking following the birth of a child, but would effectively allow
taxpayers to reduce their tax liability (which for many taxpayers can mean a larger tax refund) upon the arrival of a child,
with these funds being repaid through an increase in individual income tax liability over time. The Supporting Working
Families Act (S. 2437) would allow taxpayers the option to receive a refundable parental leave tax credit. The tax credit
would later be repaid through increased taxes during a future recapture period. The Working Parents Flexibility Act of 2019
(H.R. 1859) would create a tax-advantaged parental leave savings account. The Freedom for Families Act (H.R. 2163) would
allow taxpayers to use health savings accounts (HSAs) to self-finance periods of family or medical leave. These policies
generally do not guarantee access to leave or protect workers’ jobs if they take leave. Instead, they aim to reduce the financial
burden associated with individuals’ leave taking.
Lawmakers in the 116th Congress have been exploring various paid family and medical leave policy options. In the House,
the Committee on Ways and Means has held hearings on paid family and medical leave. In 2019, the Senate Finance
Committee established a bipartisan Finance Committee working group to “consider the issue of federal paid family leave
policy.” This report discusses legislative proposals in the 116th Congress designed to either provide or promote access to paid
family or medical leave.

Congressional Research Service

link to page 4 link to page 5 link to page 6 link to page 12 link to page 12 link to page 13 link to page 15 link to page 15 link to page 17 link to page 23 link to page 24 link to page 8 link to page 19 link to page 23 link to page 28 link to page 31 Paid Family and Medical Leave: Current Law and Legislative Proposals

Contents
Family and Medical Leave: Current Federal Policies ............................................................ 1
The Family and Medical Leave Act (FMLA) ................................................................. 2
Federal Employees .................................................................................................... 3
Employer Tax Credit for Paid Family and Medical Leave ................................................ 9
Paid Family and Medical Leave: Legislative Proposals in the 116th Congress ........................... 9
Create a New Social Insurance Program: The FAMILY Act ............................................ 10
Proposals to Modify Existing Social Insurance Programs ............................................... 12
The New Parents Act of 2019 ............................................................................... 12
The CRADLE Act .............................................................................................. 14
Paid Family and Medical Leave: Federal Workforce Proposal......................................... 20
Tax Policy Proposals to Support Paid Family and Medical Leave .................................... 21

Tables
Table 1. Family and Medical Leave: Current Federal Policies ................................................ 5
Table 2. Family and Medical Leave: Entitlement Program Proposals ..................................... 16
Table 3. Family and Medical Leave: Federal Workforce Proposal ......................................... 20
Table 4. Family and Medical Leave: Tax Policy Proposals ................................................... 25

Contacts
Author Information ....................................................................................................... 28

Congressional Research Service

Paid Family and Medical Leave: Current Law and Legislative Proposals

awmakers in the 116th Congress have been exploring various paid family and medical
leave policy options. In the House, the Committee on Ways and Means has held hearings
L on paid family and medical leave.1 In 2019, the Senate Finance Committee established a
bipartisan Finance Committee working group to “consider the issue of federal paid family leave
policy.”2 As discussed in this report, there are several legislative proposals designed to either
provide or promote access to paid family or medical leave.
There is broad support for family and medical leave policies that provide employees with
financial security when circumstances require them to take leave from work for their own serious
medical needs or to care for their child or a family member.3 There is less consensus, however, as
to what the federal role should be in providing or ensuring that leave is available to al employees.
There are also questions about who should pay for paid leave: the federal government (through
tax revenue), employers, or employees?
Currently, access to paid family and medical leave varies across worker groups. Higher-wage
workers are more likely to have access to paid family leave than workers in the lower part of the
wage distribution.4 Access to paid family leave also varies across industries. Those in
management or professional fields are more likely to have access to paid family leave than those
in other industries. Large employers are more likely to provide paid family leave than smal ones.
There is also geographic variation in access to paid family and medical leave. Some states have
created state-level paid family and medical leave programs, which provide cash benefits to
eligible workers.5
This report provides an overview of current federal family and medical leave policies. It then
discusses proposals in the 116th Congress, including proposals that would create a new social
insurance program, proposals related to the federal workforce, and tax policy proposals. For
background information, as wel as information on state-level paid family and medical leave
policies, see CRS Report R44835, Paid Family and Medical Leave in the United States, by Sarah
A. Donovan.
Family and Medical Leave: Current Federal Policies
The Family and Medical Leave Act of 1993 (FMLA; P.L. 103-3, as amended) is the primary
federal policy governing family and medical leave. Under FMLA, eligible workers are provided
with a federal entitlement to unpaid leave for a limited set of family caregiving and medical

1 U.S. Congress, House Committee on Ways and Means, Paid Family and Medical Leave: Helping Workers and
Em ployers Succeed, 116th Cong., May 8, 2019, at https://waysandmeans.house.gov/legislation/hearings/paid-family-
and-medical-leave-helping-workers-and-employers-succeed-0; and U.S. Congress, House Committee on Ways and
Means, Legislative Proposals for Paid Fam ily and Medical Leave, 116th Cong., January 21, 2020, at
https://waysandmeans.house.gov/legislation/hearings/legislative-proposals-paid-family-and-medical-leave.
2 United States Senate Committee on Finance, “Grassley, Wyden Convene Finance Committee Paid Family Leave
Working Group,” press release, May 22, 2019, at https://www.finance.senate.gov/chairmans-news/grassley-wyden-
convene-finance-committee-paid-family-leave-working-group. An update on the working group’s work, as of March 6,
2020, can be found at https://www.finance.senate.gov/download/paid-leave-update.
3 Yuki Noguchi, “Paid Family Leave Gains Momentum in States as Bipartisan Support Grows,” NPR, March 5, 2019,
at https://www.npr.org/2019/03/05/698336019/paid-family-leave-gains-momentum-in-states-as-bipartisan-support-
grows.
4 Data on paid family and medical leave access by worker and employer establishment characteristics can be obtained
from the Bureau of Labor Statistics, Employee Benefits Survey. T he most recent data on paid leave benefits are for
March 2019, available at https://www.bls.gov/ncs/ebs/benefits/2019/benefits_leave.htm.
5 CRS Report R44835, Paid Family and Medical Leave in the United States, by Sarah A. Donovan.
Congressional Research Service
1

link to page 8 Paid Family and Medical Leave: Current Law and Legislative Proposals

needs. With the exception of a temporary paid leave entitlement created in response to the
Coronavirus Disease 2019 (COVID-19) public health emergency, no federal law requires private-
sector employers to provide paid leave of any kind.6 Starting October 1, 2020, most federal civil
service employees who are eligible for FMLA leave wil have a paid parental leave benefit.
Additional y, through 2020, there is a tax credit designed to encourage private-sector employers
to provide paid family and medical leave. Other federal policies, such as those that al ow
borrowing of or early access to retirement funds, may also support individuals during periods of
leave taking.7 Summary information for key federal leave-related laws discussed in this section is
presented in Table 1.
The Family and Medical Leave Act (FMLA)
The Family and Medical Leave Act of 1993 (FMLA; P.L. 103-3, as amended) entitles eligible
employees to unpaid, job-protected leave for certain family and medical needs, with continuation
of group health plan benefits.8 The FMLA requires that covered employers grant up to 12
workweeks of leave in a 12-month period to eligible employees for one or more of the following
reasons:
 the birth and care of the employee’s newborn child, provided that leave is taken
within 12 months of the child’s birth;
 the placement of an adopted or fostered child with the employee, provided that
leave is taken within 12 months of the child’s placement;
 to care for a spouse, child (general y a minor child), or parent with a serious
health condition;9
 the employee’s own serious health condition that renders the employee unable to
perform the essential functions of his or her job; and
 qualified military exigencies if the employee’s spouse, child (of any age),10 or
parent is a covered military member on covered active duty.
In addition, the act provides up to 26 workweeks of leave in a single 12-month period to eligible
employees for the care of a covered military servicemember (including certain veterans) with a
serious injury or il ness that was sustained or aggravated in the line of duty while on active duty.

6 T he Families First Coronavirus Response Act (FFCRA; P.L. 116-127) created two new and temporary leave benefits
for eligible employees: (1) emergency Family and Medical Leave Act (FMLA) leave to care for the employee’s minor
child whose school or place of care is closed, or whose care provider is unavailable due to the COVID-19 public health
emergency (such leave is paid leave after an initial 10 days of unpaid leave), and (2) paid sick leave for certain
COVID-19-related needs. T he FFCRA included tax credit provisions to help employers (including the self -employed)
cover costs related to paid leave. Both paid leave benefits took effect on April 1, 2020, and apply to leave between
April 1, 2020, and December 31, 2020. Additional information on the FFCRA temporary paid leave entitlements is in
CRS In Focus IF11487, The Fam ilies First Coronavirus Response Act Leave Provisions, by Sarah A. Donovan and Jon
O. Shimabukuro.
7 For example, the Setting Every Community Up for Retirement Enhancement (SECURE) Act , enacted as Division O
to the Further Consolidated Appropriations Act, 2020 ( P.L. 116-94), contained a provision allowing penalty-free IRA
distributions of up to $5,000 for one year following a qualified birth or adoption. Generally, retirement plan
distributions made before an individual is 59½ are subject to a 10% penalty. T his policy is not tied to leave taking and
therefore is not discussed in detail in this report.
8 See 29 U.S.C. Chapter 28. For additional information on the Family and Medical Leave Act (FMLA), see CRS Report
R44274, The Fam ily and Medical Leave Act: An Overview of Title I , by Sarah A. Donovan.
9 Under the FMLA, a serious health condition is one that requires inpatient care or continuing treatment by a health
care provider. See 29 U.S.C. §2611(11) and 29 C.F.R. §825.113 -115 for definitions.
10 See 29 C.F.R. §825.102.
Congressional Research Service
2

Paid Family and Medical Leave: Current Law and Legislative Proposals

FMLA leave has four fundamental characteristics:
 It is an entitlement, which means that, unlike other forms of leave (e.g., vacation
days), it must be granted to an eligible employee with an FMLA-qualifying need
for leave who meets the act’s notification and documentation requirements.
 FMLA guarantees unpaid leave, but provides that employees may elect to
substitute (or employers may require the substitution of) certain types of accrued
paid leave for unpaid FMLA leave, within the constraints of employer policy.
 FMLA leave is job-protected, which means that—with few exceptions—an
employer must return the employee to the same job or to one that is equivalent in
terms of pay, benefits, working conditions, and responsibilities to the one held
prior to taking leave.
 Preexisting group health benefits must be maintained during the employee’s
absence under the same conditions that were in place prior to taking leave.
FMLA eligibility is defined in terms of an employee’s work history with her or his current
employer. Workers covered by Title 29 FMLA provisions (private sector, state and local
governments, and some federal workers) must work for a covered employer for at least 12 months
and have worked at least 1,250 hours the 12 months prior to the start of leave.11 The employer
must also employ at least 50 or more employees within 75 miles of the employee’s worksite.
Most federal civil service employees are covered by Title 5 FMLA provisions; such employees
must only meet a 12-month service requirement for eligibility.12
Employees must provide a 30-day advance notice to employers when the need for leave is
foreseeable based on an expected birth or a scheduled medical treatment. Otherwise, notice must
be provided as soon as practicable. In general, the FMLA does not include a return to work
requirement (separate rules apply to certain federal workers), but al ows some employers to
recover their share of health benefit premiums paid during a period of FMLA leave if the
employee does not return to work following the expiration of the employee’s leave entitlement,
with some exceptions.13
Federal Employees
Federal civil service employees are entitled to paid sick leave and paid annual leave as workplace
benefits, and both may be used for certain family and medical leave needs. Full-time federal
employees can earn up to 13 days of sick leave per year and are entitled to use such leave for
personal medical needs, care of a family member, the death of a family member, and the adoption
of a child.14 Sick leave may not be used to bond with a healthy child. Federal employees can earn
between 13 and 26 days of annual leave, which may be used for any purpose, subject to a
supervisor’s approval of the timing of leave.15

11 Private-sector employers are covered by the act if they engaged in commerce and had 50 or more employees for 20
weeks in the current or previous calendar year. Federal, state, and local governments are covered employers regardless
of their staffing levels in the previous or current calendar year. Separate hours-of-service requirements apply to airline
flight crew employees.
12 5 U.S.C. §6381(1).
13 29 U.S.C. §2614(c)(2).
14 5 U.S.C. §6307 and 5 C.F.R. §630.401.
15 5 U.S.C. §6303 and U.S. Office of Personnel Management (OPM), Fact Sheet: Annual Leave, at
https://www.opm.gov/policy-data-oversight/pay-leave/leave-administration/fact-sheets/annual-leave/.
Congressional Research Service
3

Paid Family and Medical Leave: Current Law and Legislative Proposals

The National Defense Authorization Act for Fiscal Year 2020 (FY2020 NDAA, P.L. 116-92)
amended the FMLA to provide a new paid parental leave benefit to most federal civil service
employees. Covered federal employees may use up to 12 weeks of paid parental leave for the
arrival of a new child by birth, adoption, or foster care placement and for bonding with that child.
The leave is available for children born to or placed with the employee on or after October 1,
2020, and must be used within 12 months of the child’s arrival. This leave is in addition to federal
employees’ annual and sick leave benefits. The paid parental leave benefit must be used together
with the employee’s FMLA leave entitlement.
There are some differences between legislative branch employees’ access to paid parental leave
benefits and those of the broader federal civil service. Federal civil service employees must meet
the FMLA eligibility requirement (i.e., 12 months of service). In contrast, the FMLA eligibility
requirements for legislative branch employees covered by the Congressional Accountability Act
(CAA, P.L. 104-1) and for Government Accountability Office (GAO) employees do not apply to
the paid parental leave benefit (i.e., such workers are immediately eligible for paid parental leave
benefits). In addition, use of the paid parental leave benefit by federal civil service employees is
conditioned upon an agreement from the employee that he or she wil return to work for the
employing agency for 12 workweeks following the conclusion of that leave. Should an employee
fail to do so and if certain conditions enumerated in the act do not apply, the employing agency
may recoup its contributions to the employee’s health care premiums made during the period of
leave. No such requirement is provided for legislative branch employees covered by the CAA or
for GAO employees.

Congressional Research Service
4

link to page 10 link to page 10 link to page 11 link to page 10 link to page 11 link to page 11
Table 1. Family and Medical Leave: Current Federal Policies
Paid Parental Leave for Federal Civil

Family and Medical Leave Act (FMLA)
Service Employees
Employer Tax Credit
General Overview
Provides an entitlement to unpaid, job-
Provides 12 weeks of paid parental leave. To
Tax credit for employers who provide paid
protected leave for certain family and medical
claim the paid leave benefit, employees must
family and medical leave to their employees.
needs, with continuation of group health care
invoke their rights to FMLA-protected leave for
benefits.
the arrival and care of a new child.
Effective Years
Took effect on August 5, 1993, with no
Takes effect on October 1, 2020, with no
Taxable years beginning in 2018, 2019, or 2020.
expiration date.
expiration date.
Qualifying Events
For the arrival of the employee’s child by birth,
For the arrival of the employee’s child by birth,
Providing leave that is specifical y designated for
adoption, or foster care placement, and to care
adoption, or foster care placement, and to care
one or more FMLA purposes. Employers may
for that child within the first 12 months after
for that child within the first 12 months after
elect to forego the tax credit for any tax year.
arrival (i.e., parental leave).a
arrival (i.e., parental leave).a
To care for a spouse, child, or parent with a

serious health condition.b
The employee's own serious health condition
that renders the employee unable to perform
the essential functions of his or her job.
Certain military family needs.c
Eligibility
In general, 12 months of employment and 1,250 In general, 12 months of service before taking
An eligible employer is a taxable employer (i.e.,
hours of employment with current employer,
leave.
subject to the federal income tax) that has a
and work at a worksite with at least 50
No eligibility requirements for legislative
written policy that covers al qualifying
employees in a 75-mile radius.d
branch employees covered by the CAA or for
employees. An employer must provide at least
Most federal civil service employees must have
GAO employees.
2 weeks of annual paid family and medical leave
12 months of service before taking FMLA
to ful -time employees to be tax-credit eligible.
leave.e
The leave rate of payment must be at least 50%
of the wages normal y paid to employees for an
No eligibility requirements for legislative
employer’s leave policy to be tax-credit eligible.
branch employees covered by the
Congressional Accountability Act (CAA, P.L.
Qualifying employees are those who (1) have
104-1) and GAO employees who take FMLA
been employed by the employer for at least
parental leave.
one year; and (2) did not have previous-year
compensation in excess of 60% of the amount
determined for highly compensated employees
under IRC §414(q)(1)(B)(i), or $72,000 in 2018.
CRS-5

link to page 11 link to page 11 link to page 11 link to page 11
Paid Parental Leave for Federal Civil

Family and Medical Leave Act (FMLA)
Service Employees
Employer Tax Credit
Benefit Duration
Up to 12 weeks of unpaid leave in a 12-month
Up to 12 weeks of paid parental leave in a 12-
Up to 12 weeks in paid leave may be taken into
period.f Employees are also entitled to 26
month period.f
account for the purposes of computing the tax
weeks of leave in a single 12-month period to
credit.
care for a seriously il or injured covered
military servicemember.g
Benefit Amount
FMLA leave is unpaid.
Employee’s regular pay rate.
The tax credit is computed as wages paid to a
qualifying employee multiplied by an applicable
percentage. The applicable percentage is 12.5%
if paid leave wages are 50% of wages normal y
paid. The applicable percentage increases by
0.25 for each percentage point by which paid
leave wages exceed 50% of wages normal y
paid, until the maximum applicable percentage
of 25% is reached.
Interaction with
An employee’s group health insurance coverage
The paid parental leave benefit must be used
The tax credit cannot be claimed for leave paid
Other Benefits
is maintained during FMLA leave on the same
concurrently with FMLA leave, drawing down
by a state or local government or required by
terms as if he or she had continued to work.
the employee’s FMLA leave entitlement. As
state or local law.
FMLA leave may be used concurrently with
such, an employee’s group health insurance
employer-provided paid leave (e.g., annual or
coverage is maintained during FMLA leave on
sick leave). However, employers are not
the same terms as if he or she had continued
required to approve paid sick leave for uses
to work.
that are not covered under the employer’s sick

leave policy.
Job Protection
In general, yes.h The FMLA provides, with few
In general, yes, because the paid leave is used
Similar to FMLA. If an employer employs
exceptions, that an employee is entitled, upon
together with FMLA leave, which is job
qualifying employees who are not covered by
return from FMLA leave, to be restored to the
protected.
title I of the FMLA, the employer's written
position held by the employee when the leave
policy must include language providing “non-
commenced; or to be restored to an equivalent
interference” protections.
position with equivalent benefits, pay, status,
and other terms and conditions of
employment.
CRS-6

Paid Parental Leave for Federal Civil

Family and Medical Leave Act (FMLA)
Service Employees
Employer Tax Credit
Employer Notice
Employees must provide a 30-day advance
Because the paid parental leave benefit must be
Similar to FMLA, but details of employer
or Return to
notice to employers when the need for leave is
claimed concurrently with FMLA, the FMLA
policies may vary.
Work
foreseeable based on an expected birth or a
notice requirement applies (i.e., 30-day notice
Requirements
scheduled medical treatment. Otherwise,
to employers for foreseeable leave).
notice must be provided as soon as practicable.
Most federal employees who use paid parental
In general, the FMLA does not include a return
leave or otherwise substitute paid leave (e.g.,
to work requirement, but does al ow some
sick or annual leave) for unpaid leave during
employers to recover their share of health
periods of FMLA-protected parental leave must
benefit premiums paid during a period of FMLA
agree in writing to return to their employing
leave if the employee does not return to work
agency for 12 workweeks at the conclusion of
fol owing the expiration of the employee's leave
such leave. Should an employee fail to do so
entitlement, with some exceptions.
and if certain statutory conditions do not apply,
Effective October 1, 2020, federal employees
the employing agency may recoup its
covered by 5 U.S.C. Chapter 63, subchapter V
contributions to the employee's health care
who use paid leave during periods of FMLA-
premiums made during the period of leave.
protected parental leave must agree in writing
This requirement does not apply to legislative
to return to their employing agency for 12
branch employees covered by the CAA or to
workweeks at the conclusion of such leave.
GAO employees.
Should an employee fail to do so and if certain
statutory conditions do not apply, the
employing agency may recoup its contributions
to the employee's health care premiums made
during the period of leave.
Financing
None.
Employing agencies’ salaries and expenses
Reduces federal income tax revenue by
accounts.
reducing employer tax liabilities.
Sources: CRS analysis of the National Defense Authorization Act for FY2020 (FY2020 NDAA, P.L. 116-92), the Family and Medical Leave Act of 1993 (FMLA, P.L. 103-
3, as amended), the Congressional Accountability Act (CAA, P.L. 104-1 as amended), and 26 U.S.C. §45S.
Notes:
a. Under FMLA, a child refers to a biological, adopted, or foster child, a stepchild, a legal ward, or a child of a person standing in loco parentis, who is under 18 years
of age; or 18 years of age or older and incapable of self-care because of a mental or physical disability.
b. The term “serious health condition” means an il ness, injury, impairment, or physical or mental condition that involves inpatient care in a hospital, hospice, or
residential medical care facility; or continuing treatment by a health care provider.
CRS-7

c. Eligible employees may use FMLA-protected leave for a qualified military exigency arising from the covered active-duty status of a covered military member who is
the employee’s spouse, child, or parent, and to care for a covered military servicemember (including certain veterans) with a serious inju ry or il ness that was
sustained or aggravated in the line of duty while on active duty, if the eligible employee is the covered servicemember’s spouse, child, parent, or next of kin.
d. These provisions apply to private-sector and state and local government employees, and federal employees not covered by FMLA provisions at 5 U.S.C. Chapter 63,
subchapter V. Legislative branch employees covered by the CAA and GAO employees must also have worked 1,250 hours in the 12 months preced ing leave, unless
the hours-of-service requirement is waived in rules or regulations governing the legislative branch agency’s personnel management system.
e. This applies to federal employees covered by 5 U.S.C. Chapter 63, subchapter V.
f.
The employer determines how the 12-month period is calculated (e.g., calendar year, fiscal year, 12 months starting on the first day of leave).
g. The combination of military caregiver leave and other FMLA-qualified leave cannot exceed 26 weeks in a 12-month period that starts on the first day that military
caregiver leave is used. FMLA leave used for the arrival and care of a new child, serious health conditions, and qualified military exigencies is always capped in total at
12 workweeks in the 12-month period. See 29 C.F.R. §825.127(e).
h. Private-sector employers, state and local governments, and certain federal employers may deny job reinstatement to certain highly paid, salaried employees—cal ed
key employees—if doing so is “necessary to prevent substantial and grievous economic injury to the operations of the employer”; 29 U.S.C. §2614(b).

CRS-8

link to page 19 Paid Family and Medical Leave: Current Law and Legislative Proposals

Employer Tax Credit for Paid Family and Medical Leave
An employer tax credit for paid family and medical leave (PFML) can be claimed by employers
providing paid leave (wages) to employees under the FMLA.16 The credit can be claimed for
wages paid during tax years that begin in 2018, 2019, and 2020. Only taxable employers, those
subject to federal income taxes, can claim the tax credit.
The credit amount is equal to up to 25% of PFML wages paid to qualifying employees.17 The
credit can only be claimed for PFML provided to certain employees with incomes below a fixed
threshold.18 For credits claimed in 2019, employee compensation in 2018 cannot have exceeded
$72,000. The amount of PFML wages for which the credit is claimed cannot exceed 12 weeks per
employee per year. Further, al full-time employees must be provided at least two weeks of PFML
for an employer to be eligible to claim the credit. Tax credits cannot be claimed for leave paid by
state or local governments, or for leave that is required by state or local law. To claim the credit,
an employer must have a written family and medical leave policy in effect. The policy cannot
exclude certain classifications of employees, such as unionized employees.
The employer credit for paid family and medical leave was added to the IRC in the 2017 tax
revision (P.L. 115-97; commonly referred to as the Tax Cuts and Jobs Act). Initial y, the credit
was effective for wages paid in 2018 and 2019. The credit was extended for one year, through
2020, by the Further Consolidated Appropriations Act, 2020 (P.L. 116-94).19
Paid Family and Medical Leave: Legislative
Proposals in the 116th Congress
Legislators in the 116th Congress have put forth numerous proposals that would provide paid
leave for at least some FMLA-related activities.20 The proposals reflect the wide range of policy
options that legislators can use to pay cash benefits for family leave or medical leave. For
instance, the Family and Medical Insurance Leave Act would create a new social insurance
program, whereas the New Parents Act would extend the benefits of an already existing social
insurance program. Summary information for the proposals discussed in this section is presented
in Table 2.

16 26 U.S.C. §45S. For additional information, see CRS In Focus IF11141, Employer Tax Credit for Paid Family and
Medical Leave, by Molly F. Sherlock.
17 T he applicable percentage is 12.5% if paid leave wages are 50% of wages normally paid. T h e applicable percentage
increases by 0.25 for each percentage point by which paid leave wages exceed 50% of wages normally paid, until the
maximum credit amount of 25% is reached.
18 A qualifying employee is one who, in the preceding year, did not have comp ensation in excess of 60% of the amount
applicable for a highly compensated employee under the nondiscrimination rules for qualified retirement plans (26
U.S.C. §414(q)(1)(B)).
19 T he Paid Family Leave Pilot Extension Act (S. 1628/H.R. 4964), which was introduced before P.L. 116-94 extended
the credit for one year, proposed that the credit be extended through 2022.
20 For the purposes of this report, paid leave legislation does not include proposals that would support caregiving.
Examples of legislation in the 116th Congress that would provide support to caregivers include the Americans Giving
Care to Elders (AGE) Act (S. 1351) and the Credit for Caring Act of 2019 (S. 1143/H.R. 2730).
Congressional Research Service
9

Paid Family and Medical Leave: Current Law and Legislative Proposals

Create a New Social Insurance Program: The FAMILY Act
The Family and Medical Insurance Leave Act (H.R. 1185), or the FAMILY Act, was introduced in
the House by Representative Rosa DeLauro. Its companion bil , S. 463, was introduced in the
Senate by Senator Kirsten Gil ibrand. The FAMILY Act would essential y create a new social
insurance program administered by the Social Security Administration (SSA). Thus, in addition to
the continuing administration of the Old-Age and Survivors Insurance (OASI) program, the
Disability Insurance (DI) program, the Supplemental Security Income (SSI) program, and the
low-income subsidy for Medicare Part D, SSA’s newly established Office of Paid Family and
Medical Leave would be responsible for
administering benefits payable under the
Credits or Quarters of Coverage
FAMILY Act.23
General y speaking, workers become insured for
To be eligible for benefits under the FAMILY
Social Security by earning credits or quarters of
Act, a worker must be insured for Disability
coverage (QC) during work in Social Security-
Insurance (DI) at the time of application for paid
covered employment. 21 The amount needed for a
credit or QC increases annual y with growth in
family and medical leave as wel as have earned
average earnings in the economy, as measured by
income from employment during the 12 months
Social Security’s average wage index.22 In 2020, a
prior to the application month.24 To be insured
worker earns one credit or QC for each $1,410 of
for DI, a worker must be fully insured and meet a
earnings, up to four per year. Therefore, a worker
earning $5,640 in covered employment at any point
recency-of-work requirement. Fully insured
in the calendar year would be credited with the
status is attained by earning one credit or quarter
maximum number (i.e., four) of QCs for that year.
of coverage for each calendar year after the
worker has turned 21 years old.25 Thus, the number of credits needed to be fully insured increases
with the worker’s age. General y speaking, workers must have worked in Social Security covered
employment for about one-quarter of their adult lives (i.e., after turning 21 years of age).26 To
fulfil the recency-of-work requirement, workers general y need 20 credits during the 40-quarter
period prior to disability (or application for benefits in the case of the FAMILY Act).27 This
indicates workers must have worked for 5 of the 10 years before disability (or application for paid
family or medical leave benefits in the case of the FAMILY Act) to fulfil the recency-of-work

21 T he SSA Office of the Chief Actuary (OCACT ) estimates that about 93% of workers in paid employment and self-
employment are working in Social Security-covered positions; about 89% of persons aged 21 -64 who work in covered
employment are insured for DI. SSA, OCACT , “Fact Sheet on the Old-Age, Survivors, and Disability Insurance
Program,” press release, December 31, 2019, at https://www.ssa.gov/oact/FACT S/fs2019_12.pdf.
22 T he average wage index is the average of all workers’ wages subject to federal income taxes and contributions to
deferred compensation plans. It is calculated using some wages that are not subject to the Social Security payroll tax.
23 T he Center for Medicare and Medicaid Services (CMS) administers Medicare, however, individuals can enroll
through the Social Security Administration (i.e., at SSA field offices). For more information on CMS, see CRS In
Focus IF10885, Medicare Overview.
24 At the time of application, the applicant must attest that his or her employer has been notified of the intent to take
leave as well as attest to not engaging in “regular employment.”
25 Section 214(a) of the Social Security Act; 42 U.S.C. §414(a). See also 20 C.F.R. §404.110.
26 See Social Security Administration (SSA), How You Earn Credits, January 2020, at https://www.ssa.gov/pubs/EN-
05-10072.pdf. A worker in noncovered employment (i.e., not subject to the Social Security payroll tax) would not earn
credits needed to become or maintain status for disability insurance. T hus, such a worker would not be eligible for
benefits under the FAMILY Act.
27 Section 223(c)(1) of the Social Security Act; 42 U.S.C. §443(c)(1). See also 20 C.F.R. §404.130.
Congressional Research Service
10

Paid Family and Medical Leave: Current Law and Legislative Proposals

requirement.28 Applicants must also meet the additional FAMILY Act income requirement (i.e.,
income from employment during the 12 months prior to application) to be eligible for benefits.29
The FAMILY Act would cover most FMLA-related caregiving activities. Workers could apply for
benefits under the FAMILY Act for the arrival and care of a new child (through birth, adoption, or
foster care placement), for the employee’s own serious health condition or the care of a close
family member with a serious health condition, and for the provision of certain military family
needs.30 While engaged in a qualified caregiving activity, eligible workers could collect benefits
for up to 60 days per year—with a limit of 20 days per month. The effective amount of cash
benefits paid to eligible workers would be, on a prorated basis, equal to two-thirds of the highest
annual income earned in the three-year period prior to application. For instance, a worker whose
highest annual income in the three-year period prior to application was $33,000 would receive an
annualized cash benefit of $22,000 or $1,833 during a month in which the maximum number of
leave days (i.e., 20) was used.31 This benefit amount would be prorated based on the number of
days of paid leave that were to be used. Thus, a similar worker taking 10 leave days would
receive a benefit of $917. The FAMILY Act would also establish a maximum monthly benefit of
$4,000 and a minimum monthly benefit of $580. Both the monthly maximum and minimum
benefit amounts would be indexed to growth in average earnings in the economy, as measured by
the Social Security Administration’s average wage index (AWI).32
The FAMILY Act would pay for cash benefits by levying a tax on workers’ wages and self-
employment income, similar to the primary financing mechanism for OASI and DI.33 The act
would establish a 0.2% payroll tax on workers and employers, such that the combined tax rate
would be 0.4% on covered employment wages and self-employment income. As currently
written, the act appears to apply its payroll tax to wages above the taxable maximum ($137,700 in
2020) but not to self-employment income above the taxable maximum.34 However, it appears
from a letter sent to Representative DeLauro on January 28, 2020, by the SSA’s Office of the
Chief Actuary (OCACT) that OCACT’s interpretation is that the proposal’s payroll tax would not
be applied to wages above the taxable maximum for either category of worker. The letter states
the following: “Earnings covered under Social security but above this base [taxable maximum],
as wel as earnings not covered under Social Security program, would not be taxed.”35

28 Workers under the age of 31 may meet the recency-of-work requirement with fewer credits based on their age. For
more details on Social Security Disability Insurance, see CRS Report R44948, Social Security Disability Insurance
(SSDI) and Supplem ental Security Incom e (SSI): Eligibility, Benefits, and Financing .
29 As currently introduced, neither H.R. 1185 (February 13, 2019) nor S. 463 (February 12, 2019) stipulates a level of
income that would satisfy this requirement.
30 FAMILY Act benefits would, however, not be available to employees who use FMLA leave to care for a covered
military servicemember (including certain veterans) with a serious injury or illness that was sustained or aggravated in
the line of duty while on active duty. Persons who are already receiving an SSA-administered benefit (i.e., OASI, DI,
or SSI) would not be eligible for benefits under the FAMILY Act.
31 T he median net compensation for workers in 2018 was $32,838 (see https://www.ssa.gov/oact/cola/central.html).
T wo-thirds of a $33,000 annual income is $22,000, one-twelfth of which is $1,833.
32 SSA, OCACT , “National Average Wage Index,” at https://www.ssa.gov/oact/cola/AWI.html.
33 For more information on financing Social Security, see CRS Report RL33028, Social Security: The Trust Funds.
34 T he taxable maximum is the annual limit on which the Social Security payroll tax is applied to covered earnings.
Under current law, the taxable maximum is indexed to national average wage growth (using the AWI) for years in
which a cost -of-living adjustment is payable. SSA, OCACT , “ National Average Wage Index,” at https://www.ssa.gov/
oact/cola/AWI.html.
35 Letter from Stephen C. Goss, Chief Actuary, to Rep. Rosa DeLauro, January 28, 2020, at https://www.ssa.gov/
OACT /solvency/RDeLauro_20200128.pdf.
Congressional Research Service
11

Paid Family and Medical Leave: Current Law and Legislative Proposals

Benefits would be payable under the FAMILY Act indefinitely. That is, the program would not
require additional reauthorization.
The OCACT and Congressional Budget Office (CBO) have estimated that the combined 0.4%
payroll tax proposed in the FAMILY Act would not fully cover the cost of proposed paid family
and medical leave benefits.36 Estimates suggest that a combined payroll tax of 0.62% would be
necessary to raise enough revenue to finance proposed FAMILY Act benefits.37 Benefits could
also be financed using general fund revenue.
Proposals to Modify Existing Social Insurance Programs
The New Parents Act of 2019
The New Parents Act of 2019 (H.R. 1940) was introduced in the House by Representative Ann
Wagner. Its companion bil , S. 920, was introduced in the Senate by Senator Marco Rubio. The
New Parents Act would modify the current-law Social Security program to make it available to
new parents, through birth or adoption.38
To be eligible for benefits under the New Parents Act, a worker would need to have earned a
certain amount of credits or quarters of coverage (QCs). An eligible worker is one who has earned
at least 12 QCs at any time prior to application for paid family or medical leave benefits or one
who has earned at least 8 QCs, 4 of which were earned in the calendar year preceding the
qualifying birth or adoption.39 Under this first option, it would be possible for an applicant to be
eligible for benefits although not attached to the workforce at the time of application.
The New Parents Act would cover the arrival of a new child—through birth or adoption—as the
sole qualifying event for benefits. Given this, it is commonly referred to as a parental leave
program.40 While engaged in childcare, eligible parents could elect to receive one, two, or three
months of Social Security benefits. Benefit amounts would be calculated using the current-law
Social Security benefit formula as if the applicant had become disabled.41

36 See Letter from Stephen C. Goss, Chief Actuary, Social Security Administration, to Rosa DeLauro, Representative,
January 28, 2020, at https://www.ssa.gov/OACT /solvency/RDeLauro_20200128.pdf and Letter from Phillip L. Swagel,
Director, Congressional Budget Office, to Kevin Brady, Ranking Member, Committee on Ways and Means, February
13, 2020, at https://www.cbo.gov/system/files/2020-02/hr1185_2.pdf.
37 An expanded analysis estimates that a combined 0.4% payroll tax would finance about 64% of scheduled benefits.
See Letter from Stephen C. Goss, Chief Actuary, Social Security Administration, to Rep. Rosa DeLauro, January 28,
2020, at https://www.ssa.gov/OACT /solvency/RDeLauro_20200228.pdf. Using the budget scoring convention that
assumes benefits not payable under the FAMILY Act would be paid with additional transfers from the General Fund of
the U.S. T reasury, would result in an increase of the unified budget deficit and an increase in publicly held debt (see
T able 1b of OCACT cost estimates). However, under current law, such transfers from the general fund are prohibited
(see CRS Report RL33028, Social Security: The Trust Funds). Using a similar budget scoring mechanism, a CBO
estimate published on February 13, 2020, also concluded that the FAMILY Act would increase the unified budget
deficit.
38 Under the New Parents Act, multiple births (i.e., twins) would count as a single qualifying event. T he act does not
stipulate a similar standard for adoption.
39 At the time of application, the applicant must attest that his or her benefit would be used to finance spending time
with the child and away from employment.
40 T he New Parents Act would require that applicants attest the cash benefit would be used to finance time to be spent
with the new child and away from employment. Additionally, the new child m ust reside with the parent during the
benefit period.
41 Under the New Parents Act, benefits would be calculated as if the applicant had become disabled, although the
applicant need not be fully insured for Social Security Disability Insurance. For more in formation on the current-law
Congressional Research Service
12

Paid Family and Medical Leave: Current Law and Legislative Proposals

The New Parents Act would effectively al ow parents the option to temporarily access Social
Security benefits before the current-law retirement benefit eligibility age. In return, eligible
parents would need to elect one of the two methods the act uses to finance the benefits—(1)
accept an increase in their Social Security retirement age or (2) elect a future Social Security old-
age benefit offset—at the time of their application for the parental leave program.42 Under method
one, parents would elect to increase both their earliest eligibility age (EEA) and normal
retirement age (NRA) by about two months for each month of benefits taken.43 For instance, a
parent who received 3 months of cash benefits and who would otherwise be first entitled to Social
Security old-age benefits at age 62, would now be first entitled to benefits at age 62 and 6
months. Under method two, a parent would elect to have the first 60 months of Social Security
old-age benefits reduced by about 4.5 percentage points for each month of benefits taken. For
instance, an old-age worker retiring at NRA could expect to receive 100% of his or her benefits. 44
However, if that worker had taken 3 months of cash benefits under the New Parents Act, the
benefit would be reduced to about 86.5% of the original benefit for the first 60 months (a
reduction of 13.5%). Additional y, because eligible parents have the option of using this benefit
under the New Parents Act more than once, the ultimate old-age benefit reduction at the time of
EEA or NRA could surpass 13.5%; there is no set limit on how many times a new parent could
use this benefit. This old-age benefit reduction does not preclude other possible current-law
benefit reductions based on age or noncovered earnings.45
Payments under the New Parents Act would only be made if the trust funds ratio is greater than
20%. The trust funds ratio is a measure of the Old-Age, Survivors, and Disability Insurance
(OASDI) program’s actuarial status. The ratio is defined as the amount of reserves held in the
OASDI Trust Funds expressed as a percentage of annual program cost.46 Under the current
benefit schedule, OCACT projects the trust funds ratio to fal below 20% sometime in 2034.47
Thus, under current law and the projected schedule of benefits, the last year benefits would be

Social Security benefit formula, see CRS Report R43542, How Social Security Benefits Are Com puted: In Brief.
42 T he version of the New Parents Act introduced on March 27, 2019, does not specify the interaction of new parent
benefits and disability benefits. T hat is, it is unclear if use of the new parent benefit would increase the age (i.e., requi re
more credits or quarters over coverage) to qualify for Social Security disabilit y benefits.
43 Normal retirement age (NRA) is commonly referred to as full retirement age (FRA). Under the New Parents Act, the
Commissioner of the Social Security Administration would determine the number of months increase in EEA or NRA
required to offset the number of months of benefits taken under the act. In a letter to Sen . Rubio and Rep. Wagner,
OCACT estimated this would require two months increase in EEA or NRA for every month of benefits taken. Letter
from Stephen C. Goss, Chief Actuary, to Sen. Marco Rubio and Rep. Ann Wagner, April 9, 2019, at
https://www.ssa.gov/OACT /solvency/RubioWagner_20190409.pdf.
44 Similar to method one, the exact percentage point reduction in old-age benefits required to finance the cash benefits
would be set by the Commissioner of SSA; OCACT estimated the 4.5 percentage point per month of benefits taken in
its April 9, 2019, letter to Sen. Rubio and Rep. Wagner.
45 For information on adjustments to Social Security benefits based on age, see CRS Report R43542, How Social
Security Benefits Are Com puted: In Brief. For information on possible benefit reductions due to noncovered earnings,
see CRS Report 98-35, Social Security: The Windfall Elim ination Provision (WEP) .
46 According to the Social Security Board of T rustees, who manage the Social Security T rust Funds, a trust funds ratio
above 100% throughout the short -range period (10 years) indicates a financially healthy program, whereas a ratio
below 100% signals the program is in a financially inadequate position.
47 Letter from Stephen C. Goss, Chief Actuary, to Sen. Marco Rubio and Rep. Ann Wagner, April 9, 2019, at
https://www.ssa.gov/OACT /solvency/RubioWagner_20190409.pdf. T his projection aligns with the 2020 intermediate
assumptions used in the 2020 Board of T rustees annual report, see https://www.ssa.gov/OACT /T R/2020/lr4b4.html.
Congressional Research Service
13

Paid Family and Medical Leave: Current Law and Legislative Proposals

payable under the New Parents Act is estimated to be 2033. The OCACT has estimated that the
New Parents Act would have a negligible effect on the OASDI’s long-term actuarial status.48
The CRADLE Act
The Child Rearing and Development Leave Empowerment Act, or CRADLE Act, has yet to be
introduced. Draft language for the proposal can be found on Senator Mike Lee’s website.49 The
CRADLE Act is similar to the New Parents Act in that it would also modify current-law Social
Security, making it available to new birth or adoptive parents.50
The CRADLE Act is similar to the New Parents Act in many ways. The CRADLE Act’s
qualifying event is the arrival of a new child through birth or adoption, its possible benefit
duration is three months (applicants could also elect to receive one or two months of benefits),
and benefit amounts would be determined using the current-law Social Security DI benefit
formula.
The CRADLE Act differs from the New Parents Act with respect to eligibility conditions and the
total amount of benefits a parent could receive. Similar to other proposals that would be
administered by SSA, workers would become eligible for benefits under the CRADLE Act by
earning credits or quarters of coverage in Social Security-covered employment. To be eligible at
the time of application for CRADLE Act benefits, an applicant must have
 earned a total of 20 QCs, or
 earned 5 QCs in the 6 quarters preceding application, or
 earned 4 QCs in the calendar year preceding application.51
Additional y, whereas the FAMILY Act and New Parents Act would al ow parents to collect other
benefits (e.g., employer-provided paid family and medical leave benefits), the CRADLE Act
would specify a total amount of benefits payable under the act. That is, CRADLE Act benefits
would be reduced by the amount of state, local, and employer-provided benefits. If an applicant
were to receive other parental leave benefits, CRADLE Act benefits would be reduced such that a
parent’s total amount of benefits did not exceed 100% of his or her average indexed monthly
earnings (AIME).52

48 Under the New Parents Act, benefits would essentially be financed by the parent claiming benefits. Each beneficiary
would repay the trust funds through an increase in claiming age or a decrease in benefits. T hat is, the OASDI program
would experience, on a per parent basis, a higher cost in the short term (i.e., the new parent benefit for 1-3 months) and
experience an equal and offsetting lower cost in the long term (i.e., lower benefit payments at claiming age). As such,
OCACT estimates this bill would have a negligible effect on the long-term actuarial status of the OASDI program. See
Letter from Stephen C. Goss, Chief Actuary, So cial Security Administration, to Sen. Marco Rubio and Rep. Ann
Wagner, April 9, 2019, at https://www.ssa.gov/OACT /solvency/RubioWagner_20190409.pdf.
49 Sen. Mike Lee, “Sens. Ernst , Lee Put Forward Paid Parental Leave Plan T hat is Budget Neutral and Flexible for
Parents,” press release, March 12, 2019, at https://www.lee.senate.gov/public/index.cfm/2019/3/sens-ernst-lee-put-
forward-paid-parental-leave-plan-that-is-budget-neutral-and-flexible-for-parents.
50 Under the New Parents Act, multiple births (i.e., twins) would count as a single qualifying event. T he act does not
stipulate a similar standard for adoption. Additionally, persons who are already receiving an SSA -administered benefit
(i.e., OASI, DI, or SSI) would not be eligible for benefits under the CRADLE Act.
51 At the time of application, the applicant must attest that his or her employer has been notified of intent to take leave
from employment.
52 For more information on AIME, see CRS Report R43542, How Social Security Benefits Are Computed: In Brief. T he
AIME calculation uses a worker’s highest 35 years of career earnings. For workers with less than 35 years of earnings,
such as many disability beneficiaries, this may result in lower benefit amounts as zer os are used for years with no
earnings. Depending on the beneficiaries’ age, drop out years may apply; see CRS Report R43370, Social Security
Congressional Research Service
14

Paid Family and Medical Leave: Current Law and Legislative Proposals

Lastly, the CRADLE Act would provide for one method of benefit financing. The act would
require that parents who received the benefit would have their EEA or NRA increased by two
months for each month of benefits received.53 The CRADLE Act would also al ow eligible
parents to receive cash benefits multiple times; there would be no limit on how many times a new
parent could apply for this benefit.
The CRADLE Act would authorize payments through 2025.

Disability Insurance (SSDI): Becom ing Insured, Calculating Benefit Paym ents, and the Effect of Dropout Year
Provisions.
53 As currently written (the draft version release on March 12, 2019), the CRADLE Act would still require the increase
in EEA or NRA if the benefit amount was reduced due to a parent’s receipt of state, local, or employer-provided
benefits.
Congressional Research Service
15

link to page 20 link to page 20 link to page 21 link to page 21 link to page 21 link to page 21 link to page 21 link to page 21 link to page 21 link to page 21 link to page 21
Table 2. Family and Medical Leave: Entitlement Program Proposals

FAMILY Acta
New Parents Actb
CRADLE Actc
General Overview
Would create a new social insurance program
Would create an option within Social Security
Would create an option within Social Security
to provide cash benefits to individuals engaged
for cash benefits to individuals engaged in
for cash benefits to individuals engaged in
in qualified caregiving.
qualified childcare.
qualified childcare.
Effective Years
Applications for benefits could be submitted 18
Applications could be submitted after 2021.
Applications could be submitted after 2020.
months after enactment. No additional
Benefits would be projected to be paid until
Benefits payable after 2025 would require
reauthorization required.
2033.d
reauthorization.
Qualifying Event
Arrival and care of new child (birth, adoption,
Arrival and care of new child (birth or
Arrival and care of new child (birth or
or foster care), care of close family member or
adoption).
adoption).
self with a serious health condition, and certain
military family needs.
Eligibility
Applicants must be insured for Social Security
Applicants must have earned 12 quarters of
Applicants must have earned 20 QCs preceding
Disability Insurance (DI) and have received
coverage (QCs) at any time or 8 QCs of which
application or 5 QCs in the 6 quarters
income from employment during the past 12
4 were earned in the calendar year preceding
preceding application or 4 QCs in calendar year
months.e
birth or adoption.f
preceding application.f
Persons receiving Old-Age, Survivors Insurance

Persons receiving OASI, DI, or SSI as a result of
(OASI), Disability Insurance (DI), or
a disability are ineligible for benefits under the
Supplemental Security Income (SSI) as a result
CRADLE Act.
of a disability are ineligible for benefits under
the FAMILY Act.
Benefit Duration
Up to 60 days (limit 20 days per month) per
Up to three months. Applicants could also
Up to three months. Applicants could also
year.
elect to receive one or two months of benefits.
elect to receive one or two months of benefits.
Benefit Amount
On a prorated basis, the benefit amount would
Benefit amounts would be determined using
Benefit amounts would be determined using
equal two-thirds of the highest annual income
the Social Security benefit formula (i.e., benefits
the Social Security benefit formula (i.e., benefits
earned in the three-year period prior to
would be computed as if the worker was
would be computed as if the worker was
application. The act would establish a minimum
disabled).h
disabled).h
monthly benefit of $580 and a maximum
Benefits would be taxed according to adjusted
monthly benefit of $4,000, each indexed to the
thresholds for provisional income.i
national average wage index.g
CRS-16

link to page 20 link to page 20 link to page 21 link to page 21 link to page 21 link to page 21 link to page 22 link to page 22 link to page 22 link to page 22

FAMILY Acta
New Parents Actb
CRADLE Actc
Interaction with
Benefits under the FAMILY Act would be
Benefits under the New Parents Act do not
Benefits under the CRADLE Act could
Other Benefits
reduced by the amount of total or partial
replace or supersede any state benefits.
supplement state, local, or employer-provided
disability under a workmen’s compensation law
Applicants could also receive employer-
PFML benefits. Benefits under the CRADLE Act
and any unemployment benefits.j Applicants
provided PFML benefits. Receipt of employer-
would be reduced so as to not exceed 100% of
could also receive employer-provided paid
provided benefits would not change the
applicant’s average indexed monthly earnings.
family and medical leave (PFML) benefits with
amount of benefits under the New Parents Act.
However, the ful increase in retirement age
no change to FAMILY Act benefits.
would stil apply even if the CRADLE benefits
are reduced.
Job Protection
None beyond Family and Medical Leave Act
None beyond FMLA. Applicants not covered by None beyond FMLA. Applicants not covered by
(FMLA).k Applicants not covered by FMLA
FMLA would need employer approval for leave.
FMLA would need employer approval for leave.
would need employer approval for leave, and
may not be returned to the job held prior to
taking leave.
Employer Notice
The applicant must attest their employer has
The applicant must attest to use the benefit to
The applicant must attest that they have
or Return to
been notified of intent to take leave. Applicant
finance spending more time with child and away notified their employer of intent to take leave
Work
may not engage in “regular employment.”
from employment.
from employment.
Requirements
Financing
Benefits are financed by a 0.2% payrol tax paid
Recipients of benefit would elect to increase
Recipients of benefit would have their NRA
by both employer and employee (i.e., 0.4%
their Social Security normal retirement age
and EEA increased by 2 months for each month
total) on wages up to the taxable maximum.l
(NRA) and earliest eligibility age (EEA) by about of benefit received.m
2 months for each month of benefit received or
Negligible long-range effect on the OASDI
reduce their first 60 months of Social Security
Trust Fund.n
benefits by about 4.5% for each month of
benefit received.m
Negligible long-range effect on the OASDI
Trust Fund.n
Sources: H.R. 1185 (116th Congress), H.R. 1940 (116th Congress), and CRADLE Act bil text at https://www.lee.senate.gov/public/index.cfm/2019/3/sens-ernst-lee-put-
forward-paid-parental-leave-plan-that-is-budget-neutral-and-flexible-for-parents.
Notes:
a. The Family and Medical Insurance Leave Act (H.R. 1185), or the FAMILY Act, was introduced in the House by Representative DeLauro. Its companion bil , S. 463,
was introduced in the Senate by Senator Gil ibrand.
b. The New Parents Act of 2019 (H.R. 1940) was introduced in the House by Representative Wagner. Its companion bil , S. 920, was introduced in the Senate by
Senator Rubio.
CRS-17

c. The Child Rearing and Development Leave Empowerment Act, or CRADLE Act, has yet to be introduced. Draft language for the prop osal can be found on Senator
Lee’s website. See Senator Mike Lee, “Sens. Ernst, Lee Put Forward Paid Parental Leave Plan That is Budget Neutral and Flexible for Parents,” press release, March
12, 2019, at https://www.lee.senate.gov/public/index.cfm/2019/3/sens-ernst-lee-put-forward-paid-parental-leave-plan-that-is-budget-neutral-and-flexible-for-parents.
d. Applications for benefits under the New Parents Act could not be submitted if the OASDI trust fund ratio is less than 20%. The OASDI trust fund ratio is a measure
of the trust funds’ asset reserves at the beginning of the year divided by the projected total cost for the year (using the Board of Trustees’ in termediate
assumptions). According to the trustees, a trust funds ratio above 100% through the short-range period (10 years) indicates a financial y healthy program, whereas a
ratio below 100% signals the program is in a financial y inadequate position. According to the trustees’ intermediate assumptions, the trust fund ratio is projected to
fal below 20% in 2034 (see https://www.ssa.gov/OACT/solvency/RubioWagner_20190409.pdf). The projected year for a 20% OASDI trust fund ratio under the
2020 Board of Trustees intermediate assumptions is 2034, see https://www.ssa.gov/OACT/TR/2020/lr4b4.html.
e. To obtain DI insured status, a worker must be ful y insured for Social Security and must meet a recency of work requirement. To be ful y insured, workers must
have at least one quarter of coverage from paid employment or self-employment covered by Social Security for each calendar year after turning 21, up to the year in
which they became disabled. A quarter of coverage in 2020 is earned for each $1,410 in covered earnings, up to a maximum of 4 quarters of coverage per year (see
https://www.ssa.gov/oact/COLA/QC.html). The amount of earnings needed for a quarter of coverage each year is adjusted for growth in average, economy-wide
earnings. To meet the recency of work requirement, workers general y must have 20 quarters of coverage during the 40-quarter period prior to the onset of the
disability, which amounts to 5 years of covered employment in the 10-year period prior to disability onset. Young workers (under age 24, aged 24 to 31) must have
covered employment for half of the time between age 21 and when they became disabled. For additional information, see CRS Report R44948, Social Security
Disability Insurance (SSDI) and Supplemental Security Income (SSI): Eligibility, Benefits, and Financing.
f.
A quarter of coverage in 2020 is earned for each $1,410 in covered earnings, up to a maximum of 4 quarters of coverage per year. The amount of earnings needed
for a quarter of coverage each year is adjusted for growth in average, economy-wide earnings. See https://www.ssa.gov/oact/COLA/QC.html.
g. The national average wage index is the average of al workers’ wages subject to federal income taxes and contributions to deferred compensation plans. It is
calculated using some wages that are not subject to the Social Security payrol tax. See https://www.ssa.gov/oact/COLA/AWI.html.
h. For more information on how Social Security benefits are computed, see CRS Report R43542, How Social Security Benefits Are Computed: In Brief. Depending on a
worker’s age, dropout years may apply. For more information on the potential for dropout years, see CRS Report R43370, Social Security Disability Insurance (SSDI):
Becoming Insured, Calculating Benefit Payments, and the Effect of Dropout Year Provisions.
i.
The CRADLE Act would double the provisional income thresholds that determine tax liability for Social Security beneficiaries. For more information on provisional
income thresholds, see CRS Report RL32552, Social Security: Taxation of Benefits.
j.
Under the FAMILY Act, the Commissioner of Social Security would have the ability to issue regulations that would make certain state benefits deductible from the
benefits paid under the FAMILY Act.
k. Section 5(h)(1) of the FAMILY Act would make it “unlawful for any person to discharge or in any other manner discriminate against an individual because the
individual has applied for, indicated an intent to apply for, or received family and medical leave insurance benefits,” with provided remedies [Sec. 5(h)(2)(A)(i )]
including damages and “equitable relief as may be appropriate, including employment, reinstatement, and promotion .”
l.
In a letter from Stephen A. Goss, Chief Actuary, to Rep. DeLauro, OCACT interprets the proposed payrol tax as applying only to covered wage and self-
employment income. That is, no earnings above the contribution and benefits base would be taxed (see https://www.ssa.gov/OACT/solvency/
RDeLauro_20200228.pdf). However, as currently written, the FAMILY Act appears to apply its payrol tax to wages above the OASDI contribution and benefit base
but not to self-employment income above the contribution and benefit base. Because of the differences in interpretation of this provision, there may need to be
refinement of the proposal’s bil text. Funds necessary to administer benefits for the first three years of payments would be transferred from the General Fund of
the Treasury. Upon enactment, the newly established Federal Family and Medical Leave Insurance Trust Fund would reimburse the initial appropriation.
CRS-18

m. The New Parents Act would require the SSA’s Office of the Chief Actuary (OCACT) to estimate the number-of-months increase in NRA and EEA or percentage-
point benefit reduction necessary to finance the parental benefit. The CRADLE Act specifies the number-of-months increase in NRA and EEA to finance parental
benefits.
n. The New Parents Act and the CRADLE Act would essential y increase the short-range costs of the Social Security program (i.e., increased benefits for applicants)
while decreasing long-range costs (i.e., decreased benefits for applicants in future years). For more detail, see estimates of the financial effects for the respective
proposals at https://www.ssa.gov/OACT/solvency/RubioWagner_20190409.pdf and https://www.ssa.gov/OACT/solvency/LeeErnst_20190314.pdf.

CRS-19

link to page 6 link to page 4 link to page 4 link to page 23 link to page 24 link to page 24 Paid Family and Medical Leave: Current Law and Legislative Proposals

Paid Family and Medical Leave: Federal Workforce Proposal
The Federal Employee Paid Leave Act (FEPLA, H.R. 1534/S. 1174) proposes to make 12 weeks
of FMLA leave used in a 12-month period paid leave for most federal civil service employees.
The bil would also grant OPM the authority to extend paid FMLA leave to 16 weeks in the 12-
month period. Unlike the federal employees’ paid parental leave benefit, created by the FY2020
NDAA (see discussion of “Federal Employees” in the “Family and Medical Leave: Current
Federal Policies” section of this report), the paid leave proposed by FEPLA would be available
for al FMLA-qualifying uses of leave.54 The proposed paid FMLA leave would be in addition to
federal employees’ annual and sick leave entitlements. Also unlike the existing paid parental
leave benefit, FEPLA would not require federal employees to agree to return to their employing
agency after the conclusion of leave in order to use the proposed paid FMLA leave. FEPLA
summary information is provided in Table 3.
Table 3. Family and Medical Leave: Federal Workforce Proposal

Federal Employee Paid Leave Act (FEPLA)
General Overview
Would provide that 12 weeks of Family and Medical Leave Act (FMLA) leave in a 12-month
period is paid leave for most federal civil service employees.a
Covered Employees
Federal employees covered by FMLA provisions at 5 U.S.C., chapter 63, subchapter V.
Legislative branch employees covered by the Congressional Accountability Act of 1995
(CAA, P.L. 104-1, as amended), and Government Accountability Office (GAO) employees
(who are not covered by the CAA).
Transportation Security Administration (TSA) screeners.
Effective Years
FEPLA would take effect six months after its enactment.
Qualifying Event
The arrival of the employee’s child by birth, adoption, or foster care placement, and to
care for that child within the first 12 months after arrival (i.e., parental leave); to care for a
spouse, child, or parent with a serious health condition; the employee's own serious health
condition that renders the employee unable to perform the essential functions of his or her
job; and certain military family needs.b
Eligibility
In general, 12 months of service preceding leave. Legislative branch employees covered by
the CAA and GAO employees must have been employed for 12 months in any employing
office covered by the CAA or by the GAO, respectively, and for at least 1,250 hours
during the 12 months preceding leave, unless the hours-of-service requirement is waived in
rules or regulations governing the legislative branch agency’s personnel management
system.
Benefit Duration
Up to 12 weeks of paid FMLA leave in a 12-month period. The Office of Personnel
Management (OPM) would have authority to issue regulations to increase the benefit
duration to 16 weeks in the 12-month period.
Benefit Amount
Employee’s regular pay rate.
Interaction with
The employee’s group health insurance coverage is maintained during paid FMLA leave on
Other Benefits
the same terms as if he or she had continued to work.
Job Protection
In general, yes, because the paid leave is FMLA leave, which is job protected.

54 T he version of the NDAA bill that was engrossed by amendment in the House of Representatives on September 17,
2019, would have provided paid leave to federal employees for all FMLA-qualifying needs for leave. T he narrowing of
the entitlement to paid parental leave for federal employees was the result of a House amendment, recommended by the
committee of conference, filed on December 9, 2019, agreed to in the House on December 11, 2019, and agreed to in
the Senate on December 17, 2019.
Congressional Research Service
20

link to page 28 Paid Family and Medical Leave: Current Law and Legislative Proposals

Federal Employee Paid Leave Act (FEPLA)
Employer Notice or
No employer notice or return to work requirements beyond what is required by FMLA.
Return to Work
Requirements
Financing
Payable from any appropriation or funds available for salaries or expenses within the
employing agency.
Source: CRS analysis of H.R. 1534/S. 1174, 116th Congress, the Federal Employee Paid Leave Act.
Notes:
a. The employer determines how the 12-month period is calculated (e.g., calendar year, fiscal year, 12 months
starting on the first day of leave).
b. Under FMLA, a child refers to a biological, adopted, or foster child, a stepchild, a legal ward, or a child of a
person standing in loco parentis, who is under 18 years of age; or an individual 18 years of age or older and
incapable of self-care because of a mental or physical disability. The term “serious health condition” means
an il ness, injury, impairment, or physical or mental condition that involves inpatient care in a hospital,
hospice, or residential medical care facility; or continuing treatment by a health care provider. Eligible
employees may use FMLA-protected leave for a qualified military exigency arising from the covered active-
duty status of a covered military member who is the employee’s spouse, child, or parent, and to care for a
covered military servicemember (including certain veterans) with a serious injury or il ness that was
sustained or aggravated in the line of duty while on active duty, if the eligible employee is the covered
servicemember’s spouse, child, parent, or next of kin.
Tax Policy Proposals to Support Paid Family and Medical Leave
Several tax policy proposals would either provide temporary tax savings, or create a tax incentive
for private savings, to support parental or medical leave taking. These policies general y do not
guarantee access to leave. Instead, they aim to reduce the financial burden associated with
individuals’ leave taking. These proposals are summarized in Table 4.
Advancing Support for Working Families Act
The Advancing Support for Working Families Act (S. 2976, H.R. 5296) is not explicitly linked to
leave taking following the birth of a child.55 Instead, this policy would effectively al ow taxpayers
to reduce their tax liability (which for many means an increased tax refund) upon the arrival of a
child, with these funds being repaid through an increase in individual income tax liability over
time.
The Advancing Support for Working Families Act would al ow taxpayers to elect to receive up to
$5,000 following the birth or adoption of a child, in the form of an increased child tax credit
(CTC).56 Taxpayers could elect to claim this increased credit on their prior year’s tax return.
Al owing taxpayers to claim the credit on their prior year’s return would accelerate receipt of this
benefit. Taxpayers having multiple children can make this election following the birth or adoption
of each child.
If a taxpayer elects to receive an increased CTC, the additional amount received would general y
be paid back, in the form of higher taxes, over a 10-year period. The payback period would begin
in the year in which the child for whom the benefit was received was born or adopted. Special

55 T he sponsors of the Advancing Support for Working Families Act have characterized the bill as a parental leave
plan. See https://www.sinema.senate.gov/parentalleave.
56 For more information, see CRS In Focus IF11077, The Child Tax Credit, by Margot L. Crandall-Hollick.
Congressional Research Service
21

Paid Family and Medical Leave: Current Law and Legislative Proposals

rules would provide a longer payback period for certain low-income taxpayers. Payback could
also be deferred for taxpayers whose earned income decreases by more than 20%.
The Working Parents Flexibility Act of 2019
The Working Parents Flexibility Act of 2019 (H.R. 1859) would create a tax-advantaged parental
leave savings account. Individuals with employment earnings would be al owed a tax deduction
for contributions of up to $6,750 per year to a parental leave savings account. Total contributions
would be limited to $24,000. Both of these amounts would be adjusted for inflation. No deduction
would be al owed for taxpayers with adjusted gross income (AGI) above $250,000; this limit
applies to al tax filing statuses (e.g., single, joint, and head of household filers).
Employers can also make contributions to an individual’s parental leave savings account.
Employer contributions to parental leave savings accounts would not be taxable to the employee,
up to the contribution limits. The amount an individual can deduct for parental leave savings
account contributions would be reduced by the amount of employer contributions that are
excluded from income.
Distributions from a parental leave savings account made not later than one year after the birth or
adoption of a child would be excluded from income, and thus not subject to tax. Taxpayers can
take tax-free distributions following the birth or adoption of each child. However, the annual
contribution limit ($6,750) and total contribution limit ($24,000) are per-taxpayer limits, and do
not depend on the number of children a taxpayer has. Distributions not taken for early parenthood
purposes would be taxable and subject to a 20% penalty, with exceptions as noted below.
In addition to contributions being tax deductible and qualifying distributions being tax exempt,
parental leave savings accounts would also be exempt from tax. Thus, income earned on savings
within a parental leave savings account would not be subject to tax.
If savings in a parental leave savings account were not withdrawn as early parenthood payments,
they could be transferred without penalty to other tax-advantaged savings accounts. Specifical y,
parental leave savings account savings could be rolled over tax free to qualified retirement
savings accounts,57 529 plans,58 or qualified ABLE programs.59
The Freedom for Families Act
The Freedom for Families Act (H.R. 2163) would al ow taxpayers to use health savings accounts
(HSAs) to self-finance periods of family or medical leave. Currently, HSAs are available for
individuals covered under a high-deductible health plan.60 Individuals able to contribute to HSAs
are subject to annual contribution limits of $2,250 for individuals with self-only coverage and
$4,500 for individuals with family coverage. These limits are adjusted for inflation. For 2020,
these limits are $3,550 and $7,100, respectively.
HSAs have several tax advantages. First, individual contributions are general y tax deductible.
Second, employer contributions (and pretax salary reductions) are excluded from taxable income

57 Eligible retirement plans include individual retirement accounts (IRAs), individual retirement annuities, and other
eligible retirement plans described in IRC §402(c)(8)(B). For more information on IRAs, see CRS Report RL34397,
Traditional and Roth Individual Retirem ent Accounts (IRAs): A Prim er, by Elizabeth A. Myers.
58 For more information, see CRS Report R42807, Tax-Preferred College Savings Plans: An Introduction to 529 Plans,
by Margot L. Crandall-Hollick.
59 For more information, see CRS In Focus IF10363, Achieving a Better Life Experience (ABLE) Programs, by William
R. Morton and Kirsten J. Colello.
60 For more information, see CRS Report R45277, Health Savings Accounts (HSAs), by Ryan J. Rosso.
Congressional Research Service
22

Paid Family and Medical Leave: Current Law and Legislative Proposals

and from Social Security, Medicare, and unemployment insurance taxes. Third, withdrawals are
not taxed if used for qualified medical expenses. Final y, account earnings are exempt from tax.
Withdrawals that are not used for qualified medical expenses must be included in income and are
subject to tax. Additional y, for individuals under age 65, nonqualified withdrawals are subject to
a 20% penalty. The penalty is waived in cases of disability or death and for individuals aged 65
and older.
The Freedom for Families Act would modify HSAs, al owing these tax-advantaged savings
vehicles to be used to save for periods of qualified caregiving. A period of qualified caregiving is
one during which an individual is on leave or not employed because of the arrival or adoption of a
child; due to their own or a family member’s serious health condition; or because of certain
military family needs. The proposal would waive the HSA requirement that individuals be
covered by a high-deductible health plan. Additional y, the proposal would increase the annual
contribution limit to $9,000 for individuals ($18,000 for married couples filing a joint return).
The Support Working Families Act
The Supporting Working Families Act (S. 2437) would al ow taxpayers the option of receiving a
refundable parental leave tax credit. The tax credit could be claimed for weeks of leave taken
during a one-year period following the birth or adoption of a child. This tax credit would later be
repaid through increased taxes during a future recapture period.
The tax credit is the lesser of (1) a calculation based on the taxpayer’s past average weekly wages
or (2) $6,000.61 To determine the tax credit amount, individuals would elect a replacement
percentage equal to 40% to 90%. This replacement percentage would be multiplied by the
taxpayer’s average weekly wage, with this product then multiplied by the number of weeks of
parental leave taken. For the purposes of the tax credit, parental leave weeks taken must be at
least 4 but no more than 12.62 The parental leave tax credit is limited to $6,000 per year.
The tax credit is refundable, and can also be carried back and claimed on the previous year’s tax
return. Because it is refundable, if the amount of the tax credit exceeds a taxpayer’s tax liability,
the excess is received as a refund (payment) from the Treasury. The carryback provision al ows
taxpayers to claim the tax credit for the previous tax year by filing an amended return. Al owing
this carryback could accelerate receipt of the tax credit, and the legislation would require “a
separate and expedited process for reviewing and processing” amended returns filed for the
purposes of claiming the parental leave tax credit.
There are employment requirements for parental leave tax credit eligibility. Specifical y, to be
eligible for the credit, an individual must have been employed for at least 52 of the 64 weeks
before taking credit-eligible leave. During those 52 weeks, the taxpayer must have worked at least
1,000 hours.
To claim the credit, taxpayers must attest that they have provided their employer with written
notice of their leave taking and wil be taking leave each week used in the calculation of the
amount of the parental leave tax credit. Additional y, as noted above, the individual must take at
least 4 weeks of leave to be able to claim the tax credit.

61 T he $6,000 credit maximum would be adjusted for inflation.
62 T he following example illustrates how this credit may be calculated for a hypothetical taxpayer. Assume a taxpayer
has an average weekly wage rate of $800. Also assume that this taxpayer elects the maximum replacement percentage
of 90%. If this taxpayer claims the tax credit for 8 weeks of leave, the taxpayer would receive a tax credit of $5,760.
Congressional Research Service
23

Paid Family and Medical Leave: Current Law and Legislative Proposals

The credit could not be claimed for any paid leave that was government- or employer-provided.
Additional y, there would be limits on claiming this tax benefit for individuals rec eiving
disability, workman’s compensation, or unemployment payments.
The credit would be recaptured (repaid) over a five-year period beginning four years after an
individual elects to receive a parental leave tax credit, although earlier repayment would be
al owed.

Congressional Research Service
24

link to page 29 link to page 29 link to page 29 link to page 29 link to page 29 link to page 29
Table 4. Family and Medical Leave: Tax Policy Proposals
Advancing Support for
The Working Parents
The Freedom for Families
The Support Working

Working Families Acta
Flexibility Act of 2019b
Actc
Families Actd
General Overview
Would al ow taxpayers to elect
Would provide tax-advantaged
Would expand health savings
Would provide a refundable
to receive up to $5,000 of the
parental leave savings accounts.
accounts (HSAs) for family or
parental leave tax credit.
child tax credit in the year of the
medical leave.
child’s birth or adoption.
Effective Years
Effective starting in 2020.
Effective starting in 2020.
Date of enactment.
Effective starting in 2020.
Qualifying Event
Arrival of a new child (birth or
Distributions from a parental
Distributions from an HSA
Arrival of a new child (birth or
adoption).
leave savings account would be
would be al owed for periods of
adoption).
al owed for one year fol owing
qualified caregiving. Qualified
the arrival of a new child (birth
caregiving leave periods are
or adoption).
those described in FMLA.
Eligibility
Taxpayers could make election.
Individuals could withdraw from
Individuals could withdraw from
Taxpayer could elect to receive
A taxpayer can be an individual
a parental leave savings account
HSA while taking qualified
a parental leave tax credit for
or a married couple. Child must
for one year fol owing the arrival
caregiving leave.
periods of parental leave.
have or qualify for a Social
of a new child (birth or
Taxpayer and child must have
Security number.e Taxpayer
adoption).
Social Security numbers.f
does not need to take leave
from work to claim the benefit.
Benefit Duration
Not applicable. Electing to
Not applicable. Accessing
The ability to take a qualified
Tax credit is calculated on 4-12
receive the tax credit is not
parental leave savings account
caregiving distribution is
weeks of leave taking.
directly connected with leave
funds is not directly connected
contingent on qualified caregiving
taking.
with leave taking.
leave.
Benefit Amount
Election to increase, by up to
Individuals would be able to
Taxpayers would be able to
Election to receive tax credit, up
$5,000, the child tax credit
contribute up to $6,750 per
contribute up to $9,000 per year
to $6,000. If the taxpayer makes
fol owing the arrival of a new
year, subject to a $24,000
($18,000 for joint filers) to
the election, future tax liability is
child. If the taxpayer makes the
maximum contribution amount.
HSAs.
increased such that the
election, future tax liability is
The amount withdrawn during
The amount withdrawn during a
additional credit is repaid. For
increased such that the
an early parenthood period
period of qualified caregiving
taxpayers with multiple children,
additional credit is repaid. For
would be decided by the
would be decided by the
election can be made fol owing
taxpayers with multiple children,
taxpayer, based on available
taxpayer, based on available
the birth or adoption of each
election can be made fol owing
savings.
savings.
child.
the birth or adoption of each
child.
CRS-25

link to page 29 link to page 29 link to page 29 link to page 29 link to page 30 link to page 30
Advancing Support for
The Working Parents
The Freedom for Families
The Support Working

Working Families Acta
Flexibility Act of 2019b
Actc
Families Actd
Interaction with Other
None.g
None.h
None.
Tax credit reduced by the
Benefits
amount of workman’s
compensation or unemployment
benefits received during the
parental leave period. Tax credit
disal owed if the individual is
entitled to disability benefits.
Job Protection
None beyond the Family and
None beyond FMLA.
None beyond FMLA.
FMLA plus antidiscrimination
Medical Leave Act (FMLA).
provision for taxpayers claiming
credit.
Employer Notice or
None. Benefit not connected to
None. Benefit not connected to
FMLA continues to govern leave
Taxpayers must attest that they
Return to Work
leave taking.
leave taking.
taking.
have provided their employers
Requirements
with written notice of their
intent to take parental leave.
Financing
Would reduce federal income
Would reduce federal income
Would reduce federal income
Would reduce federal income
tax revenue. Cost estimate not
tax revenue. Cost estimate not
tax revenue. Cost estimate not
tax revenue. Cost estimate not
available.
available.
available.
available.
Reduction in federal income tax

Reduction in federal income tax
revenue is expected to be
revenue is expected to be
limited. For a taxpayer, the
limited. For a taxpayer, electing
elected one-time increase in the
to receive a parental leave tax
child tax credit results in
credit results in additional tax
additional tax liability in future
liability in future years.
years.
Sources: CRS analysis of S. 2976/H.R. 5296, H.R. 1859, H.R. 2163, and S. 2437, 116th Congress.
Notes:
a. The Advancing Support for Working Families Act (S. 2976) was introduced in the Senate by Senator Cassidy. Its companion bil , H.R. 5296, was introduced in the
House by Representative Al red.
b. The Working Parents Flexibility Act of 2019 (H.R. 1859) was introduced in the House by Representative Katko.
c. The Freedom for Families Act (H.R. 2163) was introduced in the House by Representative Biggs.
d. The Supporting Working Families Act (S. 2437) was introduced in the Senate by Senator Young.
e. The adoption taxpayer identification number can be provided in the case of adopted children.
f.
Social Security numbers may be provided at a later date if not available when a taxpayers files for the credit. Exceptions may be provided for religious objections.
CRS-26

g. Under IRC Section 6409, any refund (including refunds from refundable tax credits) cannot be counted as income in determining eligibility for, or the amount of, any
federal y funded public benefit program.
h. No deduction would be al owed for amounts taken into account for determining the child care tax credit. For background, see CRS Report R44993, Child and
Dependent Care Tax Benefits: How They Work and Who Receives Them, by Margot L. Crandal -Hol ick, Child and Dependent Care Tax Benefits: How They Work and
Who Receives Them, by Margot L. Crandal -Hol ick.

CRS-27

Paid Family and Medical Leave: Current Law and Legislative Proposals

Author Information

Molly F. Sherlock
Sarah A. Donovan
Specialist in Public Finance
Specialist in Labor Policy

Barry F. Huston

Analyst in Social Policy

Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan
shared staff to congressional committees and Members of Congress. It operates solely at the behest of and
under the direction of Congress. Information in a CRS Report should n ot be relied upon for purposes other
than public understanding of information that has been provided by CRS to Members of Congress in
connection with CRS’s institutional role. CRS Reports, as a work of the United States Government, are not
subject to copyright protection in the United States. Any CRS Report may be reproduced and distributed in
its entirety without permission from CRS. However, as a CRS Report may include copyrighted images or
material from a third party, you may need to obtain the permission of the copyright holder if you wish to
copy or otherwise use copyrighted material.

Congressional Research Service
R46390 · VERSION 1 · NEW
28