Paid Leave

As labor markets tighten, employers are competing for highly skilled workers by trying to make it easier for them to do their jobs and also have families.  At every income level, a lack of family-friendly benefits has led to declining labor force participation. Working parents, especially women, struggle to combine the responsibilities of work and parenthood. By focusing on family-friendly benefits, companies are catching up to the fact that family life in the United States has changed dramatically in the last generation. The effects of low unemployment are even reaching companies that traditionally rely on low-wage workers. It's a telling sign of employee demand and the competitive job market that companies are offering increased paid leave to hourly employees in addition to salaried ones.  

Section 45S of the updated tax code provides a tax credit to employers that offer up to 12 weeks of paid family and medical leave annuallyThe credit has encouraged several large employers to expand paid leave benefits.To claim the tax credit, the benefit must be at least 50% of an employee’s normal pay. The base amount of the tax credit is 12.5% and it increases incrementally, up to a maximum of 25%, as the percentage of an employee's normal pay increases. A qualifying employee is defined as an individual who has been employed by the company for at least 1 year, and who is paid no more than 60% of the highest compensated employee on an annual basis. A written policy must be in place specifying the benefit amount (i.e. 50% of normal pay), and providing full-time employees at least two weeks of paid leave (annually) and part-time employees a proportionate amount based on annual expected work hours.