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Paid family leave from Social Security funds

Employees would have the option of getting paid now or later

Posted August 8, 2018

On August 2, Senator Marco Rubio and Representative Ann Wagner unveiled the Economic Security for New Parents Act (S 3345), a bill with a new tactic on funding national paid family leave. Under the measure, new parents would have the option to pull forward a portion of their Social Security benefits to use for paid parental leave after the birth or adoption of a child.

Some of the more salient points of the measure include the following:

  • Parents taking the option would receive a Social Security benefit to use for at least two months of leave across their household.
  • The benefit amount would be large enough that nearly all parents making below median family income of about $70,000 would be able to take two months leave at over 70 percent of their wages.
  • Many parents, especially those with low incomes, would be able to finance longer than three months of leave with the amount of the benefit.
  • Two-parent households would be able to transfer their benefit to their spouse. For example, one parent could use the benefit for two weeks of leave, while the other uses their individual benefit and the other parent’s benefit for at least six weeks.
  • “Stay-at-home” parents with an earnings history that meets eligibility requirements will also be able to take the option.
  • Parents taking the option will delay the date at which they begin receiving Social Security retirement benefits by about three to six months per benefit taken, as determined by the Social Security Administration (SSA) each year.

Here’s how it is expected to work:

  • Expecting parents will file an application with SSA. Upon verification of the parent’s eligibility, SSA will notify parents of their expected eligibility for the parental leave benefit.
  • After the birth or adoption of the child, approved parents will provide SSA with additional documentation, and upon verification SSA will remit the parental leave benefit.
  • The benefit will be delivered in two monthly payments of equivalent size.

To ensure that any eligible parent (or both eligible parents) claiming a benefit takes leave from employment for a period of not less than the required number of months, the SSA may take steps, including directly contacting the employer of the parent.

As currently written, no benefits would be paid after December 31, 2023.

While employers may have little interaction under this plan, they would likely be expected to keep accurate records of employee work schedules.

This article was written by Darlene M. Clabault, SHRM-CP, PHR, CLMS, of J. J. Keller & Associates, Inc.

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