News & Announcements
Is Paid Family Leave in Hawaii’s Future?
While it is unknown whether paid family leave will be in our near future, what is certain is that paid family leave will be a hot topic of discussion at the Legislature in 2020. Sure to be included in the discussion is the paid family leave report prepared for the State of Hawaii’s Legislative Reference Bureau on November 13, 2019. The report entitled, Paid Family Leave Program Impact Study, was drafted by Spring Consulting Group, an Alera Group Company, LLC pursuant to Act 109, Session Laws of Hawaii 2018.
Recognizing the challenges employers face in coordinating multiple paid leave laws, the report recommended the State consider numerous issues, including the following, when deciding how to implement paid family leave in Hawaii:
- Clear regulation
- Straightforward administration
- Comprehensive education
- Permitting paid family/medical leave to run concurrently with unpaid FMLA
- Considering a simplified benefit formula
- Aligning the definition of salary with that of disability or workers’ compensation
- Avoiding Employee Retirement Income Security Act (ERISA) status
- Advocating for return to work within the law, but excluding job protection (as it is accounted for elsewhere)
- Providing gender neutral covered relationships and leave lengths
- Sunsetting existing unpaid leave laws (to start fresh with any new law)
- Allowing for at least two, but ideally three years, to implement the new program
The analysis focused on seven states that had enacted their own paid family and medical leave laws at the time the report was requested: California, District of Columbia, Massachusetts, New Jersey, New York, Rhode Island, and Washington. The seven states did not have a uniform approach in creating their respective laws. Rather, their approaches were quite varied, including with regard to the following factors:
- Structure – Two states use an exclusive state fund, though others permit insurance (fully insured or self-insured) as an alternative to a state-administered plan.
- Employer size – Some laws apply to all employers, and others apply only to employers with more than 50 employees. The report noted that since the incidence/loss ratios tend to be lower for small employers, small employers would subsidize large employers if employers of all sizes were required to contribute to the funding pool. However, insurers would experience higher administrative costs for small employers as compared to large employers, though these higher costs could be passed onto small employers in their premiums.
- Permissible reasons for leave – This includes bonding with new child and care for family members.
- Job protection – Some states provide job protection, but others do not.
- Benefit formula – Four states use a progressive benefit structure (where employees with lower wages receive higher benefits) and three states use a flat percentage of average weekly wages.
- Duration of benefits – Claimants can receive benefits for as short as four weeks to as long as twenty-six weeks.
- Claim filing – Online filing was common, in addition to traditional options (e.g., mail, fax, and service center).
- Speed of benefit payments – How long it took payment to be issued to the claimants ranged from two days to three-to-four weeks.
- Financial contributions - Four states’ plans were funded solely by employees, two states required both employees and employers to contribute to the fund, and one jurisdiction only employers to fund the plan.
 In addition to these seven states, two states – Connecticut and Oregon – passed paid leave laws after the request for the report and thus were considered outside the scope of the analysis.