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The Trump Effect and Business: Paid Time Off

Compliance
Video
08/10/2017
 

The topics of sick leave, family leave, and paid time off have been making headlines recently, which is why it's important that employers take a close look at their time off policies. Tammy Tyler, senior compliance analyst at Paychex, and small business influencer Gene Marks identify some of the legislation that is currently impacting or could impact businesses.

More in this employment law series: Time off and overtime rules

Full transcript:

Gene Marks: Hi, everybody. My name is Gene Marks. I write every day for The Washington Post and a bunch of other places online, every week. I'm here with Tammy Tyler who is the senior compliance analyst at Paychex. Our conversation today is all about paid time off. A topic, Tammy, near and dear to the hearts of the millennial generation, right?

Tammy Tyler: I'm sure, yes.

GM: Yeah, those people that are 18 to 34 years old in survey after survey, report after report this generation, which represents 50% of the workforce according to who you're talking about or somewhere around there, this generation wants more flexibility, wants more mobility, wants paid time off. So companies are responding to this, right? I mean Netflix, for example, they offer a year's paid time off to new parents. Hilton Hotels I've been reading offers, like, 10 weeks of paid time off to hourly workers. My favorite is CarMax, the company that you can buy cars from, their paid time off – you can check me on this – is if you work at CarMax you sit down with your supervisor at the end of each year and together you determine your paid time off for the following year.

TT: Lovely.

GM: You know, like, I've got the sniffles and a bit of a headache. I'm thinking four months, right? This is what some companies are trying to respond to paid time off and how to deal with this. But it's not just companies, there is a lot of local and national regulation for paid time off. Tammy, do you think we will have a national paid time off policy sometime during President Trump's administration?

TT: Definitely uncertain, Gene. The proposal that he put forward in his budget does not seem very popular with both sides of the aisle there.

GM: Why not?

TT: I think a couple of things, right? Certainly there's the opponents who feel that it's really too short of a time, six weeks for a parental leave. Doesn't even match up with our federal Family Medical Leave Act, which offers 12 weeks, although unpaid.

GM: I thought it would be, would it be in addition to the federal? See, he was proposing six weeks of paid time off for parents, right?

TT: Right. Parents or adoptive parents.

GM: Parents or adoptive parents. But it would not be, so that's not even in addition to the federal.

TT: It would run concurrently.

GM: It would run concurrently.

TT: And certainly the FMLA is available for many other reasons, not just that.

GM: Sure.

TT: But it would run concurrently. It's going to be financed, according to him funded through the unemployment assistance, which means while we would call it federal, the states will have the flexibility to set up their own plans.

GM: I see.

TT: So they will probably still be different per state if this were to move forward.

GM: And from what I understand the states and the federal government have lots and lots of extra resources.

TT: That's right. They've got cash all over the place, Gene.

GM: Right.

TT: Yeah, so I think there's uncertainty to be kind, a lot of doubt there whether we could get something that looks like that. There's been other bills that have been proposed in Congress that are more in line with the FMLA, more in line with having – being funded by employees and employers, as opposed to the government. So we'll see. We'll see where that goes.

GM: How about on the state level? Are any states doing anything in particular, or cities, regions?

TT: Absolutely both, right? Because there isn't a lot happening at the federal level. The states are very active. And as you say, local jurisdictions equally as active, both in the paid sick leave space and now we're starting to see an uptick in the paid family leave space.

GM: Interesting. If you were an employee and you had the flexibility to take a job in any state in the country, what states have great policies?

TT: Right, and the answer always to an employee being asked that –

GM: I'm going to guess California.

TT: Is California, right?

GM: I had a feeling. It's usually California, right?

TT: Right, but the state leaves and the other states are really good, too. The complexity for employers of course is where they overlap, where they've got a state and a local jurisdiction that they need to comply with.

GM: Right. So, Tammy, if you were running your own company now or you were an HR manager at a company and you're trying to put together a paid time off policy, what do you think would be competitive in 2017?

TT: Well, I think again, first I need to look at the state and local laws to see what I have to do. So there's likely – but there's 45 paid sick leave laws. There's about half a dozen paid family leave laws. So it's likely that you're going to be impacted by that. We still have a lot of employers who are interested in doing a paid time off policy, which encompasses their vacation as well as their personal, sick time and just kind of lump it all together. That's feasible in any of these jurisdictions. But I would say in California especially, when you do that you may need to put in some extra provisions that you wouldn't have to for your vacation in order to meet the sick leave laws.

GM: Fair enough. Right. Are you a fan of unlimited paid time off? And I have to sneak that in because some companies are trying that.

TT: No, I think that can work. I really do. I think it probably depends on which level of employees you're giving that to. I know I don't take very much vacation even though I have it, but I think it can be successful. I really do.

GM: That's great. Well great. So again, my takeaways is there are a lot of changes, most likely not at the national level yet, although some different proposals have been, are floating around there. But certainly at the state and regional level there are lots of paid time off regulations, so if you're going to be addressing that for your company, you want to take those into consideration.

TT: Exactly.

GM: Great. Tammy, thank you very much. This was really helpful.

TT: Thanks, Gene.

This website contains articles posted for informational and educational value. Paychex is not responsible for information contained within any of these materials. Any opinions expressed within materials are not necessarily the opinion of, or supported by, Paychex. The information in these materials should not be considered legal or accounting advice, and it should not substitute for legal, accounting, and other professional advice where the facts and circumstances warrant.
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