Don’t Take an Unpaid Leave, Take a Paid Medical Leave Instead
A few weeks ago my friend from Boston called. During COVID we lost touch. He told me he had taken 2 months off from work due to depression and recently returned to work. It was an unpaid leave.
“Were you seeing a therapist or medical doctor?” I asked, a tad private, but I couldn’t resist.
“Yes, I was,” Kevin responded. “I was so depressed, with COVID and all.”
“Why didn’t you take a medical leave?”
“My company allows us to take personal leaves. I didn’t think there would be any difference.”
“Massachusetts has Paid Family Medical Leave.”
“Paid? How much?”
“Around 80% of your wage. Less for high earners. Your state has an online calculator to help you estimate the benefit amount.”
“Would that law protect my job too?”
“Yes, it would. This law protects both income and job. For up to 20 weeks in Massachusetts. More than enough to cover your 2 months.”
“And my health insurance?”
“Protected.”
“Wow. I wish I had taken the medical leave. I really struggled without income. Living is so expensive, with inflation and all.”
Paid Family Medical Leave
Paid Family Medical Leave (PFML) is a new type of state laws that protect seriously ill workers. Five jurisdictions have PFMLs: District of Columbia, Connecticut, Massachusetts, Oregon and State of Washington.
Except D.C. and CT, PFMLs provide both income and job protections. Yes, it is a big deal. Prior to PFML, federal and state laws only protect one or the other. The Family Medical Leave Act (FMLA) protects your job but not income. State Disability benefits protect income but not your job. Most workers must apply for the two protections separately. But with most PFMLs, you apply for both within the same process (but confirm the application process with your employer!)
Below is a chart comparing their benefits.
*Oregon is collecting PFML tax in 2022 and will pay benefits in 2023.
The Benefit Amount is a percentage of the ill worker’s wage. The chart above simplifies and estimates the Benefit Amount. It roughly shows what the PFMLs can pay. The real formulae for calculating the Benefit Amounts are more complicated (Sorry, they won’t fit in the above boxes). You can find the formulae in the PFML websites:
CT; Their online calculator here.
MA; Their online calculator here.
WA; Their online calculator here.
Notice the percentage of the Benefit Amount decreases as wage increases. Overall, higher earners will receive a smaller percentage of their wage. This is to better protect lower earners and their families.
Benefit Amounts are capped at the “Maximum Weekly Benefit” rate. For example, in the State of Washington, the Maximum Weekly Benefit is $1,327. Even if you make a million dollars a year, your PFML benefit is still limited to $1,327 per week.
State Disability vs. PFML
In many ways, PFMLs are better than State Disability. Unlike State Disability, disability isn’t required to qualify for PFMLs. They just require a “serious illness.”
Also, PFMLs mirror the federal FMLA by covering workers who want to take leave to care for their loved ones. State Disability doesn’t cover that. Workers have to apply under a separate State family leave program, if available.
Also, the PFMLs generally pay better than State Disability.
However, PFMLs don’t last as long as State Disability. The longest PFML (from MA) only lasts 20 weeks. Most only last 12 weeks. On the other hand, State Disability usually lasts 26 weeks. State Disability in California can last up to 52 weeks! Below is a chart the compares the maximum benefit periods, from longest to shortest.
Final Thoughts
Due to the Maximum Weekly Benefit limit, income from PFML may not be enough for high earners. High earners should consider Employer Sponsored Short Term Disability Insurance (STDI) for additional income protections. Individual policy (i.e. purchased directly from an insurance company) is another option.
The average elimination period of Employer Sponsored Long Term Disability Insurance (LTDI) is 26 weeks. During the elimination period, the LTDI doesn’t pay any benefit. Since PFMLs cannot last 26 weeks, disabled workers without STDI should expect a gap of income.
While PFMLs are less effective for high earners and workers with long term disability, they are still great benefits. Ill workers should use them.
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