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2017-069 Paid Parental Leave ResearchDate: September 22, 2017 Report No. 2017-069 Page 1 of 7 INFORMAL STAFF REPORT TO MAYOR AND CITY COUNCIL SUBJECT: Paid Parental Leave EXECUTIVE SUMMARY: In response to a request by Council on October 20, 2015, an Informal Staff Report was provided on December 4, 2015 which summarized the research that the Human Resources staff conducted on paid parental leave. Based on the research conducted at that time, there did not appear to be any other City in the State of Texas that offered paid parental leave (beyond what is required under the Family Medical Leave Act (FMLA)) other than the City of Austin. A summary of Austin’s parental leave benefit is outlined on page 3. At the August 22, 2017, Council meeting, members of the City Council again requested information on parental leave. As such, Human Resources staff did some additional research and followed up with cities previously surveyed to see if they made any changes to their leave benefits that would govern parental leave. Below is an update of the report that was sent to the Council on December 4, 2015. BACKGROUND: At the October 20, 2015, City Council meeting, a citizen report was given by Naomi Wood regarding paid parental leave for City of Denton employees—and her recommendation to extend benefits beyond the FMLA. Council directed staff to do some research as to what other cities in Texas, especially those in the DFW metroplex, were doing regarding parental leave. Under the FMLA, we must offer any employee who has been with the City at least 12 months and who has worked 1,250 hours in the 12 month period, 12 weeks of protected (assured continued employment), unpaid leave for the following reasons: • for incapacity due to pregnancy, prenatal medical care or child birth; • to care for the employee’s child after birth, or placement for adoption or foster care; • to care for the employee’s spouse, son, daughter or parent, who has a serious health condition; or • for a serious health condition that makes the employee unable to perform the employee’s job. We run our leave policies concurrent with FMLA, so employees can be paid during this 12 week period as long as they have the time accrued. The City of Denton’s leave benefit accruals are outlined in the chart on page 2. These accruals reflect the change to the non-civil service sick benefit that was adopted by Council at the Date: September 22, 2017 Report No. 2017-069 Page 2 of 7 September 12, 2017, City Council meeting (increasing the monthly sick leave accrual for non-civil service employees from 8 hours per month to 10 hours per month). Employee Group Sick Vacation Accrual Maximum Accrual Accrual^ Maximum Carry-Over Regular Full-Time, Non-Civil Service Employees 10 hours/month (equates to 15 days/year) 720 hours 10 hours/month (equates to 15 days/year) 320 hours on anniversary date *Police Civil Service Employees and Fire Civil Service Employees Working Less Than 12-hour Shifts 10 hours/month (equates to 15 days/year) No maximum accrual 10 hours/month (equates to 15 days/year) 320 hours on anniversary date *Fire Civil Service Employees Working 12-Hour Shifts 15 hours/month (equates to 15 days/year) No maximum accrual 15 hours/month (equates to 15 days/year) 480 hours on anniversary date * Police and Fire civil service employees accruals are in accordance with Chapter 143 of the Texas Local Government Code. ^This is the basic monthly accrual rate for full-time employees. Full-time employees also receive four hours of “bonus” vacation time beginning on their 5th anniversary date and an additional four hours for every year of continuous service thereafter (4 hours on 5th anniversary, 8 hours on 6th anniversary, 12 hours on 7th anniversary, etc.) DISCUSSION: On October 29, 2015, the seventeen cities below were surveyed on paid parental leave benefits. The cities were re-surveyed on August 31, 2017. Allen Arlington Austin Beaumont# Bryan Carrollton Dallas^ Fort Worth^ Frisco Garland^ Grand Prairie Irving^# Lewisville^ McKinney Mesquite# Plano^# Richardson ^ indicates those Cities that did not respond to our survey in 2015 # indicates those Cities that did not respond to our survey in 2017 Date: September 22, 2017 Report No. 2017-069 Page 3 of 7 2015 Results Fourteen of the Cities surveyed were part of our standard metroplex survey group. Through our contact with McGriff, Seibels & Williams, the City’s benefits consultants, staff was able to reach out to the Cities of Bryan, Beaumont, and Austin as well. Staff received eleven responses to the survey. Of those eleven, the only City to offer paid parental leave benefits, beyond FMLA, was Austin. Staff went on-line to review the benefits of the Cities that did not respond and could not find anything specific to paid parental leave. On November 3, 2015, Tiffani James, the City of Denton’s Benefits and Leave Coordinator, contacted the Leave Administrator for the City of Austin. The Leave Administrator stated that the Program was requested by two aides who worked for City Council. When asked which Cities they modeled their policy after, she stated she did not know of any other cities in the state of Texas that offered paid parental leave. She knew that the Cities of Chicago and San Francisco offered paid parental leave, but she stated that Austin’s policy was more generous. The following is additional information on their policy: City of Austin – Parental Leave Policy  The Program started on September 22, 2013.  The Program provides a maximum of 240 hours (separate from sick and vacation hours) for employees in a 40-hour budgeted position to use for the birth of a child or the placement of a child for adoption or foster care; leave is awarded proportionate to the employee’s budgeted workweek (i.e., 30 – 39 budgeted hours = 180 hours; 20 – 29 budgeted hours = 120 hours; less than 20 budgeted hours = 60 hours).  The employee must be eligible for FMLA to qualify for the paid parental leave.  Temporary employees and employees whose employment is negotiated through a collective bargaining agreement, or a meet and confer agreement, are not eligible for Parental Leave.  The leave must be taken within the FMLA period associated with the date of the birth or placement of a child for adoption or foster care.  Employees are not required to exhaust their accrued leave to participate in the program.  If both eligible parents work for the City, both receive the proportionate amount of aid Parental Leave (reference second bullet above).  Since inception, over 500 employees (out of 12,000) have used the Program at an approximate cost of $2 million. The Leave Administrator from Austin forwarded the policies from the Cities of Chicago and San Francisco that were given to her. The following is information on both Chicago’s and San Francisco’s policies: City of Chicago – Paid Parental Leave Policy  The Program started on November 1, 2011.  The employee must be eligible for FMLA to be eligible for the leave.  The birth mother may receive up to four weeks for a non-surgical delivery; or six weeks for a C-Section delivery. Date: September 22, 2017 Report No. 2017-069 Page 4 of 7  The birth father, or domestic partner, may receive up to two weeks for the birth of the child.  The employee may receive up to two weeks paid leave for the adoption of a child. City of San Francisco – Paid Parental Leave Policy  The Program started on November 5, 2002.  The leave applies to permanent, provisional and exempt employees who (a) normally work at least twenty hours per week and (b) have completed six months of continuous service; any other City employee (a) who has worked at least 1040 hours in the twelve months prior to leave and (b) whose average work week is at least twenty hours.  Provides compensation to supplement state disability insurance payments, paid sick leave and vacation, so the employee will receive the equivalent of his or her full salary for up to twelve weeks.  The employee must exhaust their accrued paid leave before receiving any supplemental compensation.  The supplement compensation shall be provided for no more than twelve weeks for employees on approved FMLA or sixteen weeks for employees on Temporary Pregnancy Disability Leave. Staff also did a Google search for “Paid Parental Leave in Texas.” Many references to the Texas laws governing maternity leave came up. Additionally, references to the University of Texas at Austin policy came up. Their policy offers up to 12 weeks of unpaid parental leave, for employees who are not eligible for Family and Medical Leave. According to their policy, though, employees must use all accrued and available paid leave while taking parental leave. There were also references to similar policies at Texas A&M University, Texas Tech University, and Texas Woman’s University. There have been numerous attempts to enact paid parental leave for federal employees. In 2015, S. 2033 was introduced offering 6 weeks of paid leave to federal employees who are experiencing birth, adoption or foster placement of a child. H.R. 532 was also introduced providing that 6 of the 12 weeks of parental leave made available to a Federal employee (under federal law) shall be paid leave. These bills did not pass. 2017 Results Staff received thirteen responses when re-surveying the Cities. There were no changes to the 2015 survey results; however, staff has found through researching the Internet that, in addition to the City of Austin, the City of San Antonio and the City of Lake Jackson, Texas offer paid parental leave. Specifically, the City of San Antonio offers up to six weeks of paid parental leave to full- time employees (birthing and non-birthing parents), within twelve months after the birth of placement of a new child in connection with adoption or foster. Their paid parental leave runs concurrently with FMLA leave. The City of Lake Jackson, which is a smaller municipality within the Houston-Sugar Land metropolitan area, offers up to six weeks for mothers and three weeks for all other employees who qualify for parental leave. Their paid parental leave also runs concurrently with FMLA leave. Date: September 22, 2017 Report No. 2017-069 Page 5 of 7 There has continued to be a push for paid parental leave at the federal level. A July 22, 2017, article that was published on the USA Today website1 reported: “In its 2018 budget, the Trump administration included a national paid leave plan for parents after the birth or adoption of a child. Proposed are six weeks of paid leave for mothers and fathers at an estimated annual cost of $25 billion, funded by restructuring the federal unemployment insurance system… Congressional Democrats, meanwhile, have reintroduced the Family and Medical Insurance Leave, or FAMILY, Act, which they first submitted in 2013. It would permit all workers to take up to 60 individual days of paid leave per year to care for a new child, a sick family member or one’s own illness. Workers would receive up to 66% of their regular wages to a maximum $1,000 per week. The program, initially introduced in 2013, would be funded by a 0.4% payroll tax on workers’ wages, split evenly between employers and employees… Republican lawmakers have countered this year with the Strong Families Act. That bill would give employers offering at least two weeks of paid family or medical leave a 25% tax credit for wages paid to workers taking up to 12 weeks of leave. The credit would be capped at $3,000 per employee per year. The credit would cease entirely two years after enactment.” On February13, 2017, H.R.1022 and S. 362 (Federal Employees Paid Parental Leave Act of 2017) were introduced into Congress. As with the bills in 2015, they allow for up to six weeks of paid leave after the birth, adoption or fostering a new child. Federal employees can currently take up to twelve weeks of unpaid family or medical leave in those situations. POTENTIAL IMPACT FOR A PAID PARENTAL LEAVE PROGRAM: 2015 Impact If the City of Denton offered paid parental leave and modeled it after the City of Austin (up to 6 weeks pay), the approximate number of employees who could have benefitted from the program, as well as the estimated cost for 2014 and 2015, are outlined below. This information is based on the number of employees who added a baby to the health insurance plan and who were eligible for FMLA at the time. 2014 2015 (as of November 11, 2015) Number of Employees (includes Police and Fire Civil Service) Approximate Cost* Number of Employees (includes Police and Fire Civil Service) Approximate Cost* 39 $236,487.23 35 $230,032.02 *Based on salary at the time the employee enrolled the baby on the health insurance plan. Cost is inclusive of base salary only. This cost is over and above any costs associated with sick and vacation leave. It is difficult to determine how many of the employees referenced in the chart above would have been subject to unpaid leave without doing a considerable amount of research. However, the Date: September 22, 2017 Report No. 2017-069 Page 6 of 7 Benefits and Leave Coordinator routinely has discussions with employees going out on leave, and they frequently tell her how long they plan on taking off work based on their accrued leave balances. Based on the discussions she remembers, five employees would have been unpaid had they taken six continuous weeks off in 2014 as well as five employees in 2015. It should be noted, however, that according to information found on-line and through discussions with the Leave Administrator for the City of Austin, this program has cost Austin much more than they originally anticipated. In fact, an article on the BenefitsPro website2 stated “…the city had budgeted for 60 of its employees to use the new benefit the first year, once it became available last October. Instead, in just the first seven months since it became available, 162 parents took the paid leave offer. The bill: $691,000 — about twice what the city had planned to spend for the first 12 months...” 2017 Impact Using the same criteria from 2015, the number of employees who could have benefitted from a paid parental leave program and the cost associated with such a program for 2016 and 2017, are outlined below. 2016 2017 (as of September 8, 2017) Number of Employees (includes Police and Fire Civil Service) Approximate Cost* Number of Employees (includes Police and Fire Civil Service) Approximate Cost* 44 $301,775.76 30 $194,967.84 *Based on salary at the time the employee enrolled the baby on the health insurance plan. Cost is inclusive of base salary only. This cost is over and above any costs associated with sick and vacation leave. As far as employees who would have had to use more than their accrued time and, therefore, subject to unpaid time, the Benefits and Leave Coordinator recalls four employees in 2016 and eight employees in 2017. Councilmember Gregory was interested in knowing the potential cost for a benefit consisting of anywhere from two to eight weeks of full pay, ¾ pay, and ½ pay. The cost above assumes six weeks at full pay, which is consistent with Austin’s benefit. If we considered partial payment for six weeks, the cost would be as follows: Year Approximate Cost for ¾ Pay Approximate Cost for ½ Pay 2016 $226,331.82 $146,225.88 2017 (as of September 8, 2017) $150,887.88 $97,483.92 STAFF CONTACT: Carla Romine, Director of Human Resources (940) 348-8344 carla.romine@cityofdenton.com Date: September 22, 2017 Report No. 2017-069 Page 7 of 7 1 Steven Findlay, Citing Sources [https://www.usatoday.com/story/news/nation/2017/07/22/paid -parental-leave-idea- could-transcend-politics/501967001/News Paid parental leave may be the idea that transcends politics] 2Cook, Dan: Citing Sources: [http://www.benefitspro.com/2014/08/01/austin -city-workers-embrace-paid-parental- leave-po]: para. 3: [Aug 1, 2014]