The need for sick leave is universal.
Everyone has taken time off at some point, whether to recover from an illness, go to a medical appointment, or care for a sick family member.
Yet, millions of American workers are forced to choose between protecting their health and keeping their paycheck.
Despite its globally strong economic standing, the U.S. remains one of the few industrialized nations without a universal paid family leave policy.
In response to growing pressures, states are building their own Paid Family & Medical Leave (PFML) frameworks.
However, these laws have become a rapidly escalating compliance burden for employers, especially those with multi-state workforces.
Currently, the Family and Medical Leave Act (FMLA) of 1993 is the only nationwide policy that provides job-protected 12 weeks of unpaid leave, but only to employees who meet specific eligibility criteria.
To qualify, a worker must have 12 months’ tenure, 1,250 hours worked in the past year, and work at a site with 50 coworkers nearby.
According to the Department of Labor (DOL), around 44% of workers do not qualify for FMLA due to tenure or hours worked.
However, even those who are eligible may not choose to take it.
While FMLA protects a worker’s job and health insurance, it offers no pay. For many Americans, especially low-wage workers, this means they can’t afford to take the leave they’re entitled to.
As the American Academy of Pediatrics noted in a recent statement, “Because no universally available PFML currently exists in the United States, families are often forced to make difficult choices between a paycheck and unpaid leave to care for a sick loved one or newly arrived child, resulting in lost wages for unpaid caregivers and subsequent health, income, and wealth inequities across gender, race, ethnicity, and socioeconomic status.”
Without a federal paid leave mandate, many states around the U.S. have been developing their own programs.
As of early 2025, 13 states plus the District of Columbia have mandatory PFML programs.
The most common approach for PFML is a social insurance model where both employer and employee contributions fund a state-run benefit pool. New York is the only exception here, as it offers a private insurance option regulated by the state and allows employers to purchase plans from approved carriers.
The only downside is that PFML programs vary widely across states, with nearly 30 unique policy elements. Each state sets its own rules around wage replacement rates, who qualifies, how the program is funded, and when benefits become available.
In addition to those with mandatory programs, about eight states have created optional PFML programs, mostly administered through private insurance.
States offering or exploring voluntary PFML: Alabama, Arkansas, Florida, New Hampshire, Tennessee, Texas, Vermont, and Virginia.
Paid family and medical leave (PFML) laws should not be confused with paid sick leave laws, which are typically shorter in duration and cover routine illnesses or preventive care.
As part of this broader shift, paid sick leave is now required in 19 jurisdictions, including 18 states and Washington, D.C.
Note: Missouri, Alaska, and Nebraska sick leave laws take effect in 2025.
Not all states have jumped on the paid leave bandwagon.
Texas is a prime example of a large state with over 15 million workers and no mandatory paid family or medical leave program.
Texas technically authorized optional participation in paid leave insurance in 2023: private insurers offer PFML-style policies that Texas employers can voluntarily buy into.
However, uptake has been minimal, with only two insurers offering this type of leave. In other words, most employers haven’t opted in without a mandate or incentive, and most workers remain uncovered.
The risks for states without paid leave are economic and competitive.
Shortlister’s “Parental Leave Guide for Employers & Employees” shows that paid leave can improve employee retention and reduce turnover costs. “Leave desert” states like Texas that lag in offering these benefits might find it harder to attract skilled workers.
Then there’s also an equity dimension: without state programs, access to paid leave in these states depends on the employer. Big corporations might provide generous leave, but many small or mid-size businesses cannot afford it on their own.
As a result, a two-tier system has emerged where an employee’s ability to take paid leave often depends on their employer’s size or location rather than their personal or family needs.
Considering the fragmented and inconsistent landscape, there has been increased momentum at the federal level to establish a national paid leave framework for all states.
A bipartisan House working group recently rolled out the “More Paid Leave for More Americans Act.” It would help states via grants and an interstate cooperative network, with pilots requiring at least 6 weeks’ leave for new parents and a 50–67% wage replacement rate.
Attention has also turned to expanded tax incentives for employers.
Section 45S, a federal tax credit first piloted in 2017, offers employers a tax credit (generally 12.5% to 25% of wages) if they voluntarily provide paid family and medical leave to employees.
Unfortunately, this credit has been used little – only about 12,700 businesses claimed it in 2021 – and is set to expire soon.
There is a bipartisan push to make the 45S credit permanent and more generous.
In fact, the latest proposal would reduce the required tenure from 12 to 6 months, cover part-time workers, and even allow employers to claim the credit for buying private leave insurance to cover employees’ wages.
In summary, the trajectory is clear: more states will adopt paid leave in some form in the next couple of years, and the federal government is closer to taking action.
Even without a federal mandate, nearly half of U.S. states now require some form of paid leave.
Navigating FMLA, state PFML, paid sick leave, and local laws means updating policies regularly and staying consistent across jurisdictions.
In the short term, key strategies for employers include:
Forward-thinking companies should treat leave policies not just as a legal requirement but as a signal to employees that they’re supported when it matters most.
Senior Content Writer at Shortlister
Browse our curated list of vendors to find the best solution for your needs.
Subscribe to our newsletter for the latest trends, expert tips, and workplace insights!
The first half of 2025 closed with a wave of strategic moves as companies doubled down on expansion, collaboration, and product innovation.
What are the latest changes to workplace regulations under the new administration? From DEI rollbacks to labor board delays, here’s what employers need to know.
While the early weeks of Q2 suggested a more subdued pace, May brought a decisive uptick in industry activity. From major acquisitions to IPO filings and product launches, here’s what defined the past 30 days.
Without a federal policy, paid leave still depends on where you live, not how much you need it. But will that change soon?