Announcement: SOA releases passing candidate numbers for October 2024 Exam FM.

Guide to Domestic and International Paid Family and Medical Leave Programs

By Paul Correia

In The Public Interest, September 2023

Editor’s note: The following is excerpted from an SOA research report that was sponsored by the SOA’s International and Social Insurance and Public Finance professional interest sections. The purpose of the report was to explore Paid Family and Medical Leave programs in the U.S. and internationally. Readers are encouraged to investigate the whole report for a thorough background and reference of these programs.

The guide compares domestic[1] and international mandated leave programs. These programs mandate employers provide a minimum level of benefits to employees for qualifying leaves of absence, such as maternity leave or medical leave. The international programs included in the guide are based on leave mandates in the following 40 countries:

  • Argentina
  • Australia
  • Austria
  • Belgium
  • Brazil
  • Canada
  • Chile
  • China
  • Colombia
  • Costa Rica
  • Denmark
  • Estonia
  • Finland
  • France
  • Germany
  • Greece
  • Hungary
  • India
  • Israel
  • Italy
  • Japan
  • South Korea
  • Latvia
  • Lithuania
  • Luxembourg
  • Mexico
  • Netherlands
  • Nigeria
  • Norway
  • Poland
  • Portugal
  • Singapore
  • Slovak Republic
  • Slovenia
  • South Africa
  • Spain
  • Sweden
  • Switzerland
  • Turkey
  • United Kingdom

The domestic programs represent paid family and medical leave (PFML) programs in US jurisdictions that have passed paid leave laws.[2] As of the writing of the guide, California, Colorado, Connecticut, Delaware, District of Columbia, Maryland, Massachusetts, New Jersey, New York, Oregon, Rhode Island, and Washington have adopted PFML legislation.[3] Although the domestic PFML programs have different designs in every state, e.g., different benefit amounts, benefit periods, etc., the domestic PFML programs all provide weekly income benefits for the same qualifying events, including parental leave, caring for sick relatives, and treating one’s own serious health condition.[4]

Unlike the domestic programs, the international programs are based on federal mandates instead of regional mandates (although Quebec has adopted its own leave laws that are different than the federal mandates in Canada). The international programs vary from country to country in terms of benefit design as well as qualifying events. Most international programs include paid maternity and paternity leave along with other paid and unpaid family leave mandates such as childcare and caring for sick relatives. The international programs also feature medical leave mandates, although some countries provide these benefits through social insurance programs instead of a legislative mandate.

Section 1 of the guide contains an executive summary of the similarities and differences between the international and domestic leave programs. Section 2 provides an overview of the international leave programs. Because the international programs vary significantly in terms of design and qualifying events, the information in Section 2 provides a broad perspective of the various leave mandates in the representative countries. Section 3 provides an overview of the domestic PFML programs. Since these programs are similar in structure and qualifying events, the information in Section 3 provides in-depth observations on similarities and differences among the domestic PFML programs. The “References” section contains a list of sources that were used for this research project.

Section 1: Executive Summary

This section contains a summary of the similarities and differences between domestic and international programs. Because the programs vary significantly in terms of mandated leaves and structure, the observations below are relatively high level and reflect general observations.

  • In some ways, the international programs provide more generous benefits than the domestic PFML programs. For example, many international programs provide benefits that replace 100% of wages, which is more generous than the domestic PFML replacement ratios. Oregon PFML provides 100% wage replacement for workers with wages below 65% of the state average weekly wage, and the replacement ratio reduces for workers who earn more than 65% of the state average weekly wage. All other domestic programs provide less than 100% wage replacement.

  • Maternity benefits tend to be more generous for the international programs than the domestic programs. For example, the international programs feature longer maternity benefit periods, on average, than the domestic PFML programs. The average benefit periods for maternity leave are summarized in Table 1 for the international programs:

    Table 1
    Average Maternity Benefit Period in Weeks—International Programs

    Quartile

    Average Benefit Period (Weeks)

    First Quartile

    34.2

    Second Quartile

    19.1

    Third Quartile

    16.8

    Fourth Quartile

    14.4

    Overall Average

    21.1


    The benefit periods for the domestic programs are shorter, on average, than the international programs. Domestic PFML programs consider the medical and family components of maternity separately for determining the benefit period. Medical maternity claims are typically paid for 6–8 weeks, and family bonding claims may last up to 12 weeks (i.e., total of 18–20 weeks), although many domestic programs limit the combined benefit period to 12 weeks (meaning the medical and family components are limited to 12 weeks total).

  • On the other hand, the domestic programs tend to have longer benefit periods for paternity leave than the international programs. Most domestic PFML programs allow workers to take up to 12 weeks of paternity leave within a 12-month period subject to the combined limit (i.e., if a worker has already taken leave for medical reasons, then the maximum benefit period for paternity leave within the same 12-month period could be less than 12 weeks depending on the combined limit). In comparison, only eight of the 40 international programs feature benefit periods of 12 weeks or longer for paternity leave, as shown below:

    Table 2
    Paternity Benefit Period In Weeks—International Programs

    Country

    Paternity Benefit Period (Weeks)

    Japan

    12

    Austria

    13

    Portugal

    15

    Norway

    15

    Spain

    16

    Slovak Republic

    28

    Sweden

    48

    South Korea

    52

     

  • International programs typically feature different benefit periods for maternity and paternity leave, and the benefit period tends to be longer for maternity leave. On the other hand, domestic PFML programs often provide the same benefit period for maternity and paternity leave (although in some cases the benefit period for maternity leave, which includes medical and family components, is longer than the benefit period for paternity leave).

  • Many international programs include vacation and bereavement leave mandates. In the US, there are no statutory or federal mandates for vacation or bereavement leave.

  • The domestic PFML programs allow workers to take family leave to care for sick relatives. Many international programs include similar family leave mandates to care for sick relatives, although some international programs exclude family leave.

  • In the US, PFML has evolved into a single program that covers both family and medical necessities, providing the same level of benefits for different qualifying events. In other countries, family and medical leave benefits are mandated under separate laws and the benefits can be different for different qualifying events. In some foreign countries, medical leaves are covered under social insurance programs instead of through legislative mandates.

  • Many PFML programs in the US allow employees to take paid leave if a family member who is a member of the military is deployed at home or abroad. Similar mandates for military exigencies do not exist for the international programs.

  • Some domestic PFML programs include safe leave for workers who are victims of domestic violence. Safe leave is typically not a qualifying event in international programs (although Australia includes domestic violence leave).

Statements of fact and opinions expressed herein are those of the individual authors and are not necessarily those of the Society of Actuaries, the newsletter editors, or the respective authors’ employers.


Paul Correia, FSA, MAAA, is a principal and consulting actuary at Milliman. Paul can be contacted at paul.correia@milliman.com.


Endnotes

[1] The domestic programs in the guide refer to programs in the United States.

[2] Some states have also adopted paid sick leave mandates. These mandates are discussed in Section 3.7.

[3] Hawaii has mandated disability (i.e., paid medical leave) benefits but not paid family leave.

[4] Some newer PFML programs include “safe” leave as a qualifying event for employees who are victims of domestic violence. Also, most PFML programs allow employees to take paid “military” leave to attend military exigencies, although military claims represent a small portion of total PFML claims (less than 1%).