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The U.S. Office of Personnel Management (OPM) is issuing new and revised regulations that provide a new paid leave benefit, Paid Parental Leave, for qualifying Family and Medical Leave Act (FMLA) periods. The Federal Employee Paid Leave Act created this new category of paid leave and established parameters for its use. The regulations will provide a framework for agency compliance with the new statutory requirements.

Statement of Need:

OPM is issuing the rule to implement the Federal Employee Paid Leave Act. Currently, Federal employees must take unpaid parental leave unless they use their sick or annual leave during parental leave. This regulation will provide paid parental leave to parents of newly born or placed children in the Federal workforce, serving as a model for the rest of the country.

Summary of the Legal Basis:

The proposed rule is statutorily mandated pursuant to the FY20 NDAA, Public Law 116-92.

Anticipated Costs and Benefits:

This interim final rule will affect the operations of over 120 Federal agencies--ranging from cabinet-level departments to small independent agencies. We estimate that this rule will require individuals employed by these agencies to spend time in order to update agency policies and procedures for parental leave, and to devote additional time to manage staffing following increased utilization of parental leave. For the purpose of this cost analysis, the assumed average salary rate of Federal employees performing this work will be the rate in 2020 for GS-14, step 5, from the Washington, DC, locality pay table ($137,491 annual locality rate and $65.88 hourly locality rate). We assume that the total dollar value of labor, which includes wages, benefits, and overhead, is equal to 200 percent of the wage rate, resulting in an assumed labor cost of $131.76 per hour.

In order to comply with the regulatory changes in this interim final rule, affected agencies will need to review the rule and update their policies and procedures. We estimate that, in the first Start Printed Page 48086 year following publication of the final rule, this will require an average of 160 hours of work by employees with an average hourly cost of $131.76. This would result in estimated costs in that first year of implementation of about $21,000 per agency, and about $2.5 million in total Governmentwide. In addition, agencies will face ongoing administrative costs (including the administrative costs of administering the program and hiring and training new staff to replace lost hours of work) as Federal employees utilize additional parental leave. We estimate that this will require an average of 520 hours of work per agency by employees with an average hourly cost of $131.76 in each year following publication of the final rule. This would result in estimated annually recurring costs averaging about $69,000 per agency and about $8.2 million in total Governmentwide.

Risks:

N/A