Navigating the evolving landscape of paid leave: a guide for modern brokers

Paid leave is quickly becoming not only a critical focus for employers, but a topic of interest on the national stage, being discussed by politicians and lawmakers alike. Shifting societal norms, evolving family dynamics, and new legislation mean that paid leave is no longer limited to traditional disability policies or unpaid Family and Medical Leave Act (FMLA) protections. For brokers, keeping up with these trends—and guiding clients through them—requires understanding the nuances of new policies, as well as anticipating where this space is headed.

We recently spoke with Carla Fritz, Director of Absence and PFML Product at Sun Life, to uncover how carriers and brokers are responding to the increased demand for paid leave solutions, and where she sees the industry headed in the coming years.

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Carla Fritz

Director of Absence and PFML Product

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Beyond disability and FMLA: what "paid leave" means today

Historically, "paid leave" was synonymous with disability coverage—generally short-term disability programs that provided some level of income replacement during a medical recovery. However, today’s Paid Family and Medical Leave (PFML) programs now expand beyond medical needs, also offering paid leave for:

• Parental leave for bonding with a newborn or adopted child
• Caregiver leave for attending to a sick family member
• Protection for domestic violence survivors
• Coverage for non-traditional family structures, including in-laws and domestic partners

The definition of paid leave varies across states, with each introducing its own mandates and requirements. Some states align their policies with federal FMLA protections, while others offer expanded leave options, such as inclusion of domestic violence leave.

Why paid leave is essential for employers today

In recent years, the workforce has changed dramatically. Two-income households are now the norm and families are more complex and diverse than ever before—meaning today’s benefits need to reflect the realities of modern life. As Carla Fritz puts it, “There isn’t a ‘normal’ anymore.”

With that in mind, here are the key factors driving the increasing importance of paid leave for employers:

• Diversity and inclusion: Inclusive policies reflect a commitment to equity for all employees, regardless of family structure.
• Legislative changes: As new state programs emerge, offering paid leave is becoming an expectation, not just a perk.
• Retention and recruitment: Competitive employers recognize that a well-rounded benefits package—particularly one with robust leave policies—is essential for attracting and retaining top talent.

How paid leave impacts the brokers' role in devising a benefits strategy

For brokers, guiding employers through the complexities of paid leave involves more than just recommending plans. Employers look to brokers as consultative partners, seeking advice on navigating regulatory challenges, as well as avoiding inequities in their policies.

According to Fritz, there are three key areas that brokers should focus on as they help their clients navigate implementing and managing paid leave offerings:

1. Mitigating risk: Brokers must also work to ensure that the policies comply with state regulations and are legally sound. This becomes more complex for employers who have employees or worksites that span multiple states.
2. Identifying inequities: Brokers should strive to help their employer clients to provide consistent benefits across all employee groups to avoid unintentional biases.
3. Ensuring executability: Ultimately, a broker’s role is to also help evaluate whether paid leave programs can be smoothly implemented within an employer’s existing HR systems, as well as guide their clients on alternate options in the event there could be an issue.

Challenges brokers face with paid leave programs

One of the biggest challenges brokers encounter is the lack of standardization. As Fritz noted, every employer has different priorities, which can influence the type and structure of leave programs they need.

Even on the state side, statutory paid leave programs can differ from one another significantly. Although they are insured products, each state has its own "flavor," requiring brokers to start from scratch with each client. This complexity makes it essential for brokers to stay on top of both state and federal developments, while keeping an eye on legislative changes ahead.

The growing partnership between carriers and brokers

As paid leave becomes a larger part of employee benefits packages, brokers and carriers are evolving their partnerships. Carriers are becoming more proactive in developing comprehensive family leave insurance products.

Brokers, in turn, are relying on carriers to offer consultative support. Brokers want partners who can help them evaluate the feasibility of relevant leave programs, identify potential compliance risks, and ensure that ultimately, policies align with client goals.

Looking ahead: trends and predictions for paid leave

The market for paid leave continues to evolve, but Fritz shared some trends she foresees for the years ahead:

• State-specific programs may slow: While four new state programs are launching in 2026, no others are confirmed beyond that.
• Demand for employer-funded leave will grow: Employers are increasingly offering company-paid leave beyond state mandates, particularly for parental leave and caregiver support. This could become more common in years to come.
• Challenges in convincing leadership: While HR departments often advocate for enhanced leave programs, convincing CEOs and CFOs can sometimes be difficult. Brokers will need to be equipped to help employers understand paid leave as a strategic investment in employee well-being and retention, rather than just an expenditure.

What should brokers do now?

With paid leave policies continuing to evolve while they increase in demand, brokers must stay proactive to help clients remain compliant and competitive. Here are a few steps modern brokers can begin taking:

1. Stay current on state legislation: Even though new state programs are slowing, existing ones continue to evolve, and updates can affect coverage requirements.
2. Offer strategic guidance: Help employers see the value of paid leave as part of a broader benefits strategy—one that supports employee retention and satisfaction.
3. Partner with carriers early: Work with carriers to ensure leave policies are easy to administer, align with the employer’s goals, and are free from unintended bias.

Paid leave as a competitive advantage

Paid leave is no longer just a compliance issue—it’s a strategic advantage in a competitive talent market. As employers face new demands from employees and regulators alike, brokers play a crucial role in helping them build comprehensive, compliant, and equitable leave programs that can keep employees both engaged and retained.

The key to success lies in anticipating trends, aligning with carriers, and providing strong consultative expertise. By embracing the complexities of paid leave, brokers can help their clients navigate this evolving landscape and create benefits packages that attract and retain today’s top talent.

If you’re a broker navigating the changing world of paid leave, reach out to ThreeFlow to see how we can support you with data-driven insights and collaborative solutions.