New York Employers Gearing Up for Paid Family Leave Law

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By Gerald B. Silverman

New York employers are gearing up for the biggest change in state employment law in decades: virtually all private employers in the state will be required to provide paid family leave to their employees beginning Jan. 1.

New York will become the fourth state—after California, New Jersey, and Rhode Island—to require paid family leave. Supporters and opponents of the law said the New York program is the most far-reaching of any state’s.

Under the law, some 6.7 million employees will be eligible for paid family leave, according to A Better Balance, a New York City-based group that advocates for paid family leave.

Both small and large employers will be impacted, even though some large employers are already providing paid family leave, Sherry Leiwant, co-president of the group, told Bloomberg Law. Only 14 percent of employers nationwide provided such leave, she said.

Zack Hutchins, a spokesman for the Business Council of New York State, said the biggest burden will fall on small businesses. “A whole new group of employers who’ve never had to deal with any of this” will have to comply with the requirements, he told Bloomberg Law. “It’s not going to be easy.”

Four-Year Phase-In

The paid family leave program will be phased in over four years and will cover virtually all private employers, regardless of size. Public employers may opt into the program but aren’t required to do so.

Employees on family leave will be eligible to receive up to 50 percent of the state’s average weekly wage in 2018, 55 percent in 2019, 60 percent in 2020, and 67 percent when the program is fully implemented in 2021. The state’s current average weekly wage is $1,305.

Employees, under the phase-in, can take up to 8 weeks of paid leave in 2018, 10 weeks in 2019 and 2020, and 12 weeks when fully implemented in 2021.

The leave program is available to full-time employees with a regular schedule of at least 20 hours per week after 26 consecutive weeks of employment, and to part-time employees with a regular schedule of less than 20 hours per week after working 175 days for their employer.

Employees are eligible to take leave for the birth or adoption of a child, to care for a sick family member, or in certain cases during a military deployment.

“Our strongest-in-the-nation paid family leave policy will ensure that no one has to choose between losing a job and missing the birth of a child or being able to spend time with a loved one in their final days,” Gov. Andrew M. Cuomo (D) said in a Dec. 18 statement.

Enough Funding?

The Business Council is concerned that the number of employees taking leave will “far exceed the state’s expectations,” leaving the program under-funded. As a result, it says, the state could raise the employee contribution rate or come after employers to make up the difference.

New York’s program will be funded by employees, who will make a mandatory weekly payroll contribution equal to 0.126 percent of their pay, capped at the average weekly wage of $1,305.

The weekly contribution will be a maximum of $1.64. An employee earning $27,000 per year will make a weekly contribution of $0.65.

“We’re going to be keeping a very close eye on it,” Hutchins said. “We could very much be looking toward a fight next year.”

But Leiwant said the experiences of other states leads to the opposite conclusion. Both California and New Jersey have had surpluses in the funds used to pay for their family leave programs.

“We’re extremely confident that it will be enough,” she said, referring to the 0.126 percent contribution rate. “The program is extremely inexpensive.”

Employer Compliance Concerns

The Business Council’s phone lines have been ringing off the hook with questions from employers, according to Hutchins. It has held bi-monthly webinars on the new law and plans to hold bi-weekly webinars in 2018.

Nicholas M. Reiter, an employer-side attorney at Venable LLP, said employers should update their leave policies. They also should talk to their disability insurance carrier about obtaining family leave benefits, and take other steps to avoid costly errors.

“Anti-retaliation and record-keeping training are good ways to avoid costly compliance mistakes,” he told Bloomberg Law in an email.

“Managers should be informed that they are prohibited from treating an employee differently merely because he or she exercised the right to take paid family leave,” he said, citing the law’s retaliation protections.

Reiter said employers should also be aware that the law requires them to reinstate employees after a paid leave to “the same or substantially the same job.”

“That means employers must ensure a reinstated employee receives the same or substantially the same pay and benefits, as well as performs the same or substantially the same job duties,” he said.

To contact the reporter on this story: Gerald B. Silverman in Albany, New York, at gsilverman@bloomberglaw.com

To contact the editor responsible for this story: Terence Hyland at thyland@bloomberglaw.com

For More Information

Further information on the state program is available at http://src.bna.com/vdW.

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.

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