Paid Family Leave Program Also Included in State Budget

New York State has adopted the most expansive paid family leave policy of any state.  Effective January 2018, employees will be eligible for paid time off to care for the birth or adoption of a child, serious health condition of a family member, or a qualified military exigency as interpreted under the Family and Medical Leave Act.  Key provisions of the act include:

• Applies to all private sector employers of one or more employees;
• Leave may be taken to participate in providing care, including physical or psychological care for a family member, to bond with the employee’s child  during the first twelve months after the child’s birth, or the first twelve months after the placement of the child for adoption or foster care; or for a qualified military exigency as defined by the FMLA;
• Family member is defined as child, parent, grandparent, grandchild, spouse, or domestic partner;
• Employees must be employed for 26 weeks before they are eligible for paid family leave; (175 days for part-time employees);
• Employees returning from leave are entitled to return to their same or comparable position without loss of benefits they would have accrued otherwise;
• Employers must continue the employees’ health insurance during leave as if they were not on leave;
• Benefit amounts shall be:
  • January 1, 2018; up to 8 weeks of leave at 50% of the employees average weekly wage to a maximum of 50% of the state’s average weekly wage;
  • January 1, 2019; up to 10 weeks of leave at 55% of the employees average weekly wage to a maximum of 55% of the state’s average weekly wage;
  • January 1, 2020; up to 10 weeks of leave at 60% of the employees average weekly wage to a maximum of 60% of the state’s average weekly wage;
  • January 1, 2020 and thereafter; up to 12 weeks of leave at 67% of the employees average weekly wage to a maximum of 67% of the state’s average weekly wage.
• Income replacement will be paid for by an insurance policy procured by the employer on behalf of the employee, the full cost of which will be paid by payroll contributions of the employee;
• When practicable, the employee should provide 30-days’ notice of intent to take paid family leave;
• An employer may offer an employee who has accrued but unused vacation/personal leave to choose whether to charge all or part of the family leave time to this unused time and receive full salary; or, to not charge benefit time and receive the benefit provided.

This program is supposed to have no cost to employers, but even if employee premiums cover the full cost of the benefit, there’s an administrative burden placed on all businesses. In addition, it could be a challenge having to temporarily replace a worker, especially for a small business. We were successful pushing back from the 4-week eligibility period in the original proposal to the six month waiting period for eligibility under the final plan.

There’s also a “circuit breaker” included in the bill that will require the state Department of Financial Services to monitor the program to make sure it works as designed. And the law specifically states that “no employer shall be required to fund any portion of the family law benefit” so under no circumstances can business be forced to help pay for this program – unless the current system doesn’t work and the law is changed. Another reason for us to remain diligent and stay engaged in the legislative and political process.