On April 4, 2016 Governor Andrew Cuomo signed the Education, Labor, Housing, and Family Assistance Article VII budget bill into law. This bill contained two important laws for New Yorkers: an increase in the minimum wage and paid family leave Insurance. This article will examine the new Paid Family Leave law and the implications for employers and employees.
Many in New York have long recognized the need for paid family leave. Assembly Member Catherine Nolan was a long time sponsor of Paid Family Leave legislation in the Assembly and worked diligently to raise awareness of the need of workers to have access to paid leave when welcoming a new child or caring for a seriously ill family member. Over the years there were various Senate sponsors including Senators Joe Addabbo, Diane Savino, and Jeff Klein, all stalwart advocates for paid family leave in their chamber.
2016 was the culmination of many years of work towards paid family leave in New York and throughout the country. An active statewide coalition brought together advocates from healthcare, childcare, research, civil rights, elder care, and beyond. Labor played a vital role in the coalition with the New York State AFL-CIO, SEIU 1199, and 32 BJ participating in the steering committee. Many other unions, including RWDSU, played active and vital roles in bringing the voice of the worker to the forefront in the fight for paid family leave.
The paid family leave program passed in New York is the strongest program in the nation, covering an estimated 6.4 million workers. California and New Jersey both have paid family leave programs that provide for 6 weeks of paid leave while Rhode Island provides for 4 weeks. New York’s program will begin on January 1, 2018 with 8 weeks of leave in 2018 and phase in to 12 weeks of leave in 2021. Workers can take leave under this program to (1) bond with a new child (including adopted and foster children), (2) care for a seriously ill child, parent, parent-in-law, spouse, domestic partner, grandchild, or grandparent, or (3) address certain needs when a family member is called to active military service. Employees are eligible for the benefit after working for 6 months.
While on leave under this program workers will have job protection and there will be a continuation of health insurance benefits. The amount of wage replacement an employee will receive is a percentage of their salary up to a percentage of the statewide average. These amounts will phase in with the number of weeks and ultimately workers will receive 67% of their average weekly wage up to the cap of 67% of the statewide average weekly wage in 2021 when fully phased in.
There will be no cost to employers for this program. Paid family leave is funded by small deductions from employee payroll of about $1.00 per week. Because Paid Family Leave is an insurance program employers will not be paying the wage replacement when an employee is on leave. Wage replacement is paid by the insurance and so the employer can use the salary they would normally pay to the employee to address any costs associated with the work needed to be done while that person is on leave, such as overtime for other employees. In the other states where paid family leave has been in place the most common way to address work when an employee is on leave is to have other employees pick up the slack.
The Paid Family Leave program is administered through the Temporary Disability Insurance (TDI) program – a program that employers are already familiar with. Public employees are not covered under the TDI system, however they be covered if their employer or union opts in through collective bargaining agreements. The mechanism of opt in was not spelled out in the law but is expected to be addressed during the regulation process.
Under this new law New Yorkers will have the opportunity to be with their families in times of joy and need while knowing they have an economic resource to fall back on. There are likely more questions that will be raised and addressed during the regulation process that all interested parties should be aware of.