New York's legislature went into overdrive and closed out March with a finalized budget deal that promises $15 an hour to employees and mandated paid-family-leave time for them as well.
The new deal contrasts with other states that offer the paid time off by offering up to twelve weeks paid time off that allows employees to bond with a new child or take care of seriously ill family members.
This new deal will supersede the Family Medical Leave Act (FMLA), which requires some employers to offer unpaid time off for some employees but employers with less than 50 employees are exempt. Other requirements in the newly outdated FMLA, are employment requirements of greater than a year as well as a prescribed minimum number of hours worked for the previous year.
This new monster bill eliminates many of the FMLA exclusions and applies to full-time and part-time employees. There are no exemptions for small businesses (less than 50 employees), and employees need only six months of service to qualify. The legislature claims the expense of the program will be paid by a one dollar per week deduction from employees and no cost to the employer. Men and women are entitled to the new paid leave program for both straight and same-sex two-parent households and single-parent households.
When does it Start?
Nothing in government happens quickly. The bill allows for a phased-in period for benefit time and payments. The paid leave benefits will kick in January 1, 2018, when the phase-in period begins. Employees will become eligible for eight weeks of paid leave in 2018, then ten weeks in 2019 and 2020, then up to twelve weeks beginning 2010.
Beginning with the 2018 kick-off, the paid leave will cover 50% of an employee's average pay and then rise over the following four years to a maximum of 67% of an employee's average pay. The maximum payment represents two-thirds of the state's average weekly wage of $1,266.44 which translates to $848. If you're a high earner, be prepared to take a huge cut during your paid family leave, but hey, it's $848 higher than before.
There are costs to consider even though the plan is supposed to be funded by the employee rather than employers. The additional costs of hiring temporary employees or paying overtime to existing employees to cover the responsibilities of the "on leave" employee may become unbearable for small business employers. In states such as California, where six weeks employee family leave has been available for over ten years, many businesses are reporting that the mandate has attributed to basically neutral effects. In fact, in many cases, businesses are reporting a positive effect because of improved employee morale and job security.
Businesses wanting to know why the paid-family-leave program is about to become a reality need to look no further than New York's office of the governor. Governor Cuomo has had recent family tragedies that obviously triggered his need to get this done sooner rather than later. During a February news conference, the governor remarked " There are times in life when you should be with family members because that's what it's all about at the end of the day... When you have a newborn baby, you should enjoy it... If you have a family member who is passing away, God forbid, you should be there." If you have questions about FMLA contact Skyline Risk Management, Inc. at (718) 267-6600 to discuss your concerns.