Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.
New York Governor Andrew Cuomo executed sweeping legislation on April 4, 2016, that will gradually raise the minimum wage in New York to $15 an hour1 and provide a phased-in system of paid family leave benefits providing covered employees up to 12 weeks of paid family leave – currently the most comprehensive paid family leave program in the nation. This Insight discusses the leave provisions, benefits schedule, coverage and other essential details of the new paid family leave law,2 referred to as the New York Paid Family Leave Benefits Law (“PFLBL”).
Essential Features of the Paid Family Leave Benefit Program
The PFLBL is a series of amendments to the New York State Workers’ Compensation Law. When the amendments are fully phased in, covered employees will be eligible for up to 12 weeks of paid family leave annually to care for an infant or a family member with a serious health condition, or to assist with family obligations when a family member is called into active military service. Eligible employees will be paid by a state fund – not their employers – financed by deductions taken directly from employees’ wages, not from tax contributions paid by employers. Notably, the paid family leave is not available for an employee’s own serious health condition, although an employee may be eligible for income protection benefits under New York’s existing short-term disability insurance program.3
Who Qualifies to Receive Paid Family Benefits and When Do They Qualify?
Paid family leave benefits will be available for employees in New York who work 26 or more consecutive weeks for an employer.4 Eligible employees meeting these criteria may receive paid family leave (1) to provide care for a family member because of the family member’s serious health condition; (2) to bond with their child during the first 12 months after the child’s birth, or during the first 12 months after placement of the child for adoption or foster care; or (3) to attend to obligations arising because the spouse, child, or parent of the employee is on active duty or has been notified of an impending call to active duty in the United States armed forces.5
Like workers’ compensation benefits and state disability benefits, paid family leave benefits will be available to employees regardless of the number of employees a business employs.6 Any employer covered by the New York Workers’ Compensation Law7 will have to permit eligible employees to take paid leave and will have to deduct contributions from their employees’ pay to fund paid leave benefits.
Unlike workers’ compensation and state disability benefits entitlements, which provide only monetary disability or injury benefits and create no specific entitlement to an actual leave of absence, the PFLBL explicitly entitles employees who have worked for the employer for at least 26 weeks to a paid leave of absence pursuant to the phased-in schedule set forth below, and requires that employees be reinstated to their position or a comparable position upon return from the leave.8 The law thereby imposes new family leave obligations upon employers in New York not covered by the federal Family and Medical Leave Act (“FMLA”) because they do not employ 50 or more employees within a 75-mile radius.9 Further, while the FMLA requires that employees be employed by the employer for 12 months and have worked for at least 1,250 hours within the previous 12-month period to be eligible for leave,10 an employee is eligible for PFLBL leave after only 26 weeks (6 months), and there is no minimum hours requirement.11
Schedule for Implementation of Paid Family Benefits
The requirement to provide paid leave, the amount of leave required, and the amount of pay that employees may receive will be phased in as follows:
(i) On or after January 1, 2018, employees may receive up to eight (8) weeks of paid benefits in any 52-week period at 50% of their average weekly wage, but in an amount not to exceed 50% of the New York State average weekly wage (“NYSAWW”).12
(ii) On or after January 1, 2019, employees may receive up to 10 weeks of paid benefits in any 52-week period at 55% of the employee’s average weekly wage, but not to exceed 55% of the NYSAWW.
(iii) On or after January 1, 2020, employees may receive up to 10 weeks of paid benefits in any 52-week period at 60% of the employee’s average weekly wage not to exceed 60% of the NYSAWW.
(iv) On or after January 1, 2021, and for each year thereafter, employees may receive up to 12 weeks in any 52-week period at 67% of the NYSAWW. 13
Like the minimum wage increases, the paid leave legislation anticipates that an economic downturn may affect the economic feasibility of implementing the law, and allows the Superintendent of Financial Services to delay the scheduled increases in the paid leave benefits based upon several factors, including the current cost to employees of the paid leave benefits (because the benefits are financed by deductions from their pay), the availability of insurance policies providing paid leave benefits, and the impact of the benefit increase on employers’ businesses.14
Intermittent Paid Leave Benefits Permissible
Paid Family Leave benefits under PFLBL may be payable to employees for paid family leave taken intermittently or for less than a full work week in increments of one full day or one-fifth of the weekly benefit.15 The statute does not address whether family leave itself must also be taken in at least full-day increments, whether intermittent leave may be taken in the same manner as under the FMLA,16 or pursuant to some other schedule. Regulations to be promulgated by the Director of Workers’ Compensation may clarify the operation of intermittent leave under PFLBL.
Leave Benefits Financed By Payroll Deduction
The Legislation finances paid family leave benefits in a manner similar to the method used to finance workers’ compensation and state disability benefits – through a deduction directly from the employee’s pay. The amount of this deduction has not yet been issued, and will be determined by the Superintendent of Financial Services annually. The statute explicitly states that employers will not be required to fund paid family leave benefits through employer contributions.17
Employment Benefits Must Be Maintained During Leaves of Absence
The new statute holds that “in accordance with the Family and Medical Leave Act,” employees taking family leave under PFLBL may lose no employment benefits because they take family leave. Employers must maintain an employee’s existing health insurance benefits for the duration of the employee’s family leave, as if they had not taken such leave. However, employees taking paid family leave are not entitled to accrue seniority or other benefits during their leave as if they had never taken leave.18
The language of PFLBL indicates that the FMLA’s provisions requiring employers to continue making contributions to maintain group health plan benefits during an employee’s family leave apply to leaves covered by PFLBL. Until regulations are issued, it is not clear whether employers will be able to recover premiums from employees who choose not to return to work, as is permitted under the FMLA.19
The statute prohibits retaliation against any employee for seeking or receiving paid leave or paid leave benefits provided by the PFLBL, similar to the existing prohibition in the Worker’s Compensation Law against retaliation because an employee seeks or receives workers’ compensation benefits.20
Coordination of Paid Family Leave With Paid Time Off and Other Leaves
The PFLBL provides employers some protection and flexibility when applying leave benefits available under PFLBL to the employer’s own internal paid time off policies and leave entitlements under the federal FMLA. The statute specifically requires that:
1) No employee may receive family leave benefits over 12 weeks during any 52-week period, or in any period where family leave combined with disability benefits exceeds 26 weeks during the same 52 calendar weeks.21
2) Prior to receiving paid family leave benefits, an employee must provide a notice to the employer and a medical certification in a form to be generated by the Chairman of the Workers’ Compensation Board. Employees may not receive family leave benefits for any period where such certification has not been filed.22
3) An employer may require an employee eligible for paid family leave benefits and who has accrued but unused “vacation or personal leave” available at the time of family leave to choose whether to charge their paid time off and receive their full salary, or to not charge their paid time off accrual and instead receive paid family leave benefits. As written, and in the absence of clarifying regulations, PFLBL does not on its face permit employers to compel employees to use their available paid leave time towards the PFLBL benefit, as is permitted under the FMLA.23 However, an employer that pays full salary during a period of paid family leave may request reimbursement by their insurance carrier for advance payment of benefits.24 With either option, however, the employee will be entitled to reinstatement to the same or a similar position.25
4) Employees must use FMLA leave and state Paid Family Leave concurrently. Employees may not stack leave time to take over 12 weeks, or the maximum duration of leave permitted at the time by the phase-in schedule.26
5) Employees may not concurrently receive New York State disability benefits and paid family leave benefits.27
6) When the necessity for family leave is foreseeable, employees must provide the employer with not less than 30 days’ advance notice. If the leave is foreseeable but will begin in fewer than 30 days, the employee must provide as much notice as is practicable.
Employees Not Eligible to Receive Benefits
The legislation also identifies several circumstances when paid family leave benefits are not payable. These include:
- Any time an employee is receiving total disability benefits under a claim for workers’ compensation, volunteer firefighters or volunteer ambulance workers’ benefits. However, if an employee is receiving partial disability payments, the amount of family leave benefits combined with the benefits under those laws may not exceed the employee’s average weekly wage.
- To an employee not employed or who is on administrative leave from his or her employment.28
- To an employee currently receiving sick pay or paid time off from the employer; and
- For any day in which the claimant works at least part of the day during the same working hours as those for which family leave benefits are claimed.29
These restrictions are designed to prevent duplicative payment of benefits, and do not, on their face, restrict the employee’s ability to take time off without receiving paid leave benefits. Future regulations may clarify such scenarios.
Interaction with Federal Family and Medical Leave Act: Key Similarities and Differences
Similarities Between PFLBL and FMLA
The PFLBL attempts, in several instances, to incorporate the FMLA. The similarities are significant, and include:
1) Both FMLA and PFLBL provide a leave of absence of up to 12 weeks for family obligations for covered employees arising from the serious health condition of a family member, or for the birth, placement or adoption of a child, or because of family obligations arising because a family member is called into active duty in the United States Armed forces;
2) Both statutes require that employees taking leave be restored to the same position or a similar position as that they held prior to leave;
3) Both statutes require employers to maintain an employee’s health insurance benefits during the period of leave, but do not require the accrual of seniority or other benefits during their leave as if they had not taken leave;
4) Both statutes require completion of a notice to the employer and a medical certification form prior to commencing leave;
5) Both statutes require 30 days’ notice of foreseeable leave, or as much notice as is practicable;
6) Both statutes prohibit retaliation against an employee for requesting or for receiving leave benefits; and
7) Leave benefits under the FMLA must be used concurrently with paid leave benefits under PFLBL, unless the employer permits otherwise.30
Differences Between PFLBL and FMLA
Despite the similarities between the two statutes, there are crucial differences between PFLBL and FMLA that employers should be aware of. These include:
1) Many more employees are covered by PFLBL than by FMLA, for two reasons. First, PFLBL applies to any employees of employers covered by the New York State Workers’ Compensation Law, regardless of the size of the employer. In contrast, FMLA covers only employees working for employers with 50 or more employees in a 75-mile radius.31 Second, employees are covered by PFLBL after 26 weeks, or six months, of employment commencing on the 175th day of employment with the employer. Under the FMLA, employees must be employed for 12 months and for at least 1,250 hours in the 12-month period preceding the leave.32
2) The PFLBL provides paid leave benefits to eligible employees by amending the New York Workers’ Compensation Law. Paid leave benefits under PFLBL will be financed by deductions from employee pay and will cover the gap between workers’ compensation benefits, state disability benefits, and private disability insurance.33 However, PFLBL provides neither paid benefits nor a leave of absence for the employee’s own serious health condition. The FMLA, in contrast, does not provide any paid benefits, but does provide an unpaid leave of absence to covered employees for their own serious health condition, as well as for all the family leave categories covered by PFLBL.34
3) As written, PFLBL allows an employer to require an employee to choose between using accrued but unused paid time off under the employers’ policies and paid family leave. Under FMLA, but not PFLBL, an employer may compel an employee to substitute paid time off for unpaid family and medical leave.35
4) The FMLA provides several additional provisions regarding service member leave beyond exigent circumstances arising because a family member is called into active military service, such as leave to care for a family member who is a member of the United States Armed Services, elaborating required notice of military leave, or addressing circumstances when two spouses employed by the same employer are called into active military service.36 While PFLBL covers family leave arising from a family member being called into active duty, it does not yet address these additional scenarios.
Recommendations for Employers
While PFLBL represents a major change in the law concerning family leave for New York employers, its substantive provisions do not take effect until January 1, 2018, giving employers significant lead time to prepare. The Chair of the Workers’ Compensation Board is tasked with issuing interpretive regulations, which should provide businesses with some much-needed clarification prior to the benefits' requirements taking effects.
Employers should take advantage of this lead time to prepare their payroll function to add another deduction for family leave benefits, in an amount to be determined, and to consult experienced employment counsel to amend their paid time off, leaves of absence and family and medical leave policies to comply with the new law.
1 See Stephen A. Fuchs, Minimum Wage Increases in New York: What Employers Should Know, Littler Insight (Apr. 18, 2016).
2 New York State Budget, S. 6406-C, A. 9006-C (Apr. 4, 2016) at Part SS.
3 Unlike the workers’ compensation laws of most states, New York’s statute provides employees up to 26 weeks of disability benefits (income protection) for non-work-related illness or injury, as well as a comprehensive system of benefits for work-related illness and injury.
4 Employees regularly in the employ of a single employer who work a schedule that is less than the employer’s normal work week becomes eligible for paid family leave on their 175th work day for that employer. N.Y. W. Comp. L. § 203.
5 N.Y. W. Comp. L. § 201(15).
6 N.Y. W. Comp. L. §203.
7 See N.Y. W. Comp. L. § 2.3.
8 N.Y. W. Comp. L. §§ 203, 203-b.
9 29 U.S.C. § 2611(2)(b)(ii).
10 29 U.S.C. § 2611(2)(a).
11 N.Y. W. Comp. L. § 203.
12 In 2015 the NYSAWW was $1,296.48. If the NSAWW were the same for 2018, the maximum weekly paid leave benefit would be $648.24.
13 N.Y. W. Comp. L at § 204(2)(a).
14 N.Y. W. Comp. L. §§ 204(2)(a).
16 See 29 C.F.R § 825.202 – 205.
17 N.Y. W. Comp. L. § 209(b).
18 N.Y. W. Comp. L. § 203-c.
19 See 29 U.S.C. § 2614(c); 29 C.F.R. §§ 825.209, 825.210, 825.212(b), 825.213.
20 N.Y. W. Comp. L. § 203-a.
21 N.Y. W. Comp. L. § 205.2.
22 N.Y. W. Comp. L. § 205(b)
23 N.Y. W. Comp. L. § 205(c).
24 Id.; N.Y. W. Comp. L. § 237. This differs from the FMLA, which permits employers to compel employees to substitute accrued but unused paid time off for FMLA leave. See 29 U.S.C. § 2612 (d)(2).
25 N.Y. W. Comp. L. § 205(c).
27 N.Y. W. Comp. L. § 205.4.
28 The term “administrative leave” is not defined in the statute. Subsequent regulations may clarify what constitutes “administrative leave.” For example, the statute does not address whether an employee’s suspension pending an investigation for misconduct is an “administrative leave.”
29 N.Y. W. Comp. L. § 206.3.
30 See N.Y. W. Comp. L. §§ 203-a , 203-b, 203-c, 205.5, 206.4; 29 U.S.C. §§2612(a)(1), 2614(a)(1),(2), 2614(c)(1),(3); 2612(e).
31 N.Y. W. Comp. L § 203; 29 U.S.C. § 2611(2)(B)(ii).
32 N.Y. W. Comp. L. § 203; 29 U.S.C. §2611(2)(A).
33 N.Y. W. Comp. L. § 209(3)(b).
34 29 U.S.C. § 2612(a)(1).
35 N.Y. W. Comp. L. §205(c); 29 U.S.C. § 2612 (d)(2).
36 See 29 U.S.C § 2612(a)(3), (e)(3), (f)(2). Under the FMLA, employees may take up to 26 weeks of unpaid family leave in a 12 month period to care for a family member who is a service member. 29 U.S.C. § 2612(a)(3).