Beginning in January, private employers in New York — regardless of size — will have to provide paid family leave to eligible employees.
The leave will be funded through employee payroll deductions that will start sometime after July 1. While employers won’t have to foot the bill, they will have to plan for the absence of employees and take other issues into account, such as how to collect the employee portion of health insurance premiums while workers are on leave.
Employers should start preparing now.
“For employers in New York this is definitely coming and they’ll have to plan for it,” says Harry J. Holzer, a professor of public policy at Georgetown University and a nonresident senior fellow at the Brookings Institution in Washington, D.C.
Beginning Jan. 1, eligible employees will be entitled to up to eight weeks of paid leave at 50 percent of their average weekly wage. By 2021, the benefit will increase to 12 weeks at 67 percent. Employees can use the leave to bond with a child, care for a relative who is ill or relieve family pressures when a relative is called to active military service. They are guaranteed to be able to return to their job and continue their health insurance.
There’s been talk about paid family leave on the federal level, including President Donald Trump calling for it in his recent speech to Congress. And during his campaign, Trump talked about funding paid maternity leave by eliminating waste and fraud in other programs.
But Holzer says, “I don’t know if there will be any room on top of all the tax and budget proposals to carve out something.” He also feels “we’re a long way off from a federal version of what Trump has proposed.”
Only 14 percent of the U.S. workforce currently has access to employer-paid family leave, according to The Boston Consulting Group, which recently released a report on why family leave is good for business.
“Employees and their families clearly benefit,” says Trish Stroman, a Washington, D.C.-based partner at BCG and co-author of the report. “But so do employers — with increases in recruitment, retention and productivity, most employers said the benefits outweighed the costs.”
Still, the New York law is causing some concern among smaller employers, says Barbara DeMatteo, director of human resources consulting at Portnoy, Messinger, Pearl & Associates in Jericho.
Under the federal Family and Medical Leave Act, certain employers with 50 or more employees had to offer up to 12 weeks of unpaid leave, but under the new state law, even the smallest employer must offer paid leave for eligible employees and there’s concern over how those jobs will get done in their absence, she says.
Her advice: Make sure jobs are well defined and start cross-training people, so someone else will be able to temporarily handle those duties.
She also suggests having a written paid family leave policy. It should encourage employees to give at least 30 days notice, and include an outline of their financial responsibilities while on leave including contributions to health care coverage, says Keith Gutstein, a partner at the law firm of Kaufman Dolowich & Voluck in Woodbury.
Many companies aren’t fully aware of New York’s mandate, he says, but they will start to take notice this summer, when payroll deductions begin and employees start asking questions.
Patrick Nolan, owner of Café Revue at the Book Revue in Huntington, has been a strong advocate for the new law. He has fewer than 10 employees at the cafe, but was already offering two weeks paid parental leave at his own expense.
“Creating a program that allows time to care for our loved ones . . . with a small payroll tax centralizes the burden of funding and gives working men and women the economic stability and time they deserve,” he says.
Percentage of employees who said they would rather have more parental leave than a pay raise
Source: Deloitte survey