NEW YORK (Legal Newsline) - New York Governor Andrew Cuomo signed a new Family and Medical Leave Act that will provide the nation’s most comprehensive paid family leave program to New York employees but may present serious challenges for employers.
“Financially this is going to be very difficult, particularly for the medium- and smaller-size businesses,” Mary Gambardella, of Wiggin and Dana LLP, told Legal Newsline.
Gambardella is a partner in the Stamford, Conn., office of Wiggin and Dana and is a member of the both the Connecticut and the New York bar associations. She is the chair of the firm's Labor, Employment and Benefits Department.
“You will see some domino effect,” Gambardella said. “The price of products may increase, wages may hold steady, there may have to be decreases in other benefits.”
Under the new legislation, all employees in New York will be eligible for 12 weeks of partially paid leave to care for a new child, a family member with a serious health condition, or family issues resulting from a family member called into active military service.
Benefits apply to all employees, whether full- or part-time, after they have worked for a particular employer for at least six months. By contrast, the federal FMLA requires 12 months or 1,250 hours before benefits kick in.
“It applies to everybody and that’s the lynchpin here, that’s what’s going to make this tough,” Gambardella said.
Unlike the federal regulations, New York’s new law applies to every business regardless of the number of employees. The federal FMLA applies only to businesses with 50 employees or more.
“There’s definitely a transition period here for employers to start to budget for this and worry about this,” Gambardella said.
Benefits roll out in phases, starting on Jan 1, 2018, employees will be eligible for up to eight weeks of paid leave at 50 percent of their weekly wage. Leave time and wage percentages will increase every year until the law is fully implemented in 2021, when employees will be eligible for 12 weeks of leave at 67 percent of their weekly wage.
Some of the funding for this program will come from a new payroll tax that will also grow each year, starting at $0.70 and ending with $1.40 per week. In theory, this means that employers will not have to pay anything to give the worker this benefit, but some simple math shows that a program that gathers about $52 per year from each employee is unlikely to pay for itself.
Despite these challenges, other states are likely to follow suit, Gambardella said.
California, New Jersey and Rhode Island already have state family and medical leave regulations, and the Connecticut legislature has started to investigate the idea.