New York Introduces Paid Family Leave and $15.00 Statewide Minimum Wage

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On March 31, 2016, New York Governor Cuomo signed the 2016-2017 State Budget, which includes two components that will heavily affect New York Employers: the Paid Family Leave Benefits law and $15.00/hr statewide minimum wage.

A. Paid Family Leave Benefits Law

Effective January 1, 2018, New York will have the most comprehensive paid family leave (PFL) benefit in the United States.  PFL is a worker-funded disability program and is not paid by employers.  Employees who have worked for 26 or more consecutive weeks for a covered employer will be eligible for up to 8 weeks of partially paid leave, increasing each year to a maximum of 12 weeks by January 1, 2021, based on the below schedule.

Date Length of Benefits Within a 52-Week Calendar Period Amount of Benefits
January 1, 2018 8 Weeks 50% of average weekly wage, not to exceed 50% of the state average weekly wage
January 1, 2019 10 Weeks 55% of average weekly wage, not to exceed 55% of the state average weekly wage
January 1, 2020 10 Weeks 60% of average weekly wage, not to exceed 60% of the state average weekly wage
January 1, 2021 12 Weeks 67% of average weekly wage, not to exceed 67% of the state average weekly wage

Eligible employees can take a total of 26 weeks of disability benefits, including PFL, within a consecutive 52-week calendar period.  Unlike other New York disability benefits, employees will not be subject to a waiting period before becoming eligible for PFL benefits.  However, employers will still be able to establish policies prohibiting multiple employees from receiving PFL benefits at the same time while caring for the same family member.

Employers are prohibited from requiring employees to expend their accrued, unused vacation or paid time off (PTO) while receiving PFL benefits, though employees may voluntarily choose to do so; in that event, employers may request reimbursement for any PFL benefits received while the employer pays for vacation or PTO.  Employers are prohibited from retaliating against employees who have applied for PFL benefits.  Employers must reinstate employees to the same position they held prior to the leave commencement, or a comparable position.

 

B. Increased Minimum Wage

New York’s minimum wage will gradually increase from the current statewide $9.00 per hour to a maximum of $15.00 by 2019 according to the below schedule.  New York City, which has higher costs of living, will increase more rapidly than the rest of the state.

Effective Date Statewide (Excluding NYC) New York City
December 31, 2015 $9.75 $10.50
December 31, 2016 $10.75 $12.00
December 31, 2017 $11.75 $13.40
December 31, 2018 $12.75 $15.00
December 31, 2019 $13.75
December 31, 2020 $14.50
July 1, 2021 $15.00

Employees may receive a tipped minimum wage provided that the tips and employee’s wages together equal or exceed the minimum wage in effect for that location.

Lastly, the Division of Budget (DOB) will conduct an annual analysis of the state economy in each region of New York on or after January 1, 2019, and provide a report to the Commissioner of Labor to help determine whether or not the wage increase should be temporarily suspended.

Action Items:

  • Review current family and medical leave policies to ensure compliance with the Paid Family Leave Benefits requirements.
  • Review your organization’s budget to plan for future labor expenses with the minimum wage increase.
  • Adjust wage rates, if necessary.
  • Review collective bargaining agreements with covered employees to assess impact, if any, of the minimum wage and PFL benefit upon contractual obligations.
  • Contact ManagEase at (888) 230-3231 for assistance in adjusting handbooks or leave policies to comply with the new requirements.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser.

© 2016 ManagEase, Incorporated.

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