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New York State Enacts Nation’s Most Generous Paid Family Leave Law Effective January 1, 2018

Earlier this month Governor Cuomo signed into law New York’s Paid Family Leave Act, which, when fully implemented, will provide virtually all employees in the state up to 12 weeks of paid family leave.  Under the law, employees will be entitled to paid leave to (1) care for a family member (including a child, parent, grandparent, grandchild, spouse or domestic partner) with a serious health condition, (2) bond with the employee’s newborn or newly placed adoptive or foster child during the first 12 months following birth or placement, or (3) address any qualifying exigency relating to a spouse, domestic partner, child or parent who is serving on active military duty. Notably, the law relies on employee payroll deductions to fund the paid family leave benefit, but does not require any similar contribution from employers.

The law also provides job protections, entitling an employee who returns from leave to be restored to the same or a comparable position. Additionally, employers must maintain existing health benefits for employees while they are on family leave.  While these protections track closely with the family leave provisions of the federal Family and Medical Leave Act, New York’s law covers a broader group of employees than the FMLA, albeit only for family leave. It does not provide an employee paid leave to care for his or her own medical condition.


Eligibility and Benefits 

The law will apply to all employees who are covered by the state’s temporary disability insurance law, regardless of their employer’s size, and who have been employed for 26 or more consecutive weeks. The family leave benefits, which become effective on January 1, 2018, will initially provide a maximum of 8 weeks of leave during any 52-week period and provide for payment of 50% of the employee’s average weekly wages (not to exceed 50% of the state’s average weekly wage) during that time.  These benefits will gradually increase until January 1, 2021, when the length of the benefit period will be capped at 12 weeks and the payment of benefits will be capped at 67% of the employee’s average weekly wages (not to exceed 67% of the state’s average weekly wage).

 Key Takeaways for Employers

Because employers are not responsible for any new financial contributions under the law, the primary impact will be on employers with fewer than 50 employees who are not subject to federal FMLA, and therefore previously had no obligation to provide employees with extended leaves of absence for family reasons. Because such employers will now be required to restore employees returning from leave to their previous (or equivalent) positions, they may find that temporary workers are their best option for covering shifts when employees exercise their rights to take leave under the new law. Although the benefits do not take effect until 2018, all employers should begin familiarizing themselves with the law’s requirements, reviewing existing paid time off policies to ensure compliance and preparing to update payroll systems as necessary to account for employee contributions.

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Alexander K. Song is a Mintz Associate whose practice focuses on all aspects of executive compensation, including drafting of equity and incentive compensation plans and award agreements. Alex also handles employment, change-in-control, and severance arrangements for executive officers.