While the state of New York enacted a paid family leave law last year, the state’s governing agencies recently released implementation guidance to assist employers with their compliance under the law, which takes effect on January 1, 2018. On the other side of the coast, Governor Inslee signed a law to enact a state-wide paid family and medical leave program in the state of Washington.
- New York Paid Family Leave Law Update
Beginning January 1, 2018, all private-sector New York employers, regardless of size, must provide paid family leave to their full and part-time employees after 26 consecutive weeks of employment (for a summary of the law, see New York Paid Family Leave, Benefit Beat, 5/5/16). The paid family leave program provides for, ultimately, up to 12 weeks of leave for baby bonding, to care for a family member, or military exigency. The program is fully funded by employees through payroll deductions.
Because this law builds on New York’s existing temporary disability insurance law, the paid family leave benefits may be obtained in one of three ways: through an insured disability plan or rider issued by a carrier authorized to do business in New York, a plan issued by the New York State Insurance Fund, or an approved self-insured plan authorized by the New York State Workers Compensation Board.
The amount of the employee contribution is set by the New York Department of Financial Services and is subject to annual indexing. Accordingly, the employee contribution for coverage beginning January 1, 2018 is set at 0.126% of an employee’s weekly wage, not to exceed 0.126% of the state’s average weekly wage, which equates to approximately $1.64 per week. An employer may, but is not required, to begin collecting these payroll deduction amounts on or after July 1, 2017.
It is important to note that if other state or federal leave law, such as Family and Medical Leave Act (FMLA), apply in a given situation, this paid family leave must be coordinated with such law.
Recently, both the New York Workers' Compensation Board and Department of Financial Services adopted final regulations implementing the paid family leave program providing details relating to eligibility, coverage, the phase-in schedule and claim procedures. Additional information about the program can also be found on the state’s dedicated Paid Family Leave website.
Next steps for employers. The most important thing for an employer doing business in the state of New York is to contact its state temporary disability insurer to begin the process of purchasing a paid family leave policy, or pursue one of the other options described above. In this process, the employer should discuss what, if any, withholding it should begin collecting from its employees. The employer may choose to pay the full premium itself but it has the right to collect from its employees. Generally, if the benefit is made available by an insured product, the insurer is responsible for determining eligibility for leave available under this program.
- Washington Enacts Paid Family and Medical Leave Program
On July 5, 2017, Washington joined a handful of states mandating paid family and medical leave. The new leave law (SB 5978) is funded by both employers and employees, and employees will be eligible to receive benefits beginning January 1, 2020. While the Washington Legislature enacted a paid family leave program in 2007, the law was never implemented and then further postponed by subsequent legislative efforts.
Under the new law, all Washington employers, regardless of size, must provide for paid family and medical leave benefits; however, small employers employing fewer than 50 employees can opt out. Further, the law provides an option for certain small-sized employers the ability to request a grant of financial assistance from the state in order to pay the benefit.
Generally, an eligible employee is one who has completed a minimum of 820 hours in a qualifying period, defined as the first four of the last five completed calendar quarters.
Reasons for leave. A qualified employee is entitled to 12 weeks of family leave for the following events:
- To attend to the employee’s own or his/her family member’s serious health condition;
- Baby bonding; or
- A qualifying exigency relating to a family member’s military service, as defined by the Family and Medical Leave Act (FMLA).
The amount of combined family and medical leave is capped at 16 weeks per 12-month period, although, an additional 2-week leave period is available if an employee experiences a pregnancy-related serious health condition resulting in incapacity, for a combined total of 18 weeks.
For this purpose, family member includes child (biological, adopted, foster, or step or a child to whom the employee stands in loco parentis, is a legal guardian, or is a de facto parent), grandchild, grandparent, parent, sibling, or spouse of an employee.
Job restoration. An employee returning from leave is entitled to be returned to the same or an equivalent position.
Benefits during leave. Generally, benefits accrued as of the date the leave begins must be restored upon return to work. To the extent that the FMLA applies, health benefits must be continued for the duration of the leave in accordance with the FMLA.
Amount of benefits and funding. To receive the benefit, individuals must file an application and would be subject to a one-week waiting period, except in the event of birth or adoption. The weekly benefit amount may be up to 90% of the employee’s average weekly wage with certain other limits applying to higher earners and a maximum cap of $1,000 for 2020.
The premium for the program will be 0.4 percent in 2019 with the employer paying 37.5% and the employee paying 62.5%. Employers may seek a waiver of the premium requirement for certain employees located outside Washington or employed on a limited or temporary schedule.
Notice obligations. Employees are required to provide notice of their intent for the leave, whether foreseeable or not. In addition, employers are subject to a workplace posting requirement, and other notices upon an individual’s need for leave.
Coordination with other leave laws. This leave runs concurrently with other permitted leave laws such as the federal FMLA.
As the effective date of this law approaches, regulations are likely to be issued further defining its implementation.
The information contained in this article is provided as general guidance and may be affected by changes in law or regulation. This article is not intended to replace or substitute for accounting or other professional advice. Please consult a CBIZ professional. This information is provided as-is with no warranties of any kind. CBIZ shall not be liable for any damages whatsoever in connection with its use and assumes no obligation to inform the reader of any changes in laws or other factors that could affect the information contained herein.