State Paid Family Leave Updates: California, Massachusetts and New York
California: Family and Medical Leave Updates
On September 17, 2020, Governor Newsom signed into law SB 1383 which makes significant changes under two of the state’s existing family and medical leave entitlements. First, the new law expands the California Family Rights Act (CFRA) to apply to small employers, as well as expands the definition of family members and the reasons for job protected leave. These changes take effect on January 1, 2021. Secondly, as a result of the changes made by the CFRA amendments, the state’s New Parent Leave Act will sunset. Following is a summary of these two changes.
Expansion of California Family Rights Act (CFRA)
Following are highlights of the changes made by SB 1383 to the CFRA provisions.
- Covered employer. Currently, California’s Family Rights Act (CFRA) applies to employers with 50 or more employees on each working day during each of 20 or more calendar workweeks in the current or preceding calendar year. Beginning January 1, 2021, the CFRA applies to employers with 5 or more employees.
- Eligible employees. Employees are eligible for CFRA leave if they have at least 12 months of service, worked at least 1,250 hours during the 12-month period prior to the commencement of the leave, and work at a worksite with at least 50 employees employed within 75 miles. Beginning January 1, 2021, the 75-mile geographic criterion no longer applies.
- Use of leave. Under current law, an employee may use CFRA leave for the birth, adoption or foster care of a child, for the care of family member with a serious health condition or for one’s own serious health condition. For this purpose a family member includes a child, spouse, parent or registered domestic partner. Beginning January 1, 2021, family member is expanded to include a grandparent, a grandchild and a sibling.
Beginning January 1, 2021, CFRA leave is expanded to include a qualifying exigency related to the covered active duty, or call to covered active duty, of an employee’s spouse, domestic partner, child, or parent in the Armed Forces of the United States.
Under current law, parents working for the same employer can be limited to a total of 12 weeks for baby bonding. Beginning January 1, 2021, each parent is entitled to 12 weeks of leave for baby bonding.
- Job restoration. An employee returning to work from CFRA leave is entitled to the same seniority, and to the same or a comparable position, upon return from leave. An exception applies to an employee who is among the highest paid 10% of employees within 75 miles of the employee's worksite. This key employee could be denied reinstatement to the same or equivalent position. Effective January 1, 2021, the key employee restoration exception no longer applies.
As a reminder, health coverage must continue for the duration of the leave and other benefits must be restored upon return.
- Posting requirement. An employer must provide notice to its employees of the right to request CFRA leave, as well as post a notice of CFRA rights in a conspicuous place where employees tend to congregate. Electronic posting is also acceptable. In addition, a description of CFRA leave must be included in any employer handbook. Small employers, newly subject to the law, will want to be aware of this obligation. The state’s Fair Employment and Housing Department provides model workplace postings and other employer resources. Note: As of the time of this writing, the current model CFRA posting has not been modified to reflect the changes made by the new law.
Changes for New Parent Leave Act (NPLA)
The New Parent Leave Act (NPLA) requires small employers (those employing between 20-49 employees) to provide eligible employees up to 12 weeks of job protected, unpaid leave for baby bonding. As a result of the changes made by the above CFRA amendments that begin January 1, 2021, the provisions of the current New Parent Leave Act are, in effect, duplicate, to the rights and benefits provided under the amended CFRA; and thus, the law will be repealed, effective January 1, 2021.
2021 Updates: Massachusetts Paid Family Leave Program
The Massachusetts Paid Family and Medical Leave law provides paid leave to eligible employees for one’s own illness beginning January 1, 2021, and for baby bonding, to care for a family member with a serious illness, and for certain military considerations beginning July 1, 2021.
Generally, the program is funded by premiums paid by employers and employees but a private plan can be used in lieu of the state plan. Employers are required to make contributions to a trust fund at a contribution rate of 0.75% on the first $132,900 of an individual’s annual earnings. The 0.75% contribution rate is split between a 0.62% medical leave contribution and a 0.13% family leave contribution.
- Employers with 25 or more Massachusetts employees must remit the entire 0.75% contribution to the trust fund. Such employers may deduct 100% of the family leave contribution, and 40% of the medical leave contribution from employees. The employer must pay the remaining 60% of the medical leave contribution.
- Employers with 24 or fewer Massachusetts employees are not obligated to pay the 60% employer share of the medical leave contribution. Such employers need only remit the remaining 40% employee share of the medical leave contribution, and 100% of the employee’s family leave contribution, all of which may be deducted from the wages of employees.
The Massachusetts Department of Family and Medical Leave recently announced that it will not make adjustments to the contribution rate, nor the maximum weekly benefit amount, until October 2021. Accordingly, the following rates will remain in effect for calendar year 2021:
- The contribution rate will remain at 0.75%.
- The maximum weekly benefit amount will remain at $850 per week.
The Department provides a detailed explanation on calculating contributions, as well as additional information about the PFML program on its dedicated webpage for employers.
2021 Updates: New York Paid Family Leave Program
The New York Department of Financial Services (DFS) announced updates to the state-wide paid family leave benefit program for 2021. As a reminder, The New York paid family leave law provides paid time off for baby bonding, to care for a family member, or military exigency. Beginning in April, 2020, the law was expanded to allow employees to use paid family leave in the event they, or their minor dependent child, are under an order of quarantine or isolation due to COVID-19.
The paid family leave benefit is fully funded by employees through a payroll deduction. At its discretion, the employer can choose to pay all or a portion of the cost of the program. Beginning January 1, 2021:
- Eligible employees are entitled to take up to 12 weeks of paid leave.
- The contribution amount will increase to 0.511% of an employee’s gross wages each pay period, with a maximum annual contribution cap of $385.34. Employees earning less than the current statewide average weekly wage of $1,450.17 will contribute less than the annual cap, consistent with their actual wages.
- The benefit amount will increase to 67% of an individual’s average weekly wage, up to a cap of 67% of the current statewide average weekly wage amount. The maximum weekly benefit for 2021 will be $971.61.
Updated Employer Resources. The DFS provides updated materials and templates to assist employers in communicating these 2021 updates to their workforce, including:
Additional information about the New York Paid Family Leave Program is available on the state’s dedicated webpage.
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.