On April 4, Governor Andrew Cuomo signed into law an unprecedented bill establishing a state-wide paid family leave program, adding New York to the short roster of states—including California, New Jersey, and Rhode Island—that guarantee paid family leave.

The law, part of the 2016-2017 State Budget, allows workers across New York State to take paid leave (1) to bond with a new child (during the first 12 months after the child’s birth or adoption or foster placement of the child with the employee); (2) to care for a family member with a serious health condition; or (3) in certain situations arising from a family member’s participation in military active duty.

The law will be phased in over the course of several years.  In 2018, workers will be eligible for up to eight weeks of leave; in 2019 and 2020, up to 10 weeks; and starting in 2021, up to 12 weeks.  In 2018, employees will receive 50 percent of their average weekly wages, capped at 50 percent of the statewide average weekly wage.  Over the following three years, this amount will increase to 67 percent of the employee’s average weekly wage, capped at 67 percent of the statewide average weekly wage.

New York’s new policy covers workers regardless of their employer’s size (federal FMLA for unpaid family leave applies only to employers with 50 or more employees) and regardless of the employee’s full-time or part-time status (FMLA leave is available only to full-time workers).  Additionally, the New York paid leave program covers workers who have worked for their employers for six months or more (less than the twelve months required for FMLA eligibility).  Small businesses operating with just a few employees will likely be impacted the most by this law because a smaller workforce will have to absorb the work of the employee on extended leave.  Businesses, especially small businesses, are urged to plan ahead and have policies and procedures in place to seamlessly handle extended employee leave.

The actual pay received by employees while on leave will be funded by nominal employee payroll deductions.  In other words, employers will not have to pay employees directly.  However, employers should prepare for the administrative costs of compliance, including the drafting and implementation of new policies as well as the costs stemming from extended employee absences.  Despite these costs and challenges, however, advocates of the new law argue that workers who do not have to worry about affording diapers for their newborn or rushing back to work within days of childbirth, for example, will return to work as more engaged, healthy, and productive.  The true impact remains to be seen.

Employers are encouraged to begin preparing for the new family leave policy before it takes effect.  Please contact us with any questions and for compliance guidance.