by Marti Cardi, Esq. - Senior Compliance Consultant and Legal Counsel
& Gail Cohen, Esq. - Assistant General Counsel,
April 12, 2016
As the federal government dithers, states and municipalities continue to be proactive in passing paid family leave laws (PFLs). Read on for information about the laws passed by the latest members of the club, San Francisco and New York State. In addition, California has passed a law to increase the percentage of salary compensation available for paid family leave under the existing California law. This article provides:
- A short overview of each of the new laws (New York, California, San Francisco);
- Pings for employers: What YOU need to do to get ready; and
- Summaries of the key provisions of the New York and San Francisco laws;
- How Matrix can help employers comply with these and other leave of absence laws, paid or unpaid.
There will likely be regulatory updates as the various state and municipal agencies provide further guidance to employers on how to comply with these new laws. Matrix will keep you up to date as we move toward each law’s effective date.
New York Paid Family Leave OverviewEffective January 1, 2018, New York employers will be required to provide paid family leave benefits to eligible employees. This law was passed as part of the state’s 2016 budget and is another benefit available in addition to the state’s worker’s compensation and employee disability pay benefits.
The New York paid family leave law (NY PFL) is one of the most progressive proposed or passed, providing up to 12 weeks of job-protected paid family leave after a phase-in period. The law dovetails to a large extent with leave rights under the federal Family and Medical Leave Act but in some regards will provide more leave rights, which might result in greater leave time in a 12-month period than the 12 weeks provided separately by each law.
EXAMPLE: NY PFL will be available to care for a domestic partner, grandchild, or grandparent, which is not available under the FMLA. A New York employee who takes leave to care for one of these family members would still have his or her full entitlement to 12 weeks of unpaid, job-protected leave for a different family member or another reason under the FMLA.
California Paid Family Leave OverviewOn April 11 California Governor Jerry Brown signed a law increasing the pay benefit available to California employees for family leave from 55% to 60%, and as high as 70% for a new classification of low-income workers.
Effective January 1, 2018, the law also eliminates the current 7-day waiting period currently imposed prior to an employee’s eligibility to receive benefits.
California’s PFL program is funded by worker contributions and is administered by the state’s Employment Development Department, which also administers the state’s short term disability benefits. Reports indicate that EDD has enough in savings from workers’ contributions to cover the additional benefits that will commence in 2018.
Other material aspects of the existing CA PFL remain unchanged at this point.
San Francisco Paid Parental Leave OverviewSan Francisco recently took paid family leave benefits to a new level, providing an increase in salary replacement benefits to eligible San Francisco employees who take leave for a newborn or newly adopted or foster child (San Francisco Paid Parental Leave – SF PPL). Unlike the state programs in California and New York, the new San Francisco ordinance does not cover leave taken to care for an ill or injured family member.
As summarized above, California already has paid family leave benefits (CA PFL), under which employees can receive up to 55% of their wages for six weeks for this bonding time. This amount will increase to 60-70% as of January 1, 2018. The San Francisco ordinance will enable SF employees to receive full 100% salary replacement during such leave. The new ordinance goes into effect on January 1, 2017.
The San Francisco ordinance has some provisions that provide additional rights to California employees.
New York State Paid Family Leave – Key Provisions
| QUESTION | ANSWER |
| Who is an Eligible Employee? | An employee who has worked for 26 or more consecutive weeks. |
| For what reasons can family leave be taken? | a) To participate in providing care, including physical or psychological care, for a family member of the employee made necessary by a serious health condition (as defined by the FMLA) of the family member; or b) To bond with the employee’s child during the first 12 months after the child’s birth or placement of the child for adoption or foster care with the employee; or c) Because of any military “qualifying exigency,” as defined by the federal FMLA. |
| Who is a “Family Member?” | a) Child (biological, adopted or foster step, legal ward), child of a domestic partner, or a person to whom the employee stands in loco parentis; b) Parent (biological, foster, adoptive, in law, step, legal guardian), or other person who stood in loco parentis to the employee when the employee was a child; c) Grandparent (biological only); d) Grandchild (biological only); e) Spouse; or f) Domestic Partner |
| Can I require certification of need for leave before granting my employee’s request to take it? | Yes. The certification is more limited than what is permitted under the FMLA. A statement of proof of need for leave is sufficient, including a statement of disability by the family care recipient’s healthcare provider. |
| Can I deny leave if my employee doesn’t timely provide me with that medical certification? | No, but if the employee fails to furnish proof within the time or manner requested by the employer, no benefits are required to be paid for the 2 weeks prior to the date on which the required proof is furnished. |
| Do I as an employer have to pay for these benefits? | No. These benefits are funded by employee contributions (1 ½% of employee’s weekly wages, not to exceed 60 cents/week) through payroll deductions. |
| How much leave can my employee take? | The amount of leave an employee can take increases over time, as follows:
1/1/2018 8 weeks 1/1/2019 10 weeks 1/1/2020 10 weeks 1/1/2021 12 weeks |
| Is the paid leave benefit a complete wage replacement? | No. As with the amount of leave to be made available, the amount of paid benefits increase annually as follows:
1/1/2018 50% of the avg. weekly wage 1/1/2019 55% of the avg. weekly wage 1/1/2020 60% of the avg. weekly wage 1/1/2021 67% of the avg. weekly wage |
| Can the employee also take PTO or other sick leave benefits to enable them to maintain 100% of his salary while on leave? | The employer can choose to allow employees to take vacation, sick or other benefits while on leave, but may not require them to do so. However, if an employee uses vacation or other paid time, the employer can request reimbursement for any NY PFL benefits received during that time. |
| Can I run this leave concurrently with my employee’s right to take 12 weeks of leave under the federal FMLA? | Yes, if the leave reason is covered under both laws. |
| Can this leave be taken intermittently? | Yes, and successive periods of family leave caused by the same or a related injury or illness count as a single period if separated by less than 3 months. |
| Is there a “waiting period” before paid benefits are payable? | No. Unlike typical disability payments, which have waiting or elimination periods, benefits are payable on the first full day family leave is required. |
| Are there any exclusions? | Yes, there are several enumerated exclusions, including for any disability or family leave commencing prior to the employee’s eligibility for NY PFL. |
| Are there any employer notice requirements? | Yes. Employers will be required to post notice of employee rights to this leave, in the prescribed form.
In addition, employers must give a written statement of rights to the employee within 5 business days of receiving notice that the employee’s absence of 7 consecutive days is due to family leave. |
| Is the NY PFL a job protected leave? | Yes. Like the federal FMLA, employees are entitled to be restored to the same or a comparable position when they return to work following a NY PFL. |
| Do I have to maintain health insurance benefits coverage while the employee is on NY PFL? | Yes. |
| Does the employee have a right to file a claim for retaliation for exercising his or her right to take or request NY PFL? | Yes. |
San Francisco Paid Parental Leave – Key Provisions
| QUESTION | ANSWER |
| Who is an eligible employee? | A full-time, part-time, or temporary employee who:
a) Has worked at least 180 days and works at least 8 hours per week; and b) Is otherwise eligible under CPFL for baby bonding leave; and c) Works at least 40% of his/her work hours in San Francisco. |
| How much do I have to pay as employer? | Employers must pay benefits which, together with CA PFL benefits received by the employee, will provide the employee 100% wage replacement during the leave (referred to in the ordinance as “Supplemental Compensation”). |
| Can I require the employee to use accrued, unused vacation time before using paid leave? | Yes, the employer can require the employee to use up to 2 weeks of accrued unused vacation time prior to receiving SF PPL, thereby capping the employer’s obligation to 4 of the 6 weeks the employee takes paid parental leave |
| Does the employee have any reimbursement obligations if he or she doesn’t remain employed after returning from leave? | Yes. Prior to receiving SF PPL, the employee is required to sign a form agreeing to reimburse the employer for the full benefit amount if he or she voluntarily terminates employment within 90 days of returning from leave (requires employer to explicitly request reimbursement in writing). |
| Are there any employer posting requirements? | Yes. Employers are required to post a notice of SF PPL rights to employees in the OLSE prescribed form. |
| What are the record retention requirements? | Employers must retain records of their compliance with this ordinance for 3 years. |
| In addition to leave rights, does SF PPL grant any other employee protections? | Yes. The law protects employees from any adverse action in connection with, or retaliation for, their exercise of leave rights. |
| Does the ordinance provide employees with a private right of action? | Yes, but primary authority for enforcement, including auditing of compliance, rests with the Office of Labor Standards Enforcement (OLSE). In addition, employees must exhaust their administrative remedies by filing a complaint with OLSE prior to filing a private lawsuit. |
| What are the possible penalties for violations? | The law provides for potential treble damages for any unpaid Supplemental Compensation, as well as other administrative penalties. |
Pings for employers: Prepare in advance! If you have employees in New York state or San Francisco, make sure you have adopted policies to comply with the two new laws (effective January 1, 2018, and January 1, 2017, respectively);
Have your payroll personnel start working on the necessary steps to administer the new NY PFL and the increased benefit for CA PFL, including the requisite payroll deductions; and SF PPL, including making the correct pay benefits when an employee is on leave.
Finally, plan for costs associated with administering the laws and covering increased employee absences. In San Francisco, this will include budgeting for the employer’s responsibility for pay benefits during leave, up to 100%.
MATRIX CAN HELP! Matrix Absence Management provides leave, disability, and accommodation management services to employers seeking a comprehensive and compliant solution to these complex employer obligations. At Matrix we monitor the many state and municipal paid family and sick leave laws being passed around the country and will post updates in this blog as this area of employee benefits progresses. In addition, our clients receive Matrix’s monthly Legislative Update, which pulls together these and other leave law developments in a concise and timely format. With the passage of each new leave law – paid or unpaid – Matrix assesses employer needs and industry demands to determine whether administration of the new law should be added to Matrix’s suite of services.
Contact Matrix at 1-800-866-2301 to learn more about our services for complete management of leaves of absence, disability plans (state and private), and ADA accommodations, including leave.