Friday, December 15, 2017

Paid Family Leave goes into effect in 2018

Governor Andrew Cuomo has his sights set on living in the White House one day and he continues to use the Empire State as a petri dish and a sort of campaign to that end.

For example, he has been on a mission to redefine how business is done in New York by determining what employers should offer in terms of pay and benefits. He introduced ridiculously-high fast food wages which then led to much higher mandated minimum wage laws for all industries. He has proposed new worker scheduling standards that will go into effect next year given they survive the public comment period. And, going into effect on January 1, is paid family leave (PFL), which makes New York just one of four states to offer it.

By law, all private-sector employees must be provided PFL (except for farm workers, clergy and teachers at private schools). It’s not like Obamacare where business with 50 or more workers have to provide the benefit of healthcare. Under this plan, it doesn’t matter if you have 2 people in your plowing and landscaping crew or 100 people in a factory, all have to be granted paid family leave.

Such leave provides job-protected, paid time off to workers to bond with a newly born, adopted or fostered child during the first 12 months after birth or placement; assist loved ones when a family member is called to active military service abroad; or care for a family member with a serious health condition. By definition, a serious health condition is an illness, injury impairment, or physical or mental condition that involves either inpatient care or continuing treatment or supervision by a health care provider.

In 2018, workers can take up to 8 weeks of PFL. That maximum rises to 10 in 2019. It then goes to 12 in 2021. It can be taken as a whole or intermittently throughout the year as needed.  

While out on PFL, income benefits received will be 50% of one’s weekly pay (up to $652.96 paid out). In 2019, that grows to 55%. In 2020, it becomes 60%. Then, in 2021, it becomes 67%. The payout maximum is periodically adjusted, too, being pegged to the average weekly salary for New York workers.  

The benefit is a form of insurance that is granted through the same insurers that issue disability insurance. The employers do not foot the bill for it. Instead, the premium is extracted as a deduction from employees’ paychecks at a rate of 0.126%, meaning that a $15 worker will pay 76 cents a week.

It should be noted that many business people and public policy analysts (including this writer) feel that this is nowhere near enough to cover what will be utilized -- people will max out and or abuse the program. It’s not out of the question that premium rates in terms of dollars per week will be collected in the coming years.  

But, I digress. Back to the task at hand.

Employers have the next week and a half to educate their workforce, revise their handbooks (and have their employees sign-off on the revision) and post signage in advance of the program.

After that, it’s a simple program in terms of administration and one that takes some risk away from the business. I know many supervisors had concerns over granting PFL. With HIPPA in play, how could one legally know the issues faced by a family? And, how could a manager determine if the woes are bad enough to merit leave and, if it was denied, could she be sued? Those concerns no longer belong to the employer – the state put that responsibility on the shoulders of the insurance companies. It is up to them to decide who gets or is denied PFL.

But, the employers do, though, have to be aware that the employee must return to the same or a similar position upon their return. Larger companies like mine will have an easier go at moving around employees to cover those who are off. For workplaces with just a few workers – which make up most of the economy -- missing someone for 3 months at a time (on top of paid time off they have coming) will create incredible stress: How do they find talent for such a term and keep their operations running well?

Every time something like this is introduced it not only adds to the cost and headaches of running a business in New York State. It also takes away from an employer’s recruitment arsenal. When the government determines pay scales and benefits and a sort of sameness for the entire economy, it takes away the ability of employers to differentiate themselves from others, which was how they acquired the best talent for their operations and, in turn, created the best outcomes.  

This is just another in a long line of game changing regulations the Cuomo Administration has put upon businesses, both small and large, in the state. What’s next? Will the Governor decree that all workers have to be granted a minimum number of paid days off annually? Don’t be surprised if that happens. It’s only a matter of time.  

From the 18 December 2017 Greater Niagara Newspapers

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