Benefits & Healthcare Update: New York State Passes Paid Family Leave, Increased Minimum Wage
12 April 2016
On Monday, April 4th, New York’s Governor Cuomo signed into law a new state-run benefit for paid family leave and a statewide increase in the minimum wage, up to $15 per hour. Both pieces of legislation will be phased in over the next few years and apply to large employers. Benefits under the family leave provisions will become effective in 2018, while the increased minimum wage begins to take effect at the end of 2016.
12-Week Paid Family Leave
New York’s new 12-week paid family leave benefit is based on an insurance model, funded by employee payroll contributions. Unlike the federal Family Medical Leave Act (FMLA), the New York law applies to all employers, regardless of size, and to all employees that work just six months instead of FMLA’s twelve months. Like FMLA, the New York law requires that employers allow workers to return to work after the leave, and employers must offer to continue health benefits during the leave. Employees may take the leave to:
- Bond with a new child, including adopted and foster children;
- Care for a seriously ill child, parent, parent-in-law, spouse, domestic partner, grandchild, or grandparent;
- Address certain military family needs.
The benefit phases in over several years and is based on the employee’s pre-leave average weekly wage. Beginning January 1, 2018, an employee can claim up to 50% of the employee’s average weekly wages capped to 50% of the statewide average weekly wage; by full implementation in 2021, employees can claim up to 67% of the employee’s average weekly wages capped to 67% of the statewide average weekly wage. For perspective, the statewide average weekly wage for 2015 is $1,296.48, meaning an employee can claim at most $868.64 per week with full implementation before adjusting for inflation.
More details about the specific operation of the paid family leave benefit will become available as the NYS Department of Labor publish implementing regulations.
Increased Minimum Wage
New York will be raising its minimum wage in stages and at different rates according to employer size and geography. Eventually, the $15 minimum wage will apply to all employers in New York.
- For employees in New York City employed by large businesses (those with at least 11 employees), the minimum wage would rise to $11 at the end of 2016, then another $2 each year after, reaching $15 on January 1, 2019.
- For employees in New York City employed by small businesses (those with 10 employees or fewer), the minimum wage would rise to $10.50 by the end of 2016, then another $1.50 each year after, reaching $15 on January 1, 2020.
- For employees in Nassau, Suffolk and Westchester Counties, the minimum wage would increase to $10 at the end of 2016, then $1 each year after, reaching $15 on January 1, 2022.
- For employees in the rest of the state, the minimum wage would increase to $9.70 at the end of 2016, then another .70 each year after until reaching $12.50 on January 1, 2021 – after which it will continue to increase to $15 on an indexed schedule.
If you have any questions regarding the impact of New York’s paid family leave act or the increase in the minimum wage, contact Ed Doherty at 646.839.8251 or via email at EDoherty@cammackhealth.com.
You can also follow Ed on twitter @CHEdDoherty