The state of New York and city of San Francisco recently passed laws guaranteeing paid family leave to eligible employees. New York becomes one of four states mandating paid family leave (together with California, Rhode Island and New Jersey) and its law is the most generous of any state leave policy. San Francisco is the only city in the country that has passed such legislation.
The U.S. is the only developed country in the world that does not mandate paid family leave. The federal Family and Medical Leave Act of 1993 provides eligible employees with up to 12 weeks of unpaid leave to care for a new baby or sick family member. An eligible employee is one who has worked for a covered employer for at least 12 months, has at least 1,250 hours of service for the employer during the 12-month period immediately preceding the leave, and works at a location where the employer has at least 50 employees within 75 miles.
The New York law, signed April 4, 2016, will provide employees with up to 12 weeks paid leave to bond with a child, care for an ill family member or address issues while a family member is on active duty in the U.S. Armed Forces. When the law becomes effective January 1, 2018, the employee will be eligible for up to eight weeks of paid leave at a weekly benefit amount of 50 percent of the employee’s average weekly wage. When fully implemented in January 2021, the policy will cover 67 percent of an employee’s average wages up to 12 weeks — twice that of any current state policy.
The program is part of New York’s temporary disability insurance program and will cover all private employers. The leave is funded entirely by employees through a nominal payroll deduction.
San Francisco’s Paid Parental Leave for Bonding with New Child ordinance, signed into law April 21, 2016, takes paid family leave a step further by guaranteeing eligible employees 100 percent of their weekly wages. It works in conjunction with the California Paid Family Leave Program under which most employees who contribute to the California State Disability Fund currently are entitled to six weeks of paid parental leave at 55 percent of their weekly wages. The state program is funded through a payroll deduction.
The San Francisco law requires covered employers to pay the remaining 45 percent of the employee’s gross weekly wages during the six-week period. The employer’s share of paid family leave will amount to an average of $3,344 per claim before California rates are adjusted, according to a March 22, 2016, impact report issued by the San Francisco Controller’s Office. The report states that the ordinance could cost employers $32.3 million annually if all eligible employees take advantage of the option. The law applies only to employers with 50 or more employees when it becomes effective in January 2017, but gradually becomes applicable to smaller employers. It does not apply to government entities.
Employers who will be covered by the new laws can expect a rise in the number of employees taking family leave due to the availability of benefits. Therefore, employers would be wise to review and, if necessary, update their policies to ensure that they will be in compliance by the laws’ effective dates.