Tag: employee benefits

New York Bereavement Leave

Cuomo Vetoes New York Bereavement Leave Law

In June 2018, the New York State Legislature overwhelmingly approved legislation that would have granted paid bereavement leave rights to most employees. The measure would have changed the New York Paid Family Leave Benefits law to include bereavement leave along with the existing qualifying circumstances.

In light of extensive resistance from the business community, the Legislature did not formally deliver the bill to the Governor’s office until December. Upon receipt, Governor Cuomo vetoed the legislation ostensibly out of concern for the impact on workers.

Proposed Bereavement Leave Amendment

New York bereavement leave legislation passed the Senate by a vote of 61-1 and the Assembly 111-32.

Republican Senator Rich Funke and Democratic Assemblyman Joe Morelle sponsored the amendment. Both have lost children who were in their early thirties. Their memorandums in support of the bill stated:

“The inability to take time to process grief not only has an impact on a person’s health and their family, it has a profound impact on their ability to carry out their normal day to day tasks. However, on average, four days are allotted for the death of a spouse or child, according to the Society for Human Resource Management 2016 Paid Leave in the Workplace Survey.”

The legislation relied on additional wording in the Paid Family Leave Benefits law that took effect at the beginning of 2018. It modified the definition of “family leave” to include “leave taken for the purposes of bereavement due to the death of a family member.” The legislation also indicated that a death certificate would provide the necessary certification of eligibility for leave.

Potential Impact of Proposal

These minimal revisions to the Paid Family Leave legislation could have had extreme consequences.

Bereavement leave apparently would have been available for up to 10 weeks (increasing to 12 weeks in 2021) each year without any limitation on the timing relative to the death. Moreover, it would have been available equally regarding a broad array of family members, including grandchildren, children, spouses, parents, and grandparents. Although the New York Workers’ Compensation Board likely would have been able to issue regulations related to the new bereavement leave component of Paid Family Leave, it might have lacked authority to place further limitations on those parameters.

As the Paid Family Leave Program operates as a (primarily) employee-funded insurance benefit, employees would have had to contribute more out of their paychecks to fund the insurance premiums. As with the original Paid Family Leave categories, this long-term bereavement leave would have been difficult for the State to price effectively, potentially leading to over- (or more likely) under-funding in the first years.

Business Community Opposition

The Business Council of New York led the efforts of more than 20 prominent business groups, including many chambers of commerce, seeking Governor Cuomo’s veto of this legislation.

This consortium’s August 2, 2018 letter to the Governor’s office noted that the Legislature had rebuffed efforts to include more reasonable limits on paid bereavement leave:

“The Business Council’s recommendations for reasonable parameters on any expansion of PFL to bereavement were rejected by both the Senate and Assembly sponsor. These included limiting bereavement leave to several weeks, to be used within 180 days of a family member’s death.”

This letter also expressed concern “that the Legislature is proposing a dramatic expansion of the Paid Family Leave Act that has only been in effect for just over six months [now one year], and before any usable data is available regarding utilization or costs. Employers, the state, insurers and employees are still working to understand and implement the current law.”

Finally, these business groups noted that fully-paid bereavement leave is already a standard employee benefit, though often only for a few days; and that “Employers understand that to attract and retain the best talent available they need to be there for their employee[s] in their time of need and will continue to do so without another burdensome government mandate.”

Governor Cuomo’s Veto

Although business groups more vocally object to this legislation, Governor Cuomo publicly relied almost exclusively on supposed worker concerns in his veto message:

“Workers’ organizations such as A Better Balance have expressed significant concerns to me about this bill, and, as difficult as it is, I must heed their concerns.”

A Better Balance prides itself on having been active in supporting New York’s original Paid Family Leave law. But the organization posted a call to action on its website encouraging the Governor to veto the bereavement leave amendment. It emphasized the anticipated high costs to workers:

“Costs – entirely borne by workers – will be extremely high. Because paid family leave is 100% worker funded, this bill would impose potentially very high, uncalculated costs on New York workers—costs that will fall especially heavily on low-income workers.”

Governor Cuomo repeated that concern, while otherwise sharing some raised more specifically by the Business Council. For example, the veto memorandum notes: “Second, there is no stated limit on when leave can be taken. Unlike bonding leave, which is limited to 12 months from the qualifying event, no such limit would exist here. This drafting failure could lead to claims being made well beyond a year from death.”

The Future of New York Bereavement Leave

Employers should not expect this issue to disappear in 2019. Governor Cuomo concluded his veto message by commenting: “I am committed to working with the Legislature in the coming legislative session to resolve these issues for the benefit of hardworking New Yorkers.”

What might an alternative New York bereavement leave law look like?

New York Legislators will have to decide whether to continue to pursue bereavement leave through the Paid Family Leave Program or another path.

PFL offers the benefit of being an existing, employee-funded system. But any addition of bereavement leave must be much more narrowly drafted than it was in the 2018 legislation. The lawmakers should separately address issues such as length of leave available per death, total leave available per year, timing of leave, etc. And 10 or 12 weeks projects as an unaffordable and overly burdensome duration. The Legislature should also consider whether the same leave parameters should apply equally to small and larger employers.

The Legislature could alternatively seek to impose a mandatory paid or unpaid bereavement leave requirement outside of the Paid Family Leave Program. However, it would then be more difficult to effect an employee-paid system. Requiring employers to offer more than a couple of days of paid bereavement leave would raise significant opposition. And any requirement that small employers pay employees not to work could be financially crippling.

 

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New York Paid Family Leave Rates 2019

Higher New York Paid Family Leave Rates in 2019

How is your company coping with New York Paid Family Leave so far? Remember that the paid family leave rates change next year. This includes both how much employees will pay for this statutory benefit and how much they can receive.

Employee Contributions

The New York Department of Financial Services (DFS) has announced the maximum employee-contribution rate for 2019. It will increase from 0.126% to 0.153% of the employee’s gross wages, up to an annual maximum. This maximum annual contribution will be $107.97 in 2019 compared to $85.56 in 2018.

This means an additional cost of up to $22.41 for many employees.

Paid Family Leave Benefits

But it’s not all bad news for workers. DFS also confirmed that the weekly paid family leave benefit will increase in 2019. The weekly benefit rate increases from 50% of the employee’s average weekly wage to 55%. This percentage only applies up to the first $1,357.10 of weekly earnings. An employee who earns more than that can only receive $746.40 per week in paid family leave benefits.

Plus, as originally scheduled, eligible employees may take two more weeks of paid family leave in 2019. The maximum allowance increases from 8 to 10 weeks.

Future Paid Family Leave Rates

Expect the contribution and benefit rates to change again.

Under the original schedule, maximum weekly benefits will increase to 60% of the average weekly wage in 2020 and 67% in 2021. The NYS Superintendent of Financial Services could delay these increases, but did not do so for 2019.

The maximum leave allowance will increase to 12 weeks per year beginning in 2021.

What Must Employers Do?

Companies should confirm their 2019 paid family leave premiums with their insurance carriers. Then make sure that next year’s payroll will include the correct contribution rates.

If your paid family leave policy reflects specific paid family leave rates for 2018, then you might need to change those.

This is also an excellent opportunity for employers to review which employees are eligible to opt out of the paid family leave program. Employers must offer qualifying employees the chance to waive coverage (and corresponding paycheck deductions). However, the waiver automatically expires if the employee later becomes eligible for paid family leave.

 

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Vacation Pay New York

Vacation Pay in New York

Vacation pay is a typical employee benefit throughout the United States. In New York, however, like most states, employers do not have to give their employees paid vacation. Consequently, New York employers have discretion in how they structure their vacation benefits. But once they establish a vacation plan, employers must follow it.

Click here for some other items to review in your Employment Law Check Up.

New York Vacation Pay Law

Again, New York law does not require employers to give their employees vacation time. However, employers who offer paid vacation must notify employees of the applicable policy in writing.

Employers must follow their existing vacation pay policy. If, for example, the policy says that employees will receive unused vacation pay upon separation of employment, then the employer cannot withhold the vacation pay by arguing the employee engaged in misconduct. However, if the policy specifies that unused vacation time is forfeited upon termination, then employees do not have a right to a vacation payout. If the employer’s policy does not address separation of employment, or there is no written policy, then the Department of Labor will take the position that the employee is entitled to a payout of earned vacation time.

Generally, employers may revise their vacation pay policies. In doing so, employers should avoid taking away earned vacation time without adequate compensation.

Employees may also receive contractual rights to vacation pay through individual employment agreements or collective bargaining agreements. Employers may not be able to modify these easily.

Structuring Vacation Benefits

Employers take different approaches to paid vacation.

Some companies allow different numbers of weeks of vacation pay based on length of service. This often ranges from approximately one to four weeks per year. Eligibility may also vary between full- and part-time employees.

Some companies combine vacation and other forms of paid leave into one category—PTO, or paid time off. Employees receive a specified number of PTO days (or hours) to cover absences. This may include or be separate from sick leave.

There are also different accrual methods. Sometimes employees receive all of their annual allotment on the first day of the year. Under other systems, employees accrue vacation pay on a daily, weekly, monthly, or another basis.

Most employers require supervisor approval, ideally with reasonable notice by the employee. This helps avoid too many employees being on vacation at the same time.

Different methods work for different organizations. There is no one-size-fits-all “best” approach. This is one area where employment law, at least in New York, allows employers considerable flexibility to meet business needs.

Check Your Vacation Policy

Take this opportunity to review your organization’s vacation pay policy. Does it still meet your needs? Does it address what happens to vacation time when employment ends?

A well-designed vacation policy can improve employee morale while maintaining productivity. A weak policy can lead to workforce shortages or fatigued employees. Consider many factors, including past experience. If the current vacation pay policy isn’t producing the desired balance, then changes may be appropriate.

Experienced employment attorneys can assist in policy design. They can both offer alternatives that have worked in other organizations and edit policy language to help avoid unintended consequences.