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Kiwi Partners | 237 West 35th Street, #1101, New York, NY 10001 | 212.532.7171

Paid Family Leave and its on Impact Small Businesses

February 25, 2020

 

In 2018, New York State enacted the Paid Family Leave Policy (NYPFL). With its enactment, the policy was quickly recognized as one of the strongest policies of its kind within the United State. Funded partly by a payroll tax from state residents, this policy ensures some compensation and job protections for millions of employees across multiple sectors and industries, regardless of whether the resident’s employer had an established family leave policy. Currently, NYPFL allows employees to spend up to 10 weeks away from work with compensation to:

  • Bond with a newly born, adopted or fostered child,

  • Care for a family member with a serious health condition, or

  • Assist loved ones when a spouse, domestic partner, child or parent is deployed abroad on active military service.

It’s important to highlight the ways this policy differs from an internal policy established by an organization.

 

ACCESS

There isn’t an approval process for NYPFL. An employee may register for this benefit through the employer or file directly with the state. Conversely, employers are not required to offer a family leave benefit. However, many organizations have found that offering a family leave policy aids in employee retention and recruiting efforts. However, if your organization has a small staff, it is extremely important to plan for an employee’s leave. The policy requires a 30-day notice, which usually is not enough time to plan for extended absences. Depending on the employee’s role with the organization, temporary employees or consultants may need to be engaged to prevent lapses of productivity. An alternative would be establishing a plan to have other employees share in the workload while the employee is away.

 

COMPENSATION

Employer-based policies offer some variation of time off, with or without compensation. A robust policy usually offers a few weeks of time off with 100% compensation while away. However, not all organizations may have the resources to cover an employee’s full salary while they are away.

NYPFL guarantees compensation equal to 60% of the percentage of your average weekly wage (AWW), capped at the same percentage of the Statewide Average Weekly Wage (SAWW). For 2020, the cap is $840.70. For organizations that are not able to provide full compensation to employees while on leave, we encourage communicating with the employee regarding the financial implications that leave may represent. Offering employee-paid ancillary benefits like supplemental short-term and long-term disability insurance as a part of the benefit offerings can help assist with a financial burden. For employers who cover 100% of their employee salaries while on leave, they can often claim reimbursement for the portion of the salary covered by PFL.

 

PROTECTIONS 

NYPFL also protects employees by ensuring that they return to work in a role similar or comparable to the role they had prior to the leave. This policy also guarantees continued access to health insurance and protection from discrimination and retaliation. For administrators, it is important to partner with your HR administrator to ensure that internal processes and practices are compliant with this law. Many questions usually arise around whether “at-will” statutes apply along with Paid Family Leave. An HR professional could be helpful in navigating this process.

Administration

 

After 2018, it was imperative that organizations of all sizes review their current leave policies to ensure that they are compliant with the new state policy and that definitions are adjusted to prevent extensions in leave time. For example, NYPFL allows an employee to take advantage of the policy at any time during the first of the qualifying event (ex; birth, adoption, deployment). If a company offers three months of family leave with compensation, it is important to state that the company benefit runs concurrently with the state policy. If not, it could be implied that an employee could take advantage of the employer's 3 months of leave and the additional 10 weeks of state leave. It is also important to state how vacation or paid time off (PTO)  time may be utilized during leave, if at all. Are employees allowed to use vacation and PTO to supplement their salary while on leave? Can they use vacation and PTO time to extend the duration of their leave? These are the types of discussions that should occur with your HR advisor when developing and implementing policy.

 

At Kiwi Partners, we support our HR clients with the administration of these policies to find solutions that are equitable for the organization and its employees. For more information on how we can support your organization, please contact us at Kiwipartners.com.

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