Paid Family Leave and Minimum Wage Update

Paid Family Leave and a $15 Minimum Wage: How Will It Impact Employers?

Shortly before the annual budget deadline in New York State, Governor Andrew Cuomo and leaders in the state Senate and Assembly reached a deal that will include a paid family leave program and an increase in the minimum wage. While both plans are among the most ambitious in the nation, each plan will be implemented over a period of time so as to reduce the shock to the system that might otherwise impact employers.

Family Leave

Family Leave

Under the plan New York will introduce a paid family leave plan for workers in New York State. While other states, including California, have rolled out family leave before, New York’s proposal would double the amount of time an employee could take- from six weeks in California to twelve in the Empire State.

Beginning in 2018 workers who have been employed for a minimum of six months will be eligible for up to eight weeks of paid time off at fifty percent of their salary (up to fifty percent of the statewide average weekly wage) for a life event such as the birth or adoption of a child or to care for a sick relative, followed by up to 10 weeks in 2019. In 2021 that would increase to twelve weeks of paid time at 67% of the employee’s salary, capped at two-thirds of the state’s weekly average wage.

While this will impact employers in terms of planning and scheduling when an employee takes paid leave, the state is attempting to minimize the direct financial impact on employers; paying for the program out of a weekly payroll deduction from employees. The deduction will begin at $0.70 per week later increasing to $1.40 per week.

Employers will need to update their leave policies in order to comply with the regulation by the time it goes into effect. HR One will be developing policy language for employee handbook updates and our payroll service will be able to make the process of managing the deductions as easy as possible on employers.

Minimum Wage

New Minimum Wage

The budget includes an increase in the minimum wage towards $15/hour, though it does not do so under Governor Cuomo’s original plan, which was more aggressive towards reaching the $15 per hour figure. Rather than the minimum wage increasing at the same rate statewide, there will be different rates of increase for New York City, Long Island and downstate counties, and the rest of the state.

  • Large businesses (defined as those with 11 or more employees) in New York City will see the minimum wage increase to $11/hr at the end of 2016. It will then increase by $2/hr each year that follows until it reaches $15/hr on December 31, 2018.
  • Small businesses (defined as those with 10 or fewer employees) in New York City will see the minimum wage increase to $10.50/hr at the end of 2016. It will then increase by $1.50/hr each year until it reaches $15 on December 31, 2019.
  • Workers in Nassau, Suffolk and Westchester Counties will see the minimum wage increase to $10/hr at the end of 2016. It will then increase by $1/hr each year until it reaches $15/hr on December 31, 2021.
  • The rest of the state will have the minimum wage increase to $9.70/hr at the end of 2016. $0.70/hr will be added each year after until it reaches $12.50/hr on December 31, 2020. After that point the minimum wage will continue to increase to $15/hr on an indexed schedule, which will be set by the Director of the Division of Budget (DOB).
  • Finally, starting in 2019, the DOB Director will analyze the state of the economy in each of the regions outlined above and determine if the scheduled increases in the minimum wage should be suspended.

HR One will continue to make state minimum wage posters available for clients with a user ID and password on our website.

For any questions about the family leave provisions or the minimum wage you can contact the HR Helpline at (800) 457-8829.