On April 4, 2016, Governor Cuomo signed legislation enacting a statewide $15 minimum wage plan and a 12-week paid family leave policy. The sweeping legislation was passed as part of the 2016-17 state budget.Minimum Wage Plan
The legislation includes an incremental minimum wage increase, ultimately reaching $15 an hour for all workers in all industries across the state. The plan is structured as follows:
- For workers 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 thereafter, reaching $15 on 12/31/2018.
- For workers 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 thereafter, reaching $15 on 12/31/2019.
- For workers in Nassau, Suffolk and Westchester Counties, the minimum wage would increase to $10 at the end of 2016, then $1 each year thereafter, reaching $15 on 12/31/2021.
- For workers in the rest of the state, the minimum wage would increase to $9.70 at the end of 2016, then another .70 each year thereafter until reaching $12.50 on 12/31/2020 – after which it will continue to increase to $15 on an indexed schedule to be set by the Director of the Division of Budget in consultation with the Department of Labor.
12-Week Paid Family Leave
The legislation also includes one of the most comprehensive paid family leave programs in the nation. When fully implemented, employees (both women and men, full-time and part-time) will be eligible for 12 weeks of paid family leave when caring for an infant, a family member with a serious health condition or to relieve family pressures when someone is called to active military service.
Significant for employers, the paid family leave will be funded by a weekly payroll tax of approximately $1 per employee, deducted from employees’ paychecks and paid into a family leave insurance fund, similar to the state’s short-term disability benefits program. Thus, employers bear no direct financial burden of funding the paid leave benefits.
Like the minimum wage plan, paid family leave benefits will be incrementally phased-in. Beginning January 1, 2018, employees will be eligible for 8 weeks of paid leave. The time allowed increases to 10 weeks for 2019 and 2020, and then 12 weeks starting in 2021. In 2018, an employee on paid leave will be paid at 50 percent of the employee’s average weekly wage, capped to 50 percent of the statewide average weekly wage. That amount will gradually rise until 2021, when employees will receive 67 percent of their average weekly wage, capped to 67 percent of the statewide average weekly wage.
The paid leave is available to both men and women and both full-time and part-time employees. Employees are required to have worked for their employers for at least six months to be eligible for paid leave.
Despite the delay in implementation, employers are wise to begin their preparations sooner than later, particularly with respect to any necessary revisions to internal leave time policies. Mackenzie Hughes will continue to provide updates to this groundbreaking legislation as warranted.