New York’s Proposed Paid Family Leave Act Benefits Businesses

Currently, under the federal Family and Medical Leave Act (FMLA), an employee can take time off for family events, such as to care for an ill family member or when a child is born. Employees are only eligible when they work at companies with 50 or more employees, unless they work at designated governmental organizations or schools. Under FMLA, an employee can take up to 12 weeks of work off that are uncompensated. Although the employee is not paid for the time they do not work, their job is secure for that period of time.

Recently, a New York State bill was introduced to the State Senate, mandating that workers who qualify for the family leave act can also receive two-thirds of their average weekly wage. This will not cost businesses any money because the funding for the program will be deducted from employee’s paychecks. The payroll deductions will be allocated to New York’s Temporary Disability Insurance program, which in turn will be responsible for the wages distributed.

In addition to the fact that costs will not be assigned to businesses, the reality that employees can take paid leave will most likely increase the number of employed persons, and reduce turnover rates at companies. As one New York CEO put it, the most valuable asset a business can have is a good worker. He continued in saying that the availability of paid family leave will not only positively contribute to attracting good employees, but retaining them as well.

In support of this viewpoint, Demos reported that after California passed a similar paid family leave act, approximately 87 percent of employers stated they had no increased costs associated with the new law. Many switched from their own privately paid family leave policy to the publicly run program. Additionally, 9 percent reported reduced costs after the program was implemented. The main reason cited: increased chances an employee will return to the same employer after the leave is complete, thereby defraying costs associated with hiring and training new individuals.

Starting a business or continuing to have a successful company can be challenging because of ever-changing laws and regulations. Seeking the advice of an experienced business attorney will help business owners gain foresight into upcoming and current changes, as well as how to avoid common pitfalls. Contact the experienced attorneys at Blodnick, Fazio & Associates, P.C. for a free consultation by calling (516) 280-7105 or visiting www.bfandapc.com.

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