At a breathtaking rate, states and cities throughout the United States (including New York) are enacting various paid employee leave laws. While almost all of these new laws require employers to pay for the time off, they vary greatly in what qualifies for leave and how pay is to be determined. Worse, existing disability and workers’ compensation laws compound the difficulties for employers in managing employee needs for leave while balancing the various requirements of these different laws.
This article reviews the new laws, how each works, and what each requires. Additionally, guidance is provided on how to coordinate these new requirements with longstanding requirements under laws like the Americans with Disabilities Act, the Family Medical Leave Act, and workers’ compensation laws. Discussion of leave laws globally is also included. This piece concludes with recommended best practices for employers to follow going forward.
To best understand the current trend of state and city level paid employee leave laws, it is important to first review the federal law backdrop from which the current local movement has grown. Passed in 1993, the US Family Medical Leave Act (FMLA) is the primary federal law to guarantee employees the right to a leave of absence for a new child or medical need.
Significantly, this law’s entitlement is for an unpaid leave, and it only applies to work locations where an employer has 50 or more employees within 75 geographical miles. Further, it only covers workers who have been employed for at least a year and have worked at least 1,250 hours in the past year. The FMLA guarantees leaves as long as 12 weeks, continued health insurance coverage during the leave and protects the job so that the employee can return to work at the end of the leave.
State and City Movement
Realizing that unpaid leave causes many workers to not be able to make use of the FMLA entitlement (because they still need to earn a paycheck), many states and cities over the past several years have enacted various forms of paid leave laws.
The state of New York and New York City have recently both done so. Effective Jan. 1, 2018, the state of New York enacted a paid leave law with a four-year phase in. Funded through employer insurance, this law covers all employees who need to take a leave for reasons similar to those already set out in the FMLA. While starting now at lower levels, when fully implemented in 2021, employees will be entitled to take up to 12 weeks of paid leave at the lesser of 67 percent of their salary or 67 percent of the New York average weekly wage.
At the New York City level, effective May 5, 2018, employers in the city with five or more employees who work more than 80 hours per year must provide one hour of paid leave per every 30 hours worked with a mandatory annual carryover of 40 hours. Covered leave purposes include those similar to the FMLA, as well as domestic violence and human trafficking related assistance needs.
Beyond New York, the following states are among those that have enacted various forms of paid leave laws covering purposes similar to the FMLA: California (Jan. 1, 2018), Connecticut (2012), District of Columbia (May 13, 2008), Oregon (Jan. 1, 2016) and the state of Washington (effective 2020).
In addition, the following cities and counties are among those that have enacted paid leave laws:
Emeryville, Calif. (July 1, 2015), Oakland, Calif. (March 2, 2015), San Diego, Calif. (July 11, 2016), San Francisco, Calif. (Jan. 1, 2017), Montgomery County, Md. (Oct. 1, 2016), Bloomfield/East Orange/Elizabeth/Irvington/Jersey City/Montclair/Newark/Passaic/Paterson/Trenton, N.J. (Jan. 24, 2014), New Brunswick, N.J. (Jan. 6, 2016), Portland, Ore. (Jan. 1, 2014), Seattle, Wash. (Sept. 1, 2012), Spokane, Wash. (Jan. 1, 2017), and Tacoma, Wash. (Feb. 1, 2016).
And beyond the United States, almost every country in the world has enacted paid employee leave laws. To emphasize this point, here is a summary of just the “A” countries:
• Afghanistan, 20 days of vacation and 15 holidays
• Albania, 20 days of annual leave and 12 holidays
• Algeria, 2½ days of leave per month of work up to 30 days per year, and 11 holidays
• Andorra, 31 days of leave after one year of employment, before is 2½ days per month worked, and leave must be given at least 2 weeks straight plus 14 holidays
• Angola, 22 days per year plus 11 holidays
• Antigua and Barbuda, 1 day per month, plus 11 holidays (after probation)
• Argentina, 14 days (up to 5 years), 21 days (5 to 10 years), 28 days (10 to 20 years) and 35 days (after 20 years), plus 11 holidays
• Armenia, 20 days (up to 25 for certain reasons, including stress), plus 12 holidays
• Australia, 4 weeks per year worked (shift workers get 5 weeks), plus 10-13 holidays
• Austria, 25 days per year, 30 days if 25 years or more of service, plus 13 holidays
• Azerbaijan, 21 days per year, skilled employees get 30 days, plus 2 extra days every five years, plus 19 holidays
Other Laws Providing for Leave
Beyond explicit leave of absence laws, there are two other primary laws that also can entitle an employee to the right to take a protected leave of absence. The first is the U.S. Americans With Disabilities Act (ADA). Enacted in 1994, this law protects employees with physical or mental disabilities from discrimination in the workplace by requiring that employers provide such employees with reasonable accommodations to enable them to do their jobs. Courts have interpreted the ADA to require an employer to allow a covered employee to take a leave of absence where such leave is defined in scope and term (has a known end date) and does not cause an undue hardship on the employer.
The other primary law that can entitle an employee to a leave of absence is workers’ compensation, which protects employees who have been injured in the course and scope of their employment. Where an injured employee needs time off to recover or obtain treatment, many state workers’ compensation laws provide such a right.
Coordination and Best Practices
With so many different laws providing so many different types of leave rights, it can often be confusing for the in-house employment counsel or human resources manager to coordinate and manage all of the requirements. Some best pieces of advice to help are:
(1) Think about and check every leave law where your employee works to ensure that you are accounting for every possible entitlement and informing the employee of all of their rights when the company first becomes aware of facts that could give rise to the need for a leave. Some leave laws cover employees if they work there, even if the company does not itself have an office there.
(2) There is no one-size-fits-all solution. You must prepare the correct policies, notices, forms and certifications as required by each law. Because every company is different in terms of which laws apply, you need to develop documents specific to your operations.
(3) You must accurately track employee accruals and uses of leave entitlements. This includes training managers to spot factors giving rise to leave and to then notify human resources. Often, under leave laws, it is the employer’s burden to spot and inform the employee of their entitlement to leave.
(4) Don’t be afraid to call legal counsel for guidance; getting this wrong can be costly. At a minimum, it may result in an employee taking a leave of absence and then being able to claim that because the employer didn’t tell the employee the leave was covered by a certain law, being able to use that law after the initial leave ends to extend the leave further and start all over. In a worst case, it can result in litigation for discrimination and legal violation.
Brian Arbetter is a partner at Norton Rose Fulbright US.