2017 is in the books and 2018 is now upon us. A dramatic close to 2017 on Capitol Hill ushered in sweeping changes to the tax code that will begin to impact both employers and employees in a number of ways – some more immediately – from employers losing deductions for sexual harassment settlement payouts, to penalties for high nonprofit executive compensation, to tax deferral on exercise of stock options for public company executives, to employee benefit plans. Wage and leave-related issues are also likely to dominate in 2018, as more states (and employers on their own initiative) increase wage thresholds and broaden employee paid and unpaid leave entitlements (even for some smaller employers). Salary history bans, such as those already enacted in New York City, Massachusetts, and California, will continue to get traction in 2018 as more states and municipalities jump on that bandwagon. We also expect to continue to witness a significant shift in the NLRB’s enforcement policy and decision-making; the NLRB’s new General Counsel has already announced a number of changes that are sure to make employers sigh with relief. Also in 2018, employers could continue to face rising uncertainty with respect to health plans in the wake of the tax bill’s repeal of the individual mandate that was central to keeping health plans affordable under the Affordable Care Act. Finally, so that we can help keep you accountable to the five New Year’s resolutions we made for you over the holidays (that we know you were eager to adopt as your own), we have collected them for you here: (1) review and refresh your non-harassment policies and training; (2) update your leave policies; (3) make sure your job applications comply with new state ban-the-box laws and salary history inquiry bans; (4) assess the strength and enforceability of your post-employment covenants under changing state law; and (5) make sure your employee benefit plans are compliant.
As we count down to the fast-approaching New Year, one of the most significant changes taking place for employers in New York is the implementation of the New York Paid Family Leave law, which takes effect on January 1, 2018. We previously posted a comprehensive guide for employers on the steps they need to take in advance of January 1st to prepare for the implementation of Paid Family Leave, and for those who have not yet tackled this item, it is not too late!
New York Paid Family Leave
New York’s Paid Family Leave law will be phased in over four years, from 2018 to 2022. When fully implemented, the law will allows employees to take up to 12 weeks of job-protected paid family leave to:
- care for a family member (including a child, parent, grandparent, grandchild, spouse or domestic partner) with a serious health condition;
- bond with the employee’s newborn or newly-placed adoptive or foster child during the first 12 months following birth or placement; or
- address any qualifying exigency relating to a spouse, domestic partner, child or parent who is serving on active military duty.
The law is essentially structured as an additional insurance policy that employers will now be required to provide to employees. In many cases, this policy will be a rider to an employer’s existing disability insurance policy. The law is funded through employee contributions made via payroll deductions at the rate of 0.126% of an employee’s wages, up to an annual maximum of $85.56.
For those employers who have not yet focused in on their compliance obligations, and to prepare for implementation as we enter the New Year, we have put together a brief checklist of steps employers should take now to be ready come January 1st:
- Employers should immediately contact their insurance carriers to arrange for Paid Family Leave coverage.
- If you aren’t already deducting PFL contributions, employers should coordinate with their payroll departments and/or payroll vendors to arrange for deductions to be made beginning on January 1.
- Employers must update their written materials including their employee handbook and/or other written guidance to include necessary information about Paid Family Leave and to integrate this new leave entitlement with their other impacted leave policies.
- Employers should post the Notice of Compliance [PFL 120] received from their insurance carrier in a conspicuous place.
- Employers should identify employees who will not be eligible for Paid Family Leave and inform them that they can choose to waive coverage. Distribute and collect waivers from non-eligible employees.
- Post or distribute the Statement of Rights for Paid Family Leave when an employee takes Paid Family Leave or takes time off from work for a Paid Family Leave qualifying event, even if they have not requested Paid Family Leave.
- Train managers to recognize Paid Family Leave requests and to alert Human Resources, and train Human Resources on how to process requests, including distribution and completion of appropriate paperwork and tracking leave.
While this may sound like a lot to do, rest assured that we have been helping employers through all stages of managing and implementing this new policy.
California Expands Protections with New Parent Leave Act
For those employers with employees in California, the New Year brings new developments on the family leave front as well. While California employers with 50 or more employees continue to be covered by the California Family Rights Act and the federal Family and Medical Leave Act, as of January 1, 2018, the newly-enacted New Parent Leave Act will expand those protections to smaller employers. The new law requires California employers with 20 to 49 employees within a 75-mile radius to provide up to 12 weeks of job-protected unpaid parental leave to employees.
The law covers employees with more than 12 months of service with the employer and at least 1,250 hours of service during the previous 12-month period, and permits leave to be taken for a single purpose: “to bond with a new child within one year of the child’s birth, adoption, or foster care placement.” The 12 weeks of leave provided by the New Parent Leave Act is in addition to the up to 4 months of pregnancy disability leave (PDL) available to employees working for an employer covered by the California PDL law, i.e. employers with five or more employees. You can find more information on the New Parent Leave Act in our previous post.
Introducing … Protected Weekends
Need a vacation after implementing all these changes to the family leave laws? Well, a few employers have tossed around the idea of a protected weekend. While novel, some companies are beginning to require that employees take vacation and at least some time off on the weekends. Both Citigroup and JP Morgan have recently implemented a “Protected Weekend” day on which employees may not come into the office or log on remotely to work – however, they can monitor their emails in case any critical issues arise. We will keep watching for developments in this area as companies that have adopted these policies begin to accumulate data regarding their effectiveness.
Trick or Treat! This month’s Bubbler is a cauldron full of hot new developments in employment law … the NYC Salary History law is now in effect … California followed suit and its salary history law will take effect on January 1, 2018, just after Delaware and just before Massachusetts … Employers in New York are preparing to implement the new Paid Family Leave law, joining California, New Jersey and Rhode Island as the fourth state to provide this paid leave through employee-paid payroll taxes … The Supreme Court heard oral arguments in the class action waiver case … the NYC Council passed a bill to expand the Earned Sick Time Act … and the Third Circuit cited to a Harry Potter novel in an FLSA decision.