January 26, 2016
Subject: The Paid Family Leave Act
A.3870A (Nolan) / S.3004A (Addabbo)
(AN ACT to provide workers’ compensation benefits for injury or sickness, pregnancy or family leave).
The Paid Family Leave Act (A.3870A/S.3004A) would guarantee workers up to 12 weeks of job-protected paid leave to bond with a new child or care for a seriously ill family member. In his 2016 State of the State address and executive budget, Governor Cuomo also proposed a paid family leave plan providing up to 12 weeks of job-protected, paid leave to bond with a new child or care for a seriously ill family member.1 The NYCLU supports a family leave policy that helps working women and families in New York make sound choices about having children and caring for one another.
To this end, the NYCLU strongly urges state legislators and the Governor to create a strong and meaningful paid family leave benefit with five key components:
1) 12 weeks of leave to care for a new child or seriously ill family member;
2) job protection throughout the leave;
3) coverage for all private sector workers, no matter the size of the business;
4) a wage replacement rate of two-thirds of a worker’s average weekly wage, which will ensure that low-wage workers are able to utilize the leave benefit; and
5) modernizing the Temporary Disability Insurance (TDI) program covering a worker's own illness or off the job disability, which has been frozen at the 1989 level of $170/week.
Many New Yorkers are unable to take time off from work when a new child is born or adopted, or a loved one has a medical emergency. In fact nationwide only 12 percent of employees receive paid family leave from their employers.2 While the federal Family and Medical Leave Act (FMLA) allows employees of large companies to take twelve weeks of unpaid leave, that law only covers approximately 60 percent of all workers in the United States. And those employees who are covered often cannot afford to lose the pay3 – for them, the family leave benefit is no benefit at all.
This legislation would establish a paid family leave benefit that is administered through the state’s Temporary Disability Insurance (TDI) program, a longstanding insurance system familiar to New York businesses. Established in 1950, the TDI system provides temporary cash benefits for workers injured off the job or for disabilities arising from a pregnancy.
When this new benefit is fully phased in, workers who need time off to care for a loved one could apply for family leave benefits through TDI and receive a “wage replacement” for two-thirds of their average weekly wage for up to 12 weeks.
The two-thirds benefit level ensures low-wage workers can afford to utilize the benefit. In comparison, when fully phased in, the Governor’s paid leave proposal raises the wage replacement benefit to only fifty percent of a worker’s average weekly wage. And while TDI is jointly funded by employers and employees, the paid family leave benefit in A.3870A/S.3004A will be financed solely through small employee payroll deductions of up to 45 cents a week in the first year.4
Further, as distinct from the Governor’s paid leave proposal, this legislation also contains a critical modernization of our TDI benefit program. Since 1989, workers have been able to claim up to $170 a week in temporary disability insurance benefits. While other states have raised benefits to reflect increased in the cost of living, New York’s benefit level has remained unchanged for almost 30 years. This legislation would phase in, over a period of four years, increases in the TDI and paid family leave benefit levels - up to a maximum benefit level equaling 50 percent of the state’s average weekly wage.
Based on this formula, the maximum weekly benefit in 2012 would have been $603. In a state where the cost of living has gone up 88 percent since TDI was last raised in 1989, and where the minimum wage is $8.75 per hour, no family can hope to cover even the minimum cost of housing and food on the $170.
This long-overdue increase will make the TDI benefit a meaningful one – for those who suffer temporary disabilities on the job and for those who need to take leave to care for a loved one.
Over the past several decades, New York’s workplaces and families have changed dramatically – there are more women in the paid workforce than ever before; in most families, both parents have outside jobs; many households are headed by single parents; and family members are living longer and require more care in the latter part of their lives.
Given these realities as well as the widening income gap, paid family leave is essential to the health and well-being of New York’s workforce – especially those who live paycheck to paycheck and lack job security.
Further, the availability of this benefit is a matter of gender equity. This benefit will provide critical support to women, who continue to disproportionately bear the burden of both child care and elder care. For less than a cup of coffee per week for each worker who pays into the system, all workers can receive a paid family leave benefit.
And the benefits of paid leave accrue to employers as well. Research has found that the availability of paid family leave helps businesses retain valued employees, reduce turnover, boost productivity, and increase loyalty and morale among workers.5 This is particularly true for small business settings, where colleagues work closely together.
In fact, paid family leave will help small businesses remain competitive and retain talented employees by providing a benefit that is currently offered only to employees of large companies.6
Indeed, a Small Business Majority poll found that 8 in 10 small businesses in New York support expanding the state’s disability insurance program to provide paid family leave.7 And for businesses that already provide paid family leave, a state paid leave program will help to offset existing costs.
As with the TDI program, employers will be able to provide paid family leave through the state insurance fund, or they can choose to provide family leave to their employees on their own or through a private insurer and seek reimbursement for some of the cost.8
The United States is the only developed nation that does not provide paid family leave, putting us in the company of Papua New Guinea and Swaziland. Individual states, however, are leading the way in developing paid leave policies that support workers and their families. California, New Jersey, and Rhode Island have successfully integrated paid family leave into their TDI programs; studies show that an overwhelming number of employers found a neutral to positive impact on business, productivity, and employee morale.9
Lawmakers have an opportunity to promote healthy families and a stable workforce with the adoption of a Paid Family Leave Program. This law will ensure that no New Yorker has to choose between a paycheck and the health and well-being of his or her family. The NYCLU urges the legislature to pass A.3870A/S.3004A and make paid family leave a reality for all New York workers.
1 A.9005/S.6405, 2016-2017 Public Protection and General Government Executive Budget Proposal, Part H
2 Bureau of Labor Statistics, National Compensation Survey: Employee Benefits in the United States, March 2013 (released Sept. 2013) at 108 (table 32, leave benefits for civilian workers), available at: http://www.bls.gov/ncs/ebs/benefits/2013/ebbl0052.pdf.
3 Jacob A. Klerman, et al., Family and Medical Leave in 2012: Technical Report, Abt Associates for U.S. Dep't of Labor (Sept. 2012), at 161, available at: http://www.dol.gov/asp/evaluation/fmla/FMLA-2012-Technical-Report.pdf.
4 In subsequent years, New York’s Superintendent of Financial Services will determine the amount of employee contributions based on the cost per worker of providing paid family leave through the state insurance fund. A 2014 report from the Fiscal Policy Institute estimated the midpoint range of benefit contributions for an employee when the legislation is fully phased in at 88 cents per week. Reform of New York’s Temporary Disability Insurance Program and Provision of Family Leave Insurance: Estimated Costs of Proposed Legislation, A Fiscal Policy Institute Report, June 2, 2014, at 12, available at: www.fiscalpolicy.org (in New Jersey for 2014 the weekly employee contribution for the paid family leave benefit is 60 cents).
5 A recent study showed that an overwhelming majority of California employers believe PFL has had a positive or neutral effect on their business. See Ruth Milkman & Eileen Appelbaum, Unfinished Business: Paid Family Leave in California and the Future of U.S. Work-Family Policy (2013), at 68-72; Eileen Appelbaum & Ruth Milkman, Leaves that Pay: Employer and Worker Experiences with Paid Family Leave in California, Ctr. for Econ. & Policy Research (Jan. 2011) at 4, 8; see also Elizabeth Rudd, Family Leave: A Policy Concept Made in America, Sloan Work and Family Research Network (2004), available at http://workfamily.sas.upenn.edu/wfrn-repo/object/ed5rb04oq4vm53b1.
6 See Eileen Appelbaum & Ruth Milkman, Achieving a Workable Balance, Rutgers Ctr. for Women & Work (2006) at 23.
7 Small Business Majority, Opinion Poll: New York Small Businesses Support Family Medical Leave (Dec. 2013), at 7, available at: http://www.smallbusinessmajority.org/small-business-research/downloads/1....
8 N.Y. Workers’ Comp. Law § 211. 9 See note 5, supra (describing findings from surveys and studies of California employers regarding PFL).