A decision many employers grapple with concerns the benefits, such as paid leave or job security, offered to expectant mothers and others who need to take time off to care for newborns and sick family members. Offering paid maternity, paternity and other leave, as well as job security, can be a great opportunity to differentiate your business from your competition in the eyes of current and prospective employees. This can help retain your best talent and avoid the costs associated with losing a valued employee which might otherwise financially devastate a small business.
Until recently, the only statutory protection available for those who needed to take time off to care for family members, including expectant moms, was through the Family and Medical Leave Act (FMLA), which is a federal law that provides up to twelve (12) weeks of unpaid, job-protected leave per year The law further requires that group health benefits be maintained during the period of leave. It is important to note that FMLA only applies to companies with fifty (50) or more employees. Now, however, there is protection available for individuals employed by companies with less than fifty (50) employees, including many area medical practices.
Effective January 1, 2018, New York State is now offering publicly funded paid family leave for nearly all private employees in New York State through the New York State Paid Family Leave Benefits Law (“PFBL”). Specifically, eligible employees are guaranteed the following:
- paid time off for 8 weeks in 2018, increasing to 12 weeks by 2021, however, such amount will be capped at a percentage of the average salary in New York State;
- job protection upon return from paid family leave; and
- continuation of health insurance while out on paid family leave.
Should an employee want to take leave that is foreseeable, the employee is required to give the employer at least thirty (30) days’ advance notice. Foreseeable qualifying events include situations such as an expected birth, placement for adoption or foster care, a family member’s planned medical treatment, planned medical treatment for a serious injury or illness of a covered service member, or another known military exigency. Insurance coverage for such benefits generally will be added to an employer’s existing disability benefits policy. Such leave can also be taken right after an individual has taken disability leave. It is also interesting to note that these benefits are funded by employees through payroll contributions. The 2018 payroll contribution is 0.126% of an employee’s weekly wage and is capped at an annual maximum of $85.56. Employees earning less than the New York State average weekly wage will have an annual contribution amount less than the cap, consistent with their actual weekly wages.
While the new law certainly offers many protections for employees, the new law will not provide a fully paid leave for higher earners. Therefore, it is advisable that employers and employees directly negotiate whether any additional paid leave will be offered. For those employees with an employment agreement, the negotiated terms of such leave should be clearly identified in the employment agreement. Having a good employment agreement in place is critical, especially for professional employees, which includes physicians, physician assistants, dentists, chiropractors, and podiatrists. An employment agreement dictates the terms of employment, and often contains protections for both the employee and employer above and beyond those granted by state and federal law, especially in connection with termination. For instance, an employment agreement may dictate when employment may be terminated (i.e. for cause and without cause upon giving a certain amount of prior written notice), the salary/benefits to which the employee is entitled upon termination, as well as whether the employee is subject to a confidentiality, non-compete or non-solicitation provision following termination (whereby the employee essentially cannot disclose confidential information of the employer, compete with the employer for a specified amount of time, or solicit employees, referral sources, and patients, as applicable).
As a result of the new law, employers should also review their existing employee manuals in order to assure that they are up to date, and reflect any changes in applicable law, including the PFBL. If an employer does not have an employee manual, this is a good time to implement one.
Although some employees may be subject to the terms and conditions of an employment agreement, not all employees have such an agreement. Therefore, having an up-to-date, comprehensive employee manual is critical in order to inform the business’ employees—in a positive and concise manner–what the employer can expect from them (i.e. what their hours are, start time, job duties, and behavior in the office) and what they can expect from the employer (i.e. overtime), as well as the consequences of violating any policies of the employer (i.e. probation or termination). The employee manual is also a good place to highlight the benefits that are offered to employees (as well as eligibility), including for instance family leave, health insurance, retirement benefits, life insurance, disability insurance, and paid time off. With respect to paid time off, the employee manual should also specify how many vacation days and sick days employees are entitled to, as well as how employees accumulate such days. The employee manual should also identify the process associated with utilizing such paid time off (i.e. how much notice should be given and if a doctor’s note is required), as well as whether employees can “roll over” unused days to the next year or receive compensation for unused days. If the employer is located in New York City, the employer must also be cognizant of the New York City Paid Sick Leave Law which requires that employers with five (5) or more employees who work more than eighty (80) hours per calendar year in New York City provide paid sick leave to employees who work in New York City. Employers with one (1) to four (4) employees who work more than eighty (80) hours per calendar year in New York City must provide unpaid sick leave. As per applicable law, employers in New York City are required to provide notice of these rights to their employees, as well as provide a written policy to their employees regarding their sick leave. The policy can be incorporated into the employee manual.
In the event an employee is injured on the job, employees should also be made familiar with the employer’s policies and procedures with respect to Workers’ Compensation. Although the employer should retain the right to change any such benefits, the employee manual is often a good place to at least address which benefits the employer offers.
Although New York State is an “employment-at-will” state, meaning an employer has the right to discharge an employee at any time for any reason, except with respect to race, creed, national origin, age, handicap, gender, sexual orientation or marital status, it is recommended that the employee manual specify that all employees can be terminated at any time without cause. Upon termination, all employees should have an exit interview, whereby the employer has a discussion with the employee regarding his/her employment. Furthermore, employees should be informed and aware that they cannot disclose any confidential information of the employer (including HIPAA information if the employer is a professional practice), or disparage the employer in any way.
In conclusion, given the new rules and regulations governing employees and employers, it is imperative that employers make sure that their employment agreements and employee manuals are compliant and up to date. Practices and businesses that understand the applicable rules and regulations governing their employees and have documents in place to protect their interests and comply with applicable law will have taken an enormous step in avoiding labor law disputes in the future.