New York Passes Trailblazing Paid Family Leave Starting in 2018

On March 31, 2016, the New York State Legislature passed a bill that included the country’s most wide-ranging paid family leave law. Beginning in 2018, all full-time and part-time workers employed for 6 months in New York State will be eligible for a guaranteed, job-protected 12 weeks of paid family leave (PFL), regardless of the size of their company. PFL covers time off to bond with a new child (including adopted or foster children), or to care for a seriously ill child, spouse, domestic partner, parent, grandchild, grandparent, sibling, or the parent of a spouse or partner parent. In addition, employees may also use PFL to address certain legal, financial, and childcare issues related to the military service of a spouse, domestic partner, child, or parent.

Starting in 2018, employees will receive 8 weeks of paid leave at half their salaries. The leave will be funded by employees through payroll deductions, will gradually phase up over 4 years to 12 weeks and 67 percent of pay in 2021.  Employee payroll contributions will cost from .70 cents a week up to $1.40. After the full benefits kick in, workers will be eligible for just 67% of the state’s average weekly wage, or a maximum of $848 per week for the highest paid workers. The PFL requires no additional contributions from employers or taxpayers.  The legislation also guarantees job protection for all workers who take leave, even those who work for businesses with fewer than 50 employees, which are not subject to the federal Family and Medical Leave Act (FMLA).

Within the same budget bill, the New York legislature passed a $15 minimum wage increase along with a middle-class tax cut, public education and transportation investments, and other progressive measures. The emphasis on family comes following personal challenges faced by New York’s Governor Andrew Cuomo and the evolution of the fight for workers’ rights, shifting from just a women worker’s issue to a broad workforce concern.

New York now joins New Jersey, California and Rhode Island as the only states that offer paid family leave. Despite a national 12-week unpaid family leave policy, in the United States overall, about 40% of employees are not covered under the FMLA because their employers have fewer than 50 employees, they work too few hours, or they have been employed there for under a year.

For more information regarding the potential impacts of this legislation or how your business can prepare to develop a compliant paid family leave policy, please contact Dina M. Mastellone, Esq., Chair of the firm’s Human Resources Practice Group, at dmastellone@nullgenovaburns.com or 973-533-0777.

The Individual Liability You Never Knew You Had: Second Circuit Rules HR Directors May Be Liable for FMLA Violations

HR Directors, Beware: Your role in terminating employees may expose you to individual liability under the Family and Medical Leave Act (FMLA).

In Graziadio v. Culinary Institute of America, et al., Graziadio, a Payroll Administrator, took a three-week leave pursuant to the FMLA to care for her son suffering from diabetes, followed immediately by a second leave to care for her other son, who had broken his leg.  After Graziadio submitted the required paperwork, she heard from neither her supervisor nor the HR Director. When Graziadio tried to return work, the Culinary Institute required “additional paperwork” to justify her absence.  Graziadio was notified that she had seven days to submit the paperwork but was not provided any specific detail about what paperwork was required.  Graziadio then retained an attorney. Prior to submitting the “additional paperwork”, Graziadio was informed that she was terminated on the basis of job abandonment and failure to comply with the FMLA. Graziadio thereafter brought suit alleging claims based on interference with her FMLA leave, retaliation and associational discrimination under the Americans with Disabilities Act (ADA) against the Culinary Institute, the HR Director and another supervisor.  The Southern District of New York granted the Culinary Institute’s motion for summary judgment and dismissed the complaint against the individual defendants.

On appeal, United States Court of Appeals for the Second Circuit held that the Culinary Institute’s HR Director can be individually liable under the FMLA.  Under the FMLA, an individual may be held liable if he or she is considered an “employer,” defined as “any person who acts, directly or indirectly in the interest of an employer to any of the employees of such employer.” Applying the “economic-reality test,” the Second Circuit held that individual liability can be found when the alleged employer (1) has the power to hire and fire employees; (2) supervises and controls the employee work schedules or conditions of employment; (3) determines the rate and method of payment; and (4) maintains employment records. The Second Circuit further noted that in the FMLA context, the economic reality of employment relationships exists if the putative employer controls in whole or in part the plaintiff’s rights under the FMLA.

While the Second Circuit found that the Culinary Institute’s Vice President held ultimate termination authority, it also found that its HR Director played a key role in terminating Graziadio.  The HR Director admitted Graziadio’s termination was a joint decision between her and the Culinary Institute’s Vice President. The Vice President also admitted to directing the HR Director to handle the dispute with Graziadio, rather than conducting an independent investigation. The Second Circuit found that sufficient evidence existed that the HR Director controlled Graziadio’s rights under the FMLA through her review of Graziadio’s paperwork, controlled Graziadio’s return ability to return to work and under what conditions, and was responsible for sending nearly all communication regarding Graziadio’s return to work after FMLA leave. Moreover, the HR Director instructed other human resources and payroll employees to refrain from communicating with Graziadio. Based on the totality of the facts, the Second Circuit found that the HR Director was an “employer” and could therefore be held individually liable for violations of the FMLA.

This decision serves as a chilling reminder that HR Directors, especially in the Second Circuit, need to be vigilant in complying with the requirements of the FMLA, mindful of their role in administering FMLA leave and tread cautiously when terminating employees.  Employers should also provide routine and updated training on FMLA leave administration and seek legal counsel prior to terminating employees who take FMLA leave in order to minimize exposure and the likelihood of individual liability.

For more information regarding FMLA procedures and best practices to mitigate liability, please contact Dina M. Mastellone, Esq., Director of the firm’s Human Resources Practice Group, at dmastellone@nullgenovaburns.com or 973-533-0777.

U.S. Department of Labor Extends FMLA Benefits to Same-Sex Spouses in States That Recognize Same-Sex Marriage

As reported in the Wall Street Journal (“U.S. Extends Family Leave to Same-Sex Couples,” August 9, 2013, by Melanie Trottman and Kris Maher) and Employment Law 360 (“Labor Dept. Extends FMLA Coverage To Same-Sex Spouses,” August 12, 2013, by Alex Lawson), the U.S. Department of Labor (“U.S. DOL”) Secretary Tom Perez told agency employees in a memo that U.S. DOL guidance documents had been revised to remove references to the Defense of Marriage Act (“DOMA”), and explain that FMLA benefits for same-sex spouses are available in states that recognize same-sex marriage.  The fact that such benefits are only available in states that recognize same-sex marriage was confirmed by a Labor Department Spokesman as reported by Employment Law 360.  The U.S. DOL choose not to post the memo to agency employees on its website or issue a press release regarding the memo.  The U.S. DOL guidance comes in the wake of the U.S. Supreme Court’s June 26, 2013 historic decisions on same-sex marriage in United States v. Windsor,  No 12-307, 570 U.S. ____ (2013), and Hollingsworth v. Perry, No. 12-144 (2013).  The Court’s decision in United States v. Windsor struck down the provision in DOMA which restricted the definition of “marriage” and “spouse” to heterosexual marriages for all federal laws.  The result is that there is now no definition of “marriage” or “spouse” under federal law.

Note that the DOL guidance does not represent a change in the law, as employment lawyers, including this firm, have interpreted the U.S. Supreme Court’s decision as extending federal benefits to same-sex spouses in those thirteen (13) states and the District of Columbia that recognize same-sex marriage.  While New Jersey does not recognize-same sex marriage, New York does, and employers in New York would be affected by the U.S. DOL’s ruling. However, the guidance is an important first step by the U.S. DOL to provide direction to employers as several questions remain such as whether the U.S. DOL will eventually extend FMLA benefits to same-sex couples in states that don’t recognize same-sex marriage, which would likely require new regulations.  Another difficult issue remains as to what employers should do where employees in same-sex marriages move to states where same-sex marriage is not recognized.  Employers are advised to continue to consult with their Human Resources & Employment outside counsel for guidance in this developing area of the law.

For more information on the implications of the U.S. DOL’s new guidance on FMLA benefits and any other leave issues, please contact Dena B. Calo, Esq., dcalo@nullgenovaburns.com, Director of the Human Resources Practice Group and Partner in the Employment Law & Litigation Group, or Harris S. Freier, Esq., Associate in the Employment Law & Litigation Group, at hfreier@nullgenovaburns.com.