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New York to Workers: “Pay for Your Own Family Leave” (And Everybody Else’s)

NY's Family Leave Law mandates taxes for all, benefits for few

Early in January, New York City subway cars were papered with cloying advertising posters, picturing family members caressing one other, snuggling with infants. No longer, the ad copy proclaimed, will New York State workers “have to choose” between working and “bonding,” New York State’s Paid Family Leave (PFL) having become effective on New Year’s Day.

By the beneficence of PFL, any employee wanting eight weeks off to “bond” with a new child; care for a close relative; or “prepare for” a military deployment can take off from work, still get a paycheck, and have their vacant job awaiting their return.

Apparently a particularly enterprising (if not industrious) worker can take newborn leave one year, parent care leave the next, and military deployment in the third . . . and start a new cycle in the fourth.

​Promising pay without work, the Great State of New York thus reverses Man and Woman’s exile from the Garden of Eden.

​That’s an exaggeration, but not for its ambitious Governor’s lack of determination to improve upon God’s work. Pulled to the left (which among New York Democrats is quite left) in his upcoming primary, he’s lately boasted of having pushed the most generous paid family leave in the nation.

​It’s an exaggeration, though, because New York’s mandates “paid leave,” but doesn’t pay for it. Nor do employers.

​“Paid” Family Leave requires workers to pay for it, themselves.

​Here’s how – PFL mandates employers to buy PFL insurance (sound familiar?), and allows them to deduct the cost of the premiums from employees’ paychecks. Employees can’t opt out. Whether or not they want the insurance, whether or not they will ever or could ever take leave, its cost adds to the pile of payrolls deductions comprising the yawning gulf between gross income and take-home pay.

​That word “paid” in Paid Family Leave is a further misnomer because it’s not eight weeks of what you’re actually paid. For 2018, it’s only half pay (ratcheting up to two-thirds in 2021). And it’s not even half of one's actual pay, but only half of the hypothetical New York State “average employee’s” pay (or less).

Some Arithmetic:

​That “average” New York State worker earns $1,305.92 per week or about $68,000 per year. Their annual payroll deduction for FPL insurance is $85.56, .126% of wages. Those earning less than average pay also pay .126% of their actual wages, which is fewer dollars, but those who earning more pay no more, because they are capped at $85.56, the same the “average” worker pays.

​Eight weeks’ pay to that average $68,000 worker is $10,441.60; half-pay is $5,225.80. So, it will take 61 workers paying their $85.56 premiums, to cover just one who takes leave. ($5,225.80 ÷ $85.56 = 61. (It actually takes more of them, considering that the below average workers paying less, and the bureaucratic costs of running this program, the insurance companies’ administration costs and profits. Yes, even not-for-profits make “profits” – taking in more revenue than expenses going out, else they don’t survive; that’s for another column.)

​Should we worry that if two workers take leave, it will take 122 of them to cover it . . . and so forth, so if a million workers took leave, it would take 61 million employees – more than the whole population of New York State – to cover the cost?

​Probably not. The State and the insurance companies that underwrite its new PFL mandate probably haven’t designed another entitlement program designed to bankrupt themselves (although there’s ample precedent of miscalculating the cost of “entitlements”).

The Sleight of Hand:

​They must be figuring that the great majority of workers won't ever take paid family leave: either they won't have new children to bond with, don’t have infirm parents to care for, won’t go off to war (or “deployment,” war zone or not) -- or for the economic reasons discussed presently -- remain on the job, paying out their premiums, so that the small minority, one in 61, can take their leave.

​Why so few? Well, first, how many “average” workers have sufficient savings to make ends meet at half-pay for eight weeks? That alone reduces the girth of the leave-taking class.

​There are also the employees who have already accrued sick leave or vacation time, so they can already take time off at full pay, and thus have neither need nor appetite for FPL’s half-pay, even though they’re paying for it anyway.

​All those earning more than the $68,000 average New York worker will take an even bigger pay cut, since PFL pay is capped at half the average. That cap is $652.50 per week, so both the $68,000 and the $138,000 employees (and everybody up from there) all become $34,000-a-year employees. The bigger the pay cut, the less likely the employee will take the leave they’re forced to buy insurance for.

​At the other end of the wage scale are the below average earners, among them those soon to make the $15 minimum hourly, who will earn $30,000 per year. Half-pay drops them back to $7.50 per hour, on which we’re told no one can survive, so they surely can’t take FPL’s “half-paid” leave without risking personal famine.

​So, who’s left to benefit? Those New Yorkers earning around the average, who do have excess savings, and -- being New Yorkers -- have really cheap (controlled or subsidized) rents. And the really affluent, couples with two six-figure incomes, augmented by interest and dividends, with cash in the bank, who can afford to live on only one of their plump paychecks for a while.

But there’s no benefit to the many who pay the insurance but don’t take leave, either because they don’t have the circumstances that qualify for it, or they can’t take the pay cuts. Imposing a mandatory cost on all employees by pretending to create a benefit that only a few can actually take, should qualify as a consumer fraud.

​The State and the insurance companies may well have reckoned that only one of 61 workers will benefit, while everybody else, the other 98.4% of New York workers, bear only the brunt and burden of this most recent expansion of the Nanny State.

​As usual.

R.L.

© 2018 Ron Litchman

Welcome to Political Storm Ron! Nice play into that catch. There's always a catch to sly things such as take all you want paid leaves. Gladly, you masked it. Poor new yorkers

2

Welcome back Ron! I've missed your writing!

2

And a Democrat decreed this? Shows you their compassion for the plight of middle class America ha!

2

How on earth could something like this pass?

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