New York State has enacted a Paid Family Leave Benefits Law (“PFL Law”) to provide paid family leave to in-state employees beginning January 1, 2018. The Workers’ Compensation Board, which administers the PFL Law, issued proposed regulations for the Law in early 2017, and recently released updated proposed regulations, which were open for comment through June 23, 2017. These regulations implement and clarify practical questions raised by the PFL Law.
Eligibility For Paid Family Leave
Paid family leave will be phased in over time, beginning with up to 8 weeks of leave starting on January 1, 2018 and increasing to up to 12 weeks of paid family leave beginning January 1, 2021. Employees eligible for the paid family leave are those who have worked full-time for at least 26 consecutive weeks, or part-time for at least 175 days.
Paid family leave may be taken to: (i) care for or bond with a child during the first 12 months after the child’s birth, adoption, or placement with the employee in foster care; (ii) provide physical or psychological care to a family member with a serious health condition; or (iii) attend to a qualifying exigency arising out of the fact that the spouse, domestic partner, child, or parent of the employee is on active duty in the U.S. Armed Forces, or has been notified of an impending call or order to active duty.
Paid family leave under the PFL Law is not available: (i) to employees who are on administrative leave from their employment; (ii) to employees who are currently receiving sick pay or paid time off from their employer; (iii) for any day on which the employee works at least part of the day during the same working hours as those for which paid family leave benefits are claimed; or (iv) any time an employee is receiving total disability benefits pursuant to a claim for workers’ compensation, volunteer firefighters’ benefits, or volunteer ambulance workers’ benefits. However, if an employee is receiving partial disability payments, the employee can also receive benefits under the PFL Law as long as the amount of paid family leave benefits when combined with the disability benefits does not exceed the employee’s average weekly wage.
Employees who take a leave of absence under the PFL Law are entitled to return to the same position they held before going on leave or a position comparable in benefits, pay and other terms and conditions of employment. Employers may not discriminate or retaliate against an employee for filing for or receiving benefits under the PFL Law.
Employers must maintain employees’ existing health benefits while they are on paid family leave, and may require employees to continue to pay their share of health insurance premiums. Employers may terminate health insurance coverage for employees who are more than 30 days late in paying their premium, provided they mail a notice of the termination to the employee at least 15 days before the health insurance coverage will be terminated.
The PFL Law will provide leave and payments according to the following schedule:
- As of January 1, 2018, employees may take up to 8 weeks of leave during a 52-week period and receive the lower of 50% of their average weekly wage or the state’s average weekly wage (which is currently $1,305.92);
- As of January 1, 2019, employees may take up to 10 weeks of leave during a 52-week period and receive the lower of 50% of their average weekly wage or the state’s average weekly wage;
- As of January 1, 2020, eligible employees may take up to 10 weeks of leave during a 52-week period and receive the lower of 60% of their average weekly wage or the state’s average weekly wage; and
- As of January 1, 2021, eligible employees may take up to 12 weeks of leave during a 52-week period and receive the lower of 67% of their average weekly wage or the state’s average weekly wage.
Paid family leave will be funded through employee payroll contributions. Employers that have a disability benefits policy with the New York State Insurance Fund will be automatically covered for purposes of the PFL Law under their policy effective January 1, 2018. Alternatively, employers can purchase paid family leave insurance coverage from another carrier or self-insure.
On June 1, 2017, the New York State Superintendent of Financial Services set the maximum employee contribution amount at the lower of 0.126% of an employee’s weekly wage and 0.126% of the state’s average weekly wage, which means a maximum weekly contribution of $1.63. Employers may begin withholding the weekly employee contribution on July 1, 2017.
Employees who are not eligible for paid family leave because they do not work full-time for at least 26 consecutive weeks or part-time for at least 175 days must be provided with the option of filing a waiver of paid family leave benefits. This waiver exempts non-eligible employees from having payroll contributions withheld from their wages. It will be automatically revoked if the employee’s work schedule is changed such that the employee will work at least 26 consecutive weeks, or at least 175 days as a part-time employee.
Requesting Leave Payments
When the need to take leave under the PFL Law is foreseeable, employees must provide their employer with at least 30 days’ notice. If the need to take leave is unforeseeable, notice must be provided as soon as practicable. Employees must submit a Request for Paid Family Leave form (to be created by the New York State Workers’ Compensation Board) and supporting documentation to the employer or insurance carrier to request paid family leave. Supporting documentation includes a birth certificate or documentation of pregnancy or birth from a health care provider for an employee who gives birth, and certification from the care recipient’s health care provider for an employee who is providing care to a family member with a serious health condition. Employers can also designate an alternative mechanism for employees to request paid family leave.
Other PFL Law Requirements
The PFL Law contains the following conditions regarding other employee benefits and leaves of absence:
- Employees may not receive New York State disability benefits and PFL Law benefits or New York City Earned Sick Leave Act payments for the same period of time. Employees who are eligible for both disability benefits and PFL Law benefits may only receive a total combined amount of 26 weeks of disability benefits and PFL Law benefits in a 52-consecutive-week period;
- Under the proposed regulations, employees must use paid family leave and federal Family and Medical Leave Act (“FMLA”) leave concurrently, and may not use the PFL Law to extend FMLA leave;
- The updated proposed regulations permit an employer to designate a leave as both an FMLA and a PFL Law leave, even if the employee declines to apply for PFL Law payments;
- According to the updated proposed regulations, an FMLA leave taken by an employee for his or her own serious health condition does not qualify as paid family leave under the PFL Law, and does not reduce the amount of paid family leave for which an employee is eligible. This may result, in certain circumstances, in an employee being eligible for more than 12 weeks of leave in a twelve-month period;
- Employers can permit employees to use their accrued but unused paid time off while on paid family leave so that they receive their full salary. However, employees cannot be required to do so; and
- Employees taking paid family leave are not entitled to accrue seniority or other benefits while on leave.
Employee Handbooks: Employers must update their employee handbooks to include information regarding employees’ rights under the PFL Law, including how they can file a claim for paid family leave. If an employer does not have an employee handbook, it must provide employees with written guidance on the PFL Law separately.
Postings: Employers must post a notice about the PFL Law in plain view where employees and applicants can readily see it. Such a notice will be made available by the New York State Workers’ Compensation Board.
Collective Bargaining Agreements
Collective bargaining agreements can provide rules that differ from the PFL Law regulations, subject to approval by the Workers’ Compensation Board, provided the time period for eligibility is not greater than required by the PFL Law. The updated regulations also permit the union to be responsible for time records and payroll deductions related to the administration of PFL Law benefits.
Penalties for Non-Compliance
Employers that fail to collect employee contributions to provide paid family leave coverage or fail to provide coverage by purchasing insurance or self-insuring will be liable for payment of paid family leave benefits, and will waive the right to collect employee contributions for that period. In addition, employers that fail to provide paid family leave coverage may be subject to a fine of 0.5% of their weekly payroll for the period when there was no coverage, plus a fine of up to $500. Disputes relating to a claim for paid family leave will be subject to arbitration pursuant to the New York Workers’ Compensation Law.
Recommendations for Employers
To prepare for implementation of the PFL Law, employers should consider taking the following steps:
- Create written paid family leave policies to notify employees of their rights under the law;
- Review and revise paid family leave policies in employee handbooks and postings to incorporate the paid family leave rules;
- Review insurance policies and consider whether to obtain insurance coverage or to self-insure; and
- Prepare to begin payroll deductions with payroll service providers, which can start on July 1, 2017.