After more than a year of waiting, the Workers’ Compensation Board finally published the regulations implementing the New York Paid Family Leave Law, on July 19, 2017. Employers are now officially on notice to provide paid “family leave” – e.g. time off for the birth or adoption of a child, or to care for a sick spouse – to the existing framework of leave options.
The law affects all employers whose services are localized within the State of New York. Public-sector employers are not per se covered, unless they opt in. Please be advised that even employers based outside New York State may be covered, if their employees work in New York. Employees are eligible for benefits once they have been continuously employed for at least 20 hours per week for 26 weeks, or on their 175th day of continuous work for under 20 hours per week.
The first steps each employer must take are:
- Arrange for insurance-carrier coverage;
- Determine employee-contribution start date and notify employees;
- Obtain informational posters from the insurance carrier;
- Draft and publish personnel policies regarding the PFL.
The information in this Alert is intended to provide a basic framework for employers as they begin to navigate the implementation of this new leave benefit.
- Contribution and funding:
- This paid leave is funded through employee-only contributions. Employers are not required to contribute on behalf of their employees.
- Employers are currently permitted to withhold payroll deductions for these contributions; however, employers will be required to make these deductions as of January 1, 2018. The employee contribution rate for coverage beginning January 1, 2018, is 0.126% of the lower of (i) each employee’s average weekly wage, or (ii) the statewide average weekly wage of $1,305.92.
- Employers may deduct contributions even before employees are eligible to take this leave.
Some clients have been notified by their employees’ bargaining representatives that they cannot make deductions without negotiating about: the deductions’ start date, employer contributions, employee eligibility for family leave, the relationship to existing CBA provisions, the insurance policies being considered, coverage issues for employees with multiple employers, coordination of family-leave benefits with existing healthcare funds and plans, and continuation of health care during family leave. Please feel free to contact us if you have received a letter of this nature and would like to discuss a response approach.
- Short-term employee waiver: Employers must offer the option for waiver: If an employer hires a short-term employee – that is, if the employee works at least 20 hours per week and will not work 26 consecutive weeks, or the employee works fewer than 20 hours per week and will not work 175 days in a 52-week period – the employee may sign a waiver to opt out of the family-leave deductions. If the employee continues to work, the waiver will be revoked, and the employer may begin deducting contributions within 8 weeks of the determination resulting in the employee’s scheduling change. The employer may also be able to deduct retroactive contribution amounts, after notifying the employee.
- Reimbursement by insurance carrier: If an employer makes an advance benefits payment to an employee who then goes on leave, or pays an employee as if paying wages while the employee is on leave, the employer may be entitled to reimbursement by the insurance carrier out of any benefits due.
- Process for employees taking leave:
- Employees must provide 30 days’ notice, or as much notice as practicable, to use the family-leave benefits.
- Employers may prohibit two employees working for the same employer from using simultaneous leave to care for the same family member.
- Benefit payments are due from the insurance carrier on the 14th day of leave, and must be paid to the employee within 4 business days of (i) that date or (ii) the filing of required proof of claim, whichever is later. Benefits will then be payable biweekly (or however wages are usually paid).
- If an employer or insurance carrier reject a claim for benefits, the employee must be notified within 18 days of filing the proof of claim.
- Length of Leave: In 2018, eligible employees may receive up to 8 weeks of paid family leave. Employees cannot take more than 26 weeks of New Yok State short-term disability and family leave in one 52-week period.
Each year, until 2021, the amount of time off and the amount of paid benefit will increase, as explained below:
|Starting Date||Amount of time off||Amount of paid benefit|
|1/1/2018||Up to 8 weeks||Lower of 50% average weekly wage or 50% NYSAWW|
|1/1/2019||Up to 10 weeks||Lower of 55% AWW or 55% NYSAWW|
|1/1/2020||Up to 10 weeks||Lower of 60% AWW or 60% NYSAWW|
|1/1/2021||Up to 12 weeks||Lower of 67% AWW or 67% NYSAWW|
- Amount of pay during leave: The amount of the paid benefit will be the lower of (i) each employee’s average weekly wage, or (ii) the statewide average weekly wage ($1,305.92 in 2017). The minimum benefit amount is $100 per week. The smallest increment of paid leave is one full day (i.e. not hourly).
- Combining paid time off (PTO) with the family-leave benefit: Employees must use paid family leave concurrently with FMLA leave, unless the employer has a policy explicitly permitting otherwise. Each employee may choose whether to use paid family leave and PTO concurrently. Employees may not combine this family-leave benefit with short-term disability leave.
As always, collective-bargaining agreements may alter these baseline rules for covered employees.
- Insurance carriers: Family-leave benefits are covered by the same short-term disability-insurance carriers that most employers in New York use. Employers should not need to change disability-insurance carriers simply to access family-leave benefits, because the law requires all New York State-licensed insurance carriers to provide family-leave coverage, or else leave the insurance market altogether.
- Addition to employee handbooks: Employers must include information on the paid family leave benefit in employee handbooks and personnel policies. This may require drafting new policies effective January 1, 2018.
- Information posters: Before January 1, 2018, employers must obtain from their insurance carriers an informational poster, regarding family-leave coverage, to be hung with other employment-related posters.
- Penalties for non-compliance: Any employer who does not comply with the family-leave benefit requirements may be liable to each employee owed money under this new law. The employer will also be fined up to 0.5% of the weekly payroll for the entire period of the violation, plus up to $500.