New York’s Paid Family Leave Benefits Law will provide paid family leave benefits to eligible employees of private sector employers and of public sector employers that opt into the program (subject to any collective bargaining requirements) beginning January 1, 2018. The Workers’ Compensation Board’s proposed regulations would allow employers to now start withholding from employee paychecks to fund the program. These regulations are not yet final, however, and the final regulations may not be released until late July or sometime in August 2017. This time frame should still allow employers time to prepare in advance of the effective date.
Permissible Purposes for Leave and Eligibility:
The law provides for a phased in schedule of paid leave entitlement for eligible employees taking time away from work (i) to care for (including physical and psychological care) a family member with a serious health condition, (ii) to bond with a child after birth or placement for adoption or foster care within the first 12 months after the birth or placement, or (iii) because of any qualifying exigency arising from the fact that an employee’s spouse, domestic partner, child or parent is on active duty (or has been notified of an impending call or order to active duty) in the armed forces of the United States.
Paid family leave (“PFL”) benefits will be available to employees who: (i) regularly work 20 or more hours per week and are employed for at least 26 consecutive workweeks preceding the first full day family leave is taken; and (ii) regularly work less than 20 hours per week and are employed for at least 175 days preceding the first full day leave is taken. (In accordance with the proposed regulations, an employee who does not meet these eligibility requirements must be provided with the option of filing a waiver of benefits, exempting him/her from payroll deductions. The waiver, however, will automatically be revoked within 8 weeks of any change in the employee’s regular work schedule that requires the employee to continue working for 26 consecutive weeks or 175 days in a 52 consecutive week period.
Generally, private employers with at least one employee will be required to provide PFL benefits to eligible employees. Public employers may opt into the program (subject to any collective bargaining requirements). A summary of additional considerations for public sector employers will be forthcoming.
Starting January 1, 2018, eligible employees may take up to 8 weeks of leave for one of the permissible purposes set forth above at 50% of their salary, capped at an average weekly wage as defined annually by New York state. (The 2016 average weekly wage is $1,305.92, which would set the cap at $652.96 per week). The leave entitlements will then be phased in as follows:
- On or after January 1, 2019, up to 10 weeks of paid benefits in any 52-week period at 55% of the employee’s average weekly wage, but not to exceed 55% of the New York state average weekly wage.
On or after January 1, 2020, up to 10 weeks of paid benefits in any 52-week period at 60% of the employee’s average weekly wage not to exceed 60% of the New York state average weekly wage.
On or after January 1, 2021, and for each year thereafter, employees may receive up to 12 weeks in any 52-week period at 67% of the New York state average weekly wage.
This time must run concurrently with FMLA leave benefits. The proposed regulations would require that the employer notify the employee as such. An employee will not be entitled to paid family leave when his/her family leave combined with the disability benefits previously received exceeds 26 weeks during the same 52-week consecutive calendar weeks.
Like the federal Family and Medical Leave Act, leave taken under the New York Paid Family Leave Benefits Law is job protected. An employee who returns from leave must generally be restored to the same or a comparable position. Additionally, employers must maintain existing health benefits for employees while they are on leave. Employers may, however, require employees to continue to pay their share of health insurance premiums.
Employees will be responsible for notifying the employer if they intend to apply for PFL benefits. The Workers’ Compensation Board will be publishing forms to be used for this purpose. The proposed regulations would require the employee to send the information directly to the carrier to review the claim. If the employer self-insures, the employee must give the requisite forms and documentation to the employer, who will then be responsible for reviewing the information and deciding if the claim qualifies under PFL, processing the claim, and making benefit payments.
Funding of Benefit:
PFL benefits will be funded by deductions to be taken directly from employees’ wages. On June 1, 2017, the New York State Department of Financial Services announced that the weekly employee deduction rate for coverage beginning January 1, 2018 will be the lower of 0.126% of an employee’s weekly wage and 0.126% of the New York state average weekly wage, which means a maximum weekly contribution of $1.65 per week per employee. The proposed regulations, not yet finalized, envisioned that employers would be permitted to start taking deductions on July 1, 2017.
To prepare to implement the Paid Family Leave Benefits Law, employers should consider doing the following:
- Draft a written policy or guidance for employees regarding PFL benefits. The proposed regulations are not yet final, but are unlikely to be substantially modified. They would require employee handbooks and/or other written guidance contain information concerning paid family leave. Policies and guidance will need to be reviewed once the final regulations are published to verify consistency.
Review and determine whether you must revise existing paid family leave policies in your employee handbook given the interplay between the various leave laws.
- Be on the lookout for forms and other publications of the WCB (including the posting which would be required by the proposed regulations).
- If you are not self-insured, talk to your disability carrier as soon as possible to make sure the carrier is going to provide PFL coverage. The proposed regulations require that every carrier that provides statutory short-term disability benefits policies in New York state must also provide PFL coverage. In the revised May 2017 regulations, however, carriers will have 60 days from June 1, 2017 to decide whether to offer PFL coverage or withdraw from offering statutory disability benefits as well as PFL benefits. It is important, therefore, to begin discussions with your carriers so that you will not be blindsided by a last minute change.
- Consult with your payroll vendor regarding employee contribution calculations, as it will vary by employee and earnings.
- Set a date for taking payroll deductions in accordance with the law and regulations (once finalized). It may be helpful to involve your carrier in these discussions.