New York recently enacted the New York Paid Family Leave Law (PFL), which will require New York employers to fund a new state family leave program that is broader reaching than the federal Family and Medical Leave Act (FMLA) in benefits provided and employee eligibility. The PFL program will apply to all employers except sole proprietorships—a requirement that will substantially affect smaller employers that are not subject to federal FMLA requirements. The law will be phased in over four years starting on January 1, 2018, and may be funded completely by small deductions from employees’ paychecks. Employers may start making the new deductions as early as July 1, 2017, to help them build up the required funds needed for when the law takes effect in January. Employers should make certain they cooperate with and consult with their payroll providers regarding these new deductions.
The PFL program will allow employees to receive 12 weeks of paid leave at the lesser of 67 percent of their weekly salary or 67 percent of the state’s average weekly salary, which is currently about $1,300. To be eligible for the PFL benefit, full-time employees must have worked for the employer for 26 consecutive weeks, or 175 days for part-time employees. The program has no minimum hour requirement to qualify, but any employee who is not working or is on administrative leave from their employer is not eligible.
An employee can take leave under PFL for the following reasons:
- to provide care, including physical or psychological care, for the employee’s family member (child, parent, grandchild, grandparent, spouse, domestic partner) who suffers from a serious health condition;
- to bond with the employee’s child during the first twelve months after the child’s birth, adoption, or placement of the child in foster care with the employee; or
- because of any qualifying exigency as interpreted under the FMLA, arising out of the fact that the spouse, domestic partner, child, or parent of the employee 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.
Notably, and in contrast with the FMLA, the PFL program does not allow employees to claim the benefit for their own health issues or serious health condition.
The PFL program outlines specific notice requirements for both employees and employers. Employees must give 30 days’ notice to their employer when the reason for leave is "foreseeable." Foreseeable reasons include the expected birth of a child, the anticipated date of placement for an adoption or foster care, or a planned medical treatment for a family member. When advance notice is not possible, the employee must give notice "as soon as practicable" under the circumstances. Employers must include information about workers’ rights under the PFL program in their employee handbook and prominently post such information in an area visible to employees.
As stated above, the PFL program may be entirely funded by employees, so employers have the option of incurring none of the costs. Employers may either obtain an additional PFL insurance policy or self-insure. For employers that already have insurance policies, PFL benefits will be included under disability insurance, and the employer’s insurance provider can underwrite the additional PFL benefit into the plan. Any potential increase in premiums for employers may be paid for by the employees through payroll deductions. The New York State Department of Financial Services has set the maximum contribution rate at 0.126 percent of the lesser of the employee’s weekly wage or the state’s average weekly wage, which amounts to a maximum payroll deduction of about $85 per year using 2017 statewide wage data.
The PFL program presents some administrative challenges for employers. For example, employers must properly administer the PFL program and give employees the leave they are entitled to under the law, and if that employee is also subject to the FMLA, at the same time administer leave under the FMLA. Since the PFL and the FMLA can run concurrently, if the reason for the employee’s leave qualifies under both the state and federal laws, employers need to inform employees who take PFL that it will run concurrently with the FMLA. Employees will not be allowed to double dip under both statutes. PFL also requires that employers continue health insurance while employees are on leave and that the employees’ jobs be protected upon their return, which is similar to leave requirements under the FMLA.
The payment schedule for employees taking the benefit will be introduced based on the following schedule:
- On or after January 1, 2018, an employee can take up to eight weeks of paid time off in a 52-week period and receive at least 50 percent of the employee’s average weekly wage or 50 percent of the state average weekly wage, whichever is less;
- On or after January 1, 2019, an employee can take up to 10 weeks of paid time off in a 52-week period and receive at least 55 percent of the employee’s average weekly wage or 55 percent of the state average weekly wage, whichever is less;
- On or after January 1, 2020, an employee can take up to 10 weeks of paid time off in a 52-week period and receive at least 60 percent of the employee’s average weekly wage or 60 percent of the state average weekly wage, whichever is less; and
- On or after January 1 of each succeeding year, an employee can take up to 12 weeks of paid time off in a 52-week period and receive at least 67 percent of the employee’s average weekly wage or 67 percent of the state average weekly wage, whichever is less.