If you have employees in New York, prepare now for New York Paid Family Leave Law

New York’s Paid Family Leave Benefits Law (PFLBL) is designed to provide broad paid family leave benefits through the state’s existing Disability Benefits Law for all employees who have worked at least 26 consecutive weeks (or 175 days for part-time employees) for the employer. The law also will provide such employees with the right to a leave of absence and guaranteed reinstatement even if they are not protected by the Family and Medical Leave Act (FMLA).

The PFLBL will require employers to review their family and medical leave policies, benefit claim procedures and processes, employment agreements, and collective bargaining agreements (if any) to ensure full compliance.

Employers have some time to prepare, as the new law will not become effective until January 1, 2018. PFL benefits will be funded exclusively through employee contributions deducted from payroll beginning in July 2017.

The law provides three specific situations for when employees who have worked for the employer for 26 consecutive weeks will be entitled to a paid leave of absence from work under the PFL:

1. When paid leave is necessary to provide care, including physical or psychological care, to their family members due to a family member’s serious health condition;
2. To bond with their newborn children during the first year of the child’s life, or in the case of adoption or foster care placement, for the first year after the placement of a child with the employee; and
3. For any qualifying reason as provided for under the federal Family and Medical Leave Act arising from the employee’s spouse, domestic partner, child, or parent being on active military duty, or, alternatively, being notified of an impending call or order to active military duty.

The program will be implemented in four phases over the course of four years and the benefits will increase on an annual basis. The four phases are as follows:

• January 1, 2018 – employees may take up to 8 weeks of PFL in any 52 consecutive week period at a rate of the lesser of 50% of the employee’s weekly wage or of the State’s current average weekly wage, which was $1,305.92 for calendar year 2016.
• January 1, 2019 – employees may take up to 10 weeks of PFL and receive the lesser of 55% of employee’s weekly wage or of the State’s current average weekly wage.
• January 1, 2010 – employees may take up to 10 weeks of PFL and receive the lesser of 60% of the employee’s weekly wage or of the State’s current average weekly wage.
• January 1, 2021 – employees may take up to 12 weeks of PFL and receive 67% of the lesser of the employee’s weekly wage or of the State’s current average weekly wage.

Similar to short-term disability benefits, the regulations require an employee to make a request for PFL to the insurance carrier that administers the PFLBL plan or to the self-insured employer, and supply copies of supporting documentation (e.g., a birth certificate or medical certification) that gives the details surrounding the family leave requested.

The PFLBL should not impose significant costs on New York employers, employees, or insurance carriers. The regulations work to implement the statute while avoiding any costs above what the law requires. Because PFLL benefit amounts will be based on a percentage of an employee’s weekly wage up to a cap based on the New York State average weekly wage (“NYSAWW”), the maximum employee contribution will be based on a similar capped percentage. Thus, for coverage beginning January 1, 2018, the maximum employee contribution will be 0.126% of an employee’s weekly wage not to exceed the NYSAWW (currently $1,305.92).

Going forward, the PFLL authorizes the DFS to set the maximum employee contribution on an annual basis on or before September 1 of each year.

The regulations further provide that the cost of the premium for the addition of paid family leave to an employer’s disability benefits policy will be covered in total by the employee’s contribution. If an employer wants to forego getting insurance and to self-insure PFL benefits, the employer must elect to do so by September 30, 2017, by filing appropriate paperwork with the State.

So What Now?

While PFLBL should not impose a direct cost on employers, PFLBL benefits will be administered in a similar manner as the way short-term disability benefits are administered. Initially, all employers must be aware that the proposed regulations require employers to display or post a notice in plain view where all employees and applicants can readily see it with information about PFLBL, including on how to file a complaint. If many of the employer’s employees do not read and write in English, the notice also must be in a language in which the employees can read and write. Further, employers must follow all federal and state laws for notices provided to sensory-impaired individuals.

Employers also must commence the deductions for the fund in mid-2017 and ensure appropriate processes are implemented to do so.

Under the regulations, employers will be expected to update their employee handbooks to include written guidance on the PFLBL. The written guidance must include all of the employee’s rights and obligations under the PFLBL, including information on how to file a claim for paid family leave. If an employer does not maintain an employee handbook, it is still required to provide written guidance to employees on the new paid family leave benefit.

Employers must also post a notice concerning the PFLBL in plain view where employees and applicants can readily see the notice. The posted notice must be in a form prescribed by the Chair of the Workers’ Compensation Board, who has not yet issued a form notice.