The New York Paid Family Leave (“NYPFL”) is a wage-replacement program fully funded by employees to bond with a child, care for a close relative with a serious health condition, or ease family obligations when a family member is called into active military service. However, NYPFL is not available to care for the employee’s own condition; rather the employee may use leave available under the Family Medical Leave Act (“FMLA”). Both full-time and part-time employees are eligible for the benefits after meeting the eligibility requirements.
Beginning in 2018, an employee will be able to receive benefits at 50% of the average statewide weekly wage. By 2021, an employee will receive 67% of his/her average weekly wages, capped at 67% of the average statewide weekly wage. For 2016, the New York State Average Weekly Wage (“NYSAWW”) was approximately $1,305.92 (the amount is determined each year by 3/31).
On July 19, 2017, the Notice of Adoption for Paid Family Leave was published in the New York State
Register (beginning on page 22), finalizing the NYPFL regulation. View USI’s outline of the public comments and their effect on the final regulation.
|Paid Leave – Phases|
|January 1, 2018||8 weeks||50% of AWW|
|January 1, 2019||10 weeks||55% of AWW|
|January 1, 2020||10 weeks||60% of AWW|
|January 1, 2021||12 weeks||67% of AWW|
The Superintendent of Financial Services has set the maximum employee contribution at 0.126% of an employee’s weekly wage, not to exceed 0.126% of the NYSAWW. As a result, the employee contribution is capped at $1.65 per week for 2018. The contribution rate is determined annually by 3/31.
NY Worker’s Compensation Board – http://www.wcb.ny.gov/PFL/pfl-regs.jsp
Determine Employee Population
The NY Paid Family Leave (“NYPFL”) requirement applies to New York State employers regardless of size. However, employers that are domiciled outside of New York, must determine the applicability of the NYPFL requirements.
Any employee working in New York would be subject to the NYPFL requirements; employers must be registered with the State of New York to do business in New York.
Remote Workers – Employers outside of New York with employees working remotely from their home located in New York will also be subject to the NYPFL requirements. Verify the employee’s working status and speak to counsel for treatment and other considerations.
Locate Employer Policies
Employers should review internal policies related to sick leave, paid time off, family leave, paternity and maternity leave, and any other leave available to employees. These policies will need to be reviewed and updated to comply with the NYPFL requirements.
Documents to locate:
Employers should not:
- Do nothing – Preparation is an important and extensive process. Begin gathering information as soon as possible.
- Begin NYPFL withholding – While the annual rate is available, the final regulations were just released and carriers are not yet ready to issue policies. Employers should wait to withhold contributions until policies are in place.
- Begin employee or staff education – The final regulations were just issued on July 19, 2017 and employers will need to begin assessment and changes to policies. At this point, employers should update staff on changes that may be coming and education that may be required.
Frequently Asked Questions
|Q1||Why is an employer allowed to deduct the contributions beginning July 1st when the PFL does not go into effect until January 2018?|
|The rate is determined on an annual basis. As such, the employer is permitted to take premiums in advance if payments to carriers are made in advance.|
|Q2||New York issued the employee weekly rate contribution for 2018, I would like to begin deductions from employee’s payroll, can I?|
|No, an employer can only collect the premium from the employee’s payroll to pay for the PFL coverage.
– Fully Insured Coverage – Carriers are not issuing coverage yet. As such, there are no premiums to pay.
|Q3||What if I already began deducting the weekly contribution rate from employee’s payroll?|
|The amount should be returned to the employee and taxed.|
|Q4||I don’t understand how PFL will work, how will a $1.65 be enough to cover the paid leave requirement?|
The PFL requirement will function like insurance. Insurance allows a group of people to share the risk of coverage by pooling the premiums that may pay benefits to some and not others. The $1.65 weekly contribution is a premium that is used to pay a claim in the present or in the future. Employees do not get the premiums back and the insurance company builds its reserves if claims are not paid.
New York has determined that $1.65 will be sufficient to cover the PFL requirement for the first year.
|Q5||I’ve read employers are not required to contribute, is this really the case?|
|Yes, employers are not required to make any contributions to PFL if the employer is fully insured. BUT, the employer may have to pay for claims under PFL if it self-insures and fails to collect sufficient premium and too many employees take PFL.|
|Q6||My company already offers paid leave to employees and it seems that it is much more expansive and generous that the PFL requirement. Does my company need to have PFL coverage?|
|Yes, employers must comply with the PFL requirements by having an insured policy or self-insured coverage. Similar to NY disability, if the employer has greater benefits than the legal requirement, the employee may not need to make a claim against the PFL policy or if he/she makes a claim, the employer must be reimbursed the PFL amount since the employee cannot receive greater than 100% pay.|
|Q7||Are there approved carriers that will provide PFL coverage?|
|Yes, similar to NY disability, the state will approve certain carriers to offer PFL. These carriers must comply with state insurance requirements. For now, the same carriers that offer DBL will be allowed to offer PFL coverage.|
|Q8||Employees are already requesting PFL and asking how it will work with other leave options, what should I say?|
|Explain to employees that the regulations have just been finalized on July 19, 2017, and you will provide the proper notice in the time prescribed by the regulation.|