October 30, 2017
By: Kimberly Klein
Beginning January 1, 2018, New York private employers will be required to provide employee-funded Paid Family Leave (“PFL”). For most employers, the coverage will be provided through the company’s disability benefits insurance policy, and the premiums will be funded by employees through payroll deductions.
Employers that fail to provide PFL will be subject to a penalty of up to .5 percent of the employer’s total weekly payroll for the period of non-compliance and an additional fine up to $500.
Eligible employees will be entitled to take up to eight weeks of PFL in 2018; 10 weeks in 2019 and 2020; and 12 weeks in 2021.
While the law has significant implications for all private employers, companies with fewer than 50 employees who are not subject to the Family and Medical Leave Act (FMLA), which provides 12 weeks of unpaid leave to employees under similar circumstances, must now implement and manage such leaves.
Purpose of Leave and Eligibility
The law was passed to provide partial financial support and job protection for those employees who need time off from work to:
- bond with a newly born, adopted or fostered child;
- care for a family member with a “serious health condition” (includes spouse, domestic partner, child, parent, parent-in-law, grandparent or grandchild); or
- assist loved ones when a family member is deployed abroad on active military duty.
Employees will be eligible for the leave if they are regular full-time employees who have worked 26 continuous weeks or regular part-time employees who have worked 175 continuous days. Thus, existing employees who meet this criteria will become eligible for PFL on January 1, 2018; while new hires after January 1, will have to wait at least six months to receive coverage. Short-term or temporary employees who do not meet this criteria, will not qualify for the benefit.
Citizenship and immigration status have no impact on eligibility. Workers who do not have a regular employer or who work as an independent contractor, such as freelance workers, will not have coverage unless they purchase insurance separately.
The law defines a “serious health condition” of a family member as an illness, injury, impairment or physical or mental condition that involves: (1) inpatient care in a hospital, hospice or residential health care facility; or (2) continuing treatment or continuing supervision by a health care provider. Conditions that are not considered serious health conditions include cosmetic treatments (unless inpatient hospital care is required or complications develop), the common cold, flu, ear aches, upset stomach, minor ulcers, headaches (other than migraines) and routine dental work. PFL can be used to care for an eligible relative living outside of New York with proper supporting documentation.
An employee’s entitlement to family leave for the birth of a baby begins on the date of the birth. Employees who have or had a baby or adopted or fostered a child prior to January 1, 2018, may seek family leave benefits in 2018 within the first twelve months after the birth or adoption.
PFL cannot be used:
- for the employee’s own serious health condition or disability;
- in connection with prenatal conditions (PFL can apply if the employee needs time off in connection with the actual placement or adoption of a child);
- for a qualifying military event; or
- if an employee is not working and is collecting workers’ compensation.
Amount of Payments and Premiums
In 2018, employees will be eligible to receive 50 percent of their salary for the eight weeks of leave, which must be taken during the 52 weeks from the start of the leave period. In 2019 and 2020, the amount of leave will increase to 10 weeks at 55 and 60 percent of salary respectively. In 2021 and after, employees will be entitled to 12 weeks at 67 percent of salary. The amount of money an employee receives, however, will be capped at the applicable percentage of New York State’s Average Weekly Wage (NYSAWW), which currently is $1,305.92. Thus, in 2018, an employee earning $1,305.92 or more would receive weekly pay capped at $652.96, half the NYSAWW during the leave period.
In 2018, employees will be debited 0.126 percent of their weekly wage up to the annualized NYSAWW to pay for the coverage. Although the paid leave does not start until next year, employers may start making deductions from employee paychecks in 2017.
A covered employer may be responsible for payment of premiums prior to collection of all employee contributions for a policy year. Such costs are recovered from employee payroll deductions.
Notice Requirements and Job Protection
Employees must give thirty (30) days’ notice, when practical, prior to taking PFL and must provide proper documentation supporting the leave. Leave can be taken on a weekly or daily intermittent basis. When an employee takes intermittent family leave, the employer may require the employee to provide notice as soon as practicable before each day of intermittent leave.
Employees who take PFL are entitled to return to the same or comparable position upon return from the leave and will continue to receive healthcare benefits during the leave. Employers may require employees to continue paying their portion of healthcare premiums.
Employees requesting leave do not need to expressly state that they are seeking PFL. Employers must determine if PFL is being sought and, if so, designate it as such.
It is the employee’s obligation to provide the insurance carrier (or self-insured employer) with the required documentation to take PFL and failure to do so can result in denial or delay of paid leave. Thus, employees may be required to provide carriers with medical certification for a serious health condition of a family member, a copy of the military member’s active duty order or other documentation issued by the military, or birth certificate or equivalent thereof for adoption or fostering a child. Upon proper submission of documentation, the carrier must begin the payment(s) no later than 18 days from the date of request.
An employer that fails to reinstate an employee who takes PFL will be subject to discrimination and retaliation claims. Employees have two years to file such claims.
Interaction with Other Laws/Policies
The NYS Workers’ Compensation Board published regulations on July 19, 2017 to provide guidance to employers, insurance carriers and employees regarding their rights and responsibilities pursuant to PFL. According to the regulations, employers may require PFL to run concurrent with FMLA, parental and/or other leave policies. For FMLA and PFL leave to run concurrently, employers must designate the leave FMLA and provide the employee with all applicable FMLA paperwork or the leave will not qualify as FMLA leave.
In addition, employers may permit employees to use vacation or sick leave to make themselves whole during the leave period but may not require employees to use this time. An employer can request reimbursement from the insurance carrier for benefits due the employee under PFL if the employee uses sick or vacation days during the leave period.
FMLA leave taken by the employee for their own serious medical condition cannot be designated PFL. Thus, an employee could qualify to take twelve (12) weeks of leave under FMLA for their own serious medical condition and still have leave available to them under the PFL, such as caring for a sick family member.
In addition, if the employer designates a leave as FMLA and PFL and informs the employee of their eligibility for family leave benefits, and if the employee declines to apply for those benefits (i.e., fails to fill out the claim form provided by the employer), the employer may count the leave against the employee’s maximum duration of family leave in a 52 week period.
An employee who is eligible for both disability benefits and family leave pursuant to PFL may only receive 26 total weeks within the same 52 week period, and may not receive both disability benefits and family leave benefits for the same period of time.
In addition to New York, California, Rhode Island and New Jersey also provide paid family leave.
What Employers Need To Do To Prepare for PFL:
3 Contact their disability insurance carriers about obtaining Paid Family Leave coverage;