NEW YORK’S PAID FAMILY LEAVE TO TAKE EFFECT JANUARY, 2018
On January 1, 2018, New York State will take the first step in rolling out its Paid Family Leave (PFL) plan for men and women working for any private company or organization with at least one employee. The plan allows eligible employees to receive paid leave for a qualifying life event such as the birth, adoption, or foster care of a child, or caring for a family member during active military leave or a qualifying medical issue.
The goal of New York’s Paid Family Leave is to essentially provide all New York State employees with income and job security benefits when an eligible life event occurs. By far, New York State’s Paid Family Leave will be one of the most comprehensive family leave programs in the United States. Here is an overview of what to expect.
Benefits for Employees
Essentially, any individual employed with a private company, full-time, for 26 weeks or part time for 175 weeks is eligible for PFL benefits. In January 1, 2018, eligible employees can take family leave for up to 8 weeks while receiving up to 50% of their weekly salary, not to exceed the New York State Average Weekly Wage (NYSAWW) cap. Participation in the PFL program is mandatory for all private employees in the State of New York. Public employees may only participate in PFL if their employer opts into the program. Public employees who are members of a union organization may participate in PFL only if the program is collectively bargained.
In regard to maternity leave, if an employee is expecting, fostering, or adopting a child, the employee may take PFL at any time during the first 12 months following the birth, adoption, or fostering of a child. It is important to note that PFL benefits are only available to employees after the birth of a child and unavailable for prenatal care/conditions.
PFL also applies to employees who need to take family leave to care for a close relative with a serious health condition such as an injury, illness, or impairment that involves continuing treatment or supervision by a health care provider. According to the PFL program, a close relative includes a spouse, domestic partner, child, parent, parent in-law, grandparent, and grandchild.
New York’s PFL program also provides benefits for employees who have a spouse or close family member on active duty in the military and need to take time off from work to care for a spouse, domestic partner, child, or parent.
Employees in New York State will be required to make contributions from their paycheck to the PFL program.
PFL Rollout Timeline
The PFL program will be fully implemented by January 1, 2021, with employees initially being eligible for benefits on January 1, 2018. Each year over the ensuing three years, eligible employees will be allowed to receive an increased percentage of their salary in PFL benefits, which cannot exceed the maximum benefit amount allowed under NYSAWW cap. In 2018, employees will be able to receive 50% of their AWW in PFL benefits, not to exceed 50% of the NYSAWW. Since the NYSAWW cap is currently set at $1,296.00, the maximum PFL benefit allowed to eligible employees in 2018 is $648.00 per week. It is important to note that the NYSAWW cap will be updated on July 1st of each year.
The following is a breakdown of the PFL benefit rollout through 2021:
- July 1, 2017: Employers are permitted, but not required, to collect the weekly employee contribution for PFL.
- January 1, 2018: Maximum of 8 weeks of benefits at 50% of the employee’s AWW, not to exceed 50% of the NYSAWW cap.
- January 1, 2019: Maximum of 10 weeks of benefits at 55% of the employee’s AWW, not to exceed 55% of the NYSAWW cap.
- January 1, 2020: Maximum of 10 weeks of benefits at 60% of the employee’s AWW, not to exceed 60% of the NYSAWW cap.
- January 1, 2021: Maximum of 12 weeks of benefits at 67% of the employee’s AWW, not to exceed 67% of the NYSAWW cap.
How This Will Affect Employers
All New York employers subject to Article 9 of the Workers’ Compensation Law are subject to the PFL program, even if the employer is not subject to the Federal Family Medical Leave Act (FMLA). That is, employers who employ less than 50 employees within a 75-mile radius are still required to provide its employees with PFL benefits.
New York’s PFL program will be covered under an employer’s existing short term disability policy (DBL). As PFL is mandatory for all private employees, employees will be required to make a separate contribution to PFL apart from DBL contributions. Also, employees cannot receive PFL and DBL benefits at the same time. The maximum benefit that employees can receive from PFL and DBL combined in 52 consecutive weeks is capped at 26 weeks of benefits.
The premium for PFL coverage will be paid for by payroll contributions from the employee. However, the employer can make contributions to the PFL premium on behalf of its employees. Moreover, employees have the option to use accrued vacation time concurrently with PFL, or charge all or part of their vacation time to PFL. In this way, an employee can potentially receive their full salary for a portion of their PFL. Significantly, employers must continue to provide employee health care policy coverage for employees out on PFL. If an employee has their own health care policy outside of the employer’s policy, then the employee is responsible to maintain their own health care coverage while out on PFL.
Currently, the gray area for employers is the claims process, billing, and filing procedures for this new PFL program. New York State regulators are continuing to hammer out the details for PFL claims handling, procedures, and policies for employers and updates will continue to trickle in until January 1, 2018. New York regulators have assured employers that the PFL claims handling will be similar to that of DBL claims. Unfortunately, only time will tell whether significant changes are needed for proper PFL claims handling.
For more information on New York State’s new PFL program, visit the New York State website at https://www.ny.gov/programs/new-york-state-paid-family-leave.