By Kathleen Sellers, JD, CLU®
Vice President, Charles J. Sellers & Co., Inc.

 

The New York Paid Family Leave Act goes into effect on January 1, 2018.  Once fully implemented, this law will provide the most generous paid family leave benefits mandated by any state in the U.S.  This law is applicable to virtually all private employers with at least one employee, including physician practices.

Paid Family Leave (PFL) benefits will be insured like other state-mandated benefits for employees, such as Workers Compensation and Disability Benefits Law benefits.  PFL coverage will be added to an employer’s existing Disability Benefits Law policy.  The insurance carrier will process claims and make benefit payments.

 

Qualifying Reasons for Leave

Eligible employees will be able to take PFL for three reasons:

  1. To bond with a newborn within the first year of birth, or to bond with an adopted child or foster child within one year of placement.Either parent (not just the birth mother) may take PFL bonding leave.There is no PFL available for prenatal complications.Employees may take PFL starting January 1, 2018, to bond with children born in 2017, as long as the leave is taken within one year of birth.

  2. To provide care for a close family member with a serious health condition.A “close family member” includes a spouse, domestic partner, child (including adult children), parent, parent-in-law, grandparent, and grandchild.A serious health condition is a condition that requires inpatient care or continuing treatment or supervision by a health care provider.Note that PFL is not available for the employee’s own serious health condition.

  3. To deal with a qualifying exigency related to a family member’s call to active duty in the military forces.

 

PFL Benefits

The benefits granted by the PFL Act will be phased in between January 1, 2018 and January 1, 2021, as follows:

Date

Maximum Duration of PFL

Amount of Benefit
(AWW = Average Weekly Wage)

Jan. 1, 2018

8 weeks

50% of the Employee’s AWW, capped at 50% of the NY AWW

Jan. 1, 2019

10 weeks

55% of the Employee’s AWW, capped at 55% of the NY AWW

Jan. 1, 2020

10 weeks

60% of the Employee’s AWW, capped at 60% of the NY AWW

Jan. 1, 2021

12 weeks

67% of the Employee’s AWW, capped at 67% of the NY AWW

 

The NY Average Weekly Wage is calculated by the NY Department of Labor each year, and is currently $1,305.92.  An employee cannot take more than 26 weeks of DBL and PFL benefits combined in a 52 week period.  An employer can allow employees to use paid time off while out on PFL so that employee can receive his/her full salary, but cannot require this.

 

Eligible Employees

Both full and part-time employees are eligible for PFL benefits.  A full-time employee (defined as one working 20 or more hours per week) is eligible after 26 weeks of employment with the employer.  A part-time employee (one working less than 20 hours per week) is eligible after 175 days of employment with the employer.

Under two limited circumstances, an eligible employee may waive PFL benefits and avoid the payroll withholding (described below):  (1) a full-time employee who will not work 26 weeks in a 52 week period (such as a seasonal worker); and (2) a part-time employee who will not work 175 days in a 52 week period.  Employees who opt to waive benefits must complete a waiver form, which the employer must retain.

 

Cost

The PFL Act has been promoted as a 100% employee-paid benefit.  Premiums will be financed by employee payroll deduction (although an employer may choose to pay the premiums itself).  The payroll deduction is 0.126% of the employee’s wages, not to exceed the statewide Average Weekly Wage.  The premium rate is the same as the payroll deduction, so the total withholdings from employee pay for a year should be the same as the annual premium for the insurance coverage.  Payroll deductions were permitted to begin on July 1, 2017.  While the premium payments will be covered by the employee withholdings, there will, of course, be other costs to the employer, such as those caused by staffing issues and administrative requirements.

 

Employee Notice

An employee who wishes to take PFL for a foreseeable reason must give the employer at least 30 days’ notice of his or her intent to take PFL.  If the reason for taking leave is not foreseeable (for example, a close family member experiences a medical emergency), the request for PFL must be made as soon as practical.  The employee may take PFL in daily or weekly increments.  An employee taking PFL will need to complete claim forms, including a request for PFL, and will need to provide other information substantiating the reason for which leave is requested, such as a birth certificate for bonding leave, or a medical certification for leave to care for a sick family member.  These claim forms have not yet been released by NYS.

 

Employer Obligations

The PFL Act places several other obligations on the employer:

  • The employer must provide information to its employees about their rights and obligations under the PFL Act.If the employer has an employee handbook, the handbook must be updated to include PFL information.If the employer does not have a handbook, it must otherwise provide written information about the PFL.

  • The PFL Act includes job security for employees who take PFL – they must be returned to the same or comparable job upon return from PFL.

  • If the employee has health insurance through the employer, the health insurance must be continued during the PFL, although the employee must continue to pay his or her share of health insurance premiums.

  • If the employer does not provide PFL coverage for eligible employees, it may be subject to penalties for noncompliance.

  • The employer will be provided with a notice about rights under the PFL that it must post in the workplace, just like required postings about Workers Compensation and other employee rights and benefits.

 

It is important for all New York employers, including physician practices, to prepare now for the implementation of this new employee benefit.  If you have any questions about PFL, please let us know.  We can be reached at 716-627-5400, or via e-mail at [email protected]