On Wednesday July 19, New York adopted final Paid Family Leave law (NY PFL) regulations, which take effect immediately. As a reminder, beginning January 1, 2018, private employers must provide eight weeks of benefits at a 50% salary rate, with increased benefits over the next four years, for the leave reasons described below. The period of time an employee is receiving NY PFL benefits is also job protected. For more background on this law, please review ReedGroup’s prior blog posts, found here, here, and here, and New York’s Paid Family Leave website.
Employers are allowed to take employee contributions starting this month, as of July 1, if they choose. As of September 30, an employer who currently is self-insuring New York disability benefits (NY DBL) must elect to self-insure NY PFL benefits or purchase an insurance policy for NY PFL benefits. When electing to self-insure PFL benefits, the employer must post additional security and accept all liability for paid benefits that exceed employee funds collected by the employer. Employers must keep employee contributions in a separate fund and not combine them with any other funds. If an employer insures NY DBL benefits through a third-party insurer, it cannot self-insure just the NY PFL benefits; it must also provide PFL benefits through the third-party insurance policy.
Employers immediately should determine two things:
1. Whether to provide NY PFL benefits to eligible employees through an insurance policy, the state insurance fund, or a self-insured plan; and
2. Whether and when to begin collecting employee contributions via payroll deductions.
After making those decisions, employers should spend the remainder of 2017 familiarizing themselves with the New York PFL law. An employer can provide more generous benefits than New York requires, as long as their paid family leave program offers at least what NY PFL offers. Examples of a more generous plan include offering a higher benefit amount or providing benefits to employees who normally would not be eligible for NY PFL. Be ready to post the required notice and incorporate information in your handbook, policies, or guidance. Prepare for some extended leaves. As described below, if someone took a leave in 2017 for a reason that is also covered under NY PFL, that person may also be able to take NY PFL leave when the law is effective in 2018.
ReedGroup is incorporating the NY PFL program into its leave and disability administration and will periodically provide updates to you via emails like this, our blog, and quarterly webinars. We will have required forms and information in all of our notifications, when applicable. In the meantime, don’t hesitate to contact us at any time with your questions.
The information attached is a summary of some of the major components of the NY PFL program. The state’s website and helpline can also assist in answering questions.
- Employees who work 20 hours or more become eligible for NY PFL after 26 weeks; or
- Employees who work fewer than 20 hours become eligible after 175 workdays (not calendar days).
Other time off: Vacation time, personal time, sick time, and other approved time away from work when the employee is still considered to be an employee ARE counted toward consecutive work weeks. Periods of temporary disability are NOT counted toward consecutive workweeks.
Waiver: An employer must allow those employees who will not become eligible for PFL within a reasonable amount of time to avoid paying for a benefit they will not receive. While the employer must offer this waiver, only the employee can choose to waive NY PFL coverage. If the employee becomes eligible, the waiver is revoked and NY PFL employee contributions can begin, including retroactive contributions from the date of hire.
- To participate in providing physical or psychological care for a family member of the employee because of the family member’s serious health condition
- To bond with the employee’s child during the first 12 months after birth
- To bond with the employee’s child during the first 12 months after adoption placement
- To bond with the employee’s child during the first 12 months after foster care placement
- A qualifying exigency arising out of the fact that the employee’s spouse, domestic partner, child, or parent is on covered active duty or has been notified of an impending call or order to covered active duty in the armed forces (*Qualifying exigency here is defined the same as in the Family and Medical Leave Act [FMLA].)
Covered relationships for providing care:
- Child (biological, adopted, foster, step, legal ward, child of domestic partner, person to whom the employee stands in loco parentis)
- Domestic partner
- Parent (biological, adoptive, foster, step, parent-in-law, legal guardian, child of domestic partner, person who stood in loco parentis when employee was a child)
- Grandparent (parent of employee’s parent)
- Grandchild (child of employee’s child)
Amount of leave and benefits: Over the course of 4 years, NY PFL benefits will include the following and are not subject to a waiting period:
- Beginning 1/1/18: 8 weeks of benefits and job-protected leave at 50% of the employee’s average weekly wage or 50% of the state average weekly wage, whichever is less;
- Beginning 1/1/19: 10 weeks of benefits and job-protected leave at 55% of the employee’s average weekly wage or 55% of the state average weekly wage, whichever is less;
- Beginning 1/1/20: 10 weeks of benefits and job-protected leave at 60% of the employee’s average weekly wage or 60% of the state average weekly wage, whichever is less; and
- Beginning 1/1/21 and January 1 of each succeeding year: 12 weeks of benefits and job-protected leave at 67% of the employee’s average weekly wage or 67% of the state average weekly wage, whichever is less.
“Average Weekly Wage (AWW)” is determined by dividing either A or B below by the number of weeks or portion of such employment:
A. the employee’s total wages from his last covered employer for the eight weeks or portion thereof that the employee was in such employment immediately preceding and including his last day worked prior to the first day of paid family leave; or
B. the total wages of the last eight weeks or portion thereof immediately preceding and excluding the week in which the paid family leave began, whichever is the higher amount.
If an employee is using NY PFL daily, rather than weekly, the average daily rate is calculated as follows:
- When an employee requests family leave for one day or in daily increments (e.g., every Monday for six weeks), rather than as a weekly benefit, the daily benefit is calculated based on the employee’s AWW divided by the average number of days the employee worked per week.
- To determine the average number of days the employee worked per week for calculating the employee’s wage for one day, the employer must average the number of days the employee worked per week over the same 8 weeks used in calculating the employee’s AWW, noted above. The average number of days worked may be a fraction in order to convert accurately the AWW to a daily wage.
• Bonding leave expires at the end of the 52-week period that begins on:
– the date of birth; or
– the date of placement or first day of leave taken for adoption or foster placement (such as for a pre-placement hearing).
Even if bonding began prior to 1/1/18, an employee may still receive NY PFL bonding leave benefits during the 12 months from the birth or placement date.
Note: The employee is limited to a maximum of 26 weeks of family leave PLUS disability leave in a 52-week period and no more than 12 weeks of family leave in a 52-week period. An employee may opt out of New York disability leave during the post-partum period and receive NY PFL benefits instead, but an employee cannot receive both benefits at the same time.
• Calculation method: rolling back
• Part–time employees
- Daily leave – receive a percentage of the total benefit (an employee who works three days per week is entitled to 60% of the leave available to a full-time employee)
- Weekly leave – same amount of weekly leave
- The calculation of maximum NY PFL benefits depends on whether the leave is taken in weekly or daily increments.
- Continuous leave: An employee taking family leave in weekly increments will be eligible for the maximum number of weeks of leave in any 52-consecutive-week period;
- Daily leave: When an employee takes family leave in daily increments, the employee’s maximum period of paid family leave is calculated based on the average number of days worked per week with a maximum of 60 days per year for an employee working at least 5 days per week. For example, an employee who works three days per week will receive:
- on January 1, 2018, the equivalent of three days per week for eight weeks, or a maximum of 24 days in any 52-consecutive-week period
- on January 1, 2019, the equivalent of three days per week for ten weeks, or a maximum of 30 days in any 52-consecutive-week period; or
- on January 1, 2021, the equivalent of three days per week for 12 weeks, or a maximum of 36 days in any 52-consecutive-week period.
- Leave may be taken intermittently in one-day increments; partial-day increments are not allowed
- FMLA hours may be tracked intermittently in less than full-day increments, as allowable under the FMLA. When the total hours taken for FMLA in less than full-day increments reaches the number of hours in an employee’s usual work day, the employer may deduct one day of paid family leave benefits from an employee’s annual available family leave benefit. An employer is not entitled to reimbursement from its NY PFL carrier for such paid FMLA hours.
Concurrency With FMLA: If an employer designates a period of leave to be covered by the FMLA for a reason for which the employee is also eligible to receive NY PFL benefits, and the employee declines to apply for NY PFL benefits, the employer may count the period against the employee’s maximum NY PFL leave in a 52-week period.
Waiting period: None
- Timing of notice: Employee must give 30 days’ notice for foreseeable leave (for birth or placement of a child, planned medical treatment, known military exigency) or as soon as practicable if not foreseeable. An employee must provide notice as soon as practicable before each day of intermittent leave. An employer can require an employee to comply with its usual and customary notice and procedural requirements for requesting leave. If an employee does not do so and does not report unusual circumstances to justify such a failure to comply, NY PFL may be delayed or denied.
- Format of notice: An employee should give notice in the format designated by the carrier or self-insured employer, which may include using an electronic portal or telephone, or using the form PFL-1 or as otherwise designated by New York.
- Statement of rights: When an employee is absent due to family leave, the employer must provide a written statement of rights within five business days after the employee’s seventh consecutive day of absence or within five business days after the employer has received notice that the absence is due to family leave.
- FMLA designation: If the leave is also designated as FMLA, the employer must notify the employee of that designation. If an employer fails to provide FMLA notice, the employer is deemed to have permitted the eligible employee to receive family leave benefits without concurrently using the benefits available under FMLA.
- Employer information: When an employee requests NY PFL leave, the employer or insurance carrier must respond to the employee within three days with the employer information contained in Part B of the PFL-1 form.
- Incomplete requests: If the employee’s request for NY PFL is incomplete, the employer or insurance carrier has five days to inform the employee what information is missing and an explanation of how to complete the PFL request properly, including information regarding arbitration if the employee has a dispute.
- Posting requirements: An employer must post information about NY PFL law as required by the state of New York. If an employer maintains written guidance, such as a handbook, policies, or other written documentation, the employer must update those materials with information about PFL rights and responsibilities. If no written handbook, policies, or guidance exists, an employer must create written guidance concerning PFL rights and responsibilities, including how to file a claim, and provide it to all employees.
Certification: Prior to receiving paid family leave benefits, an employee must provide a notice to the employer and a medical certification in a form to be generated by the Chairman of the Workers’ Compensation Board. Employees may not receive family leave benefits during any period for which such certification has not been filed.
A determination on a NY PFL claim, including payment, if any, of NY PFL benefits, must be made within 18 days of a complete certification, or within 18 days of a request for a previously certified intermittent leave. If the request for NY PFL benefits is for a previously unspecified day of family leave, payment must be made within 30 days of the leave.
Use of PTO: An employer cannot require employees to use PTO during NY PFL. However, an employer can allow an employee to apply PTO to all or a portion of the leave so the employee can receive 100% of pay during leave. If an employer allows, and an employee chooses, to use PTO during NY PFL, the employer can request reimbursement out of any NY PFL benefits due (or to become due) by filing its claim for reimbursement with the NY PFL insurance carrier prior to the carrier’s payment of such family leave benefits. The actual reimbursement amount may be computed after family leave is complete.
Disputes: NY PFL is enforced through an arbitration process with the New York Workers’ Compensation Board (NY WCB). More information on this process is included in the regulations and will be forthcoming from the board.
Reporting: Employers have quarterly and annual reporting requirements to the state of New York regarding the employer’s NY PFL program. The NY WCB will provide more information regarding the format and transmission of the reporting data. ReedGroup will be ready to assist employers with this requirement.