Dec 1, 2017
Paid family leave is effective Jan. 1, 2018 - Are you ready?
Starting New Year’s Day, New York employers will need to be ready to implement the new paid family leave regulation. The regulation, which was finalized this summer, entitles employees of covered employers to a protected, paid leave to bond with a child after birth, placement or adoption; to take care of a qualified family member during a serious illness; and for a qualified military exigency. If you are an employer, you need to prepare your agency for when this regulation goes into effect.
Beginning Jan. 1, 2018, any private employer with one or more employees will be required to provide PFL benefits for an eligible employee. However, public employers may opt in to provide PFL benefits. Employees of a covered employer, regardless of their full- or part-time status, become eligible after they have worked the requisite number of days or weeks. For example, an employee who works 20 or more hours a week becomes eligible for benefits after 26 consecutive weeks of employment. Any employee who regularly works less than 20 hours a week becomes eligible for benefits after the 175th day of employment. Employers should be aware of any employee who may be able to utilize leave in January, so they can plan their staffing and notice periods accordingly.
Employers also should contact their disability carrier and their payroll provider to determine how contributions will be calculated and how the employer should proceed in collecting them. PFL is designed to be funded completely by the employees. However, employers may choose to pay the premium themselves rather than collecting the employees’ contributions. A covered employer purchases PFL coverage through its disability carrier, and collects employee contributions up to the maximum allowed by law from the employees to pay the PFL portion of the disability /PFL premium.
For 2018, the weekly employee contribution is 0.126 percent of employee’s weekly wage capped at New York state average weekly wage, which was $1,305.92 in 2016. This means the maximum contribution that can be deducted from an employee in 2018 is $1.65 per week. Remember: The employees’ contributions are based on their own personal salary, and not the whole payroll. Therefore, no two employees will have the same employee contribution unless they have the same salary.
On the effective date, employees are entitled to eight weeks of paid leave, which will increase to 10 weeks in 2019, and finally to 12 weeks in 2021. Benefits are paid by the disability insurance carrier of the employer at the rate of 50 percent of the average weekly wage in 2018; 55 percent in 2019 and 2020; and caps out at 67 percent in 2021. This is capped at 50 percent of the New York state average weekly wage and paid by the DBL carrier.
While PFL allows an employee to take leave for the reasons listed above, noticeably absent from the qualifying reasons is the employee’s own serious health condition. However, if an employee takes an employee designated leave of absence under the Family Medical Leave Act for his or her own serious health condition, it does not reduce the amount of paid family leave for which the employee is eligible. (The employer must designate the leave as FMLA, otherwise, this does not apply.) As a reminder, PFL is effective on a "look-back" calculation. This means that an employee who had a child born, placed or adopted sometime in 2017 may take leave on Jan. 1, 2018, up until the 12-month period after the date of birth, placement or adoption.
Employers also should update their employee handbooks and notices to ensure employees know how to apply for PFL. One key factor in how PFL is administered is that the employee applies for PFL benefits directly to the employer’s disability carrier. The employer must provide the employees with the information necessary to file a claim, including links to the claim forms. The employer must complete one section of the application before the employee submits the claim to the carrier. The disability carrier makes the final determination of whether PFL is granted, and cannot deny a claim solely because the employer failed to complete his or her section of the claim form.
There also are notice requirements an employee must follow, and should be memorialize in any PFL update to an employee handbook. Employees must provide an employer with at least 30 days of notice before leave is to begin for a foreseeable event. If the qualifying event is unforeseeable or if there is a change in circumstances or a medical emergency, the employee notice must be given as soon as it is practicable. If the employee fails to give 30 days of notice for a foreseeable event, it could result in a partial denial for a period of up to 30 days from when the notice was provided.
This is just scratching the surface on the PFL regulation and how it could potentially affect your business and your clients’ business. For more information, visit PIANY’s HR Info Central.