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New York Paid Family Leave Update

13
Jun 2017
Posted in Client Updates

In 2016, New York State passed a Paid Family Leave (PFL) law that provides partial income replacement and job protection while workers are on leave for covered reasons. Employees will be able to access paid leave benefits beginning in January of 2018. Employers are required to purchase a PFL insurance policy or self-insure. The income replacement will be fully funded by mandatory employee payroll deductions that should begin on July 1, 2017.

The New York State Department of Financial Services (DFS) has set the maximum contribution rate for the first year at .126% of an employee’s weekly wage, up to $1,305.92 (the current statewide average weekly wage). Employers should not take a deduction from any portion of an employee’s income that exceeds this amount. Employers may choose to pay some or all of this on behalf of employees as an added employment benefit, but are not obligated to do so—most employers will simply use a payroll deduction. The DFS will announce a new contribution rate by September of 2018.

The PFL Benefit is being phased in over time. In 2018, employees will be eligible for up to 8 weeks of paid leave at up to 50% of their average weekly wage or 50% the statewide average weekly wage (SAWW), whichever is smaller. In 2019 and 2020, employees will be eligible to use up to 10 weeks of leave, and receive up to 55% and 60% of their average weekly wage or 55% and 60% of the SAWW, respectively. In 2021, employees will be able to use up to 12 weeks of leave and receive up to 67% of their average weekly wage or 67% the SAWW.

Examples:
Rosalee is an employee in New York who makes $1,500 per week. Her employer should deduct .126% from the first $1,305.92 of her paycheck, which equals $1.65 per week. If Rosalee is eligible for PFL benefits in 2018, she will receive $652.96 per week—which is 50% of the SAWW—since that is smaller than 50% of her own average wage and proportionate to what she paid into the plan.

Monroe is an employee in New York who makes $1,000 per week. His employer should deduct .126% from his entire paycheck (since it is smaller than the SAWW), which equals $1.26 per week. If Monroe is eligible for PFL benefits in 2018, he will receive $500 per week—which is 50% of his own average wage—since that is less than 50% of the SAWW and proportionate to what he paid into the plan.

Some key elements of New York’s Paid Family Leave Benefit:

Eligibility
  • All employees who work full-time (20+ hours per week) for 26 weeks, or part-time for 175 days, are eligible to use PFL.
  • All employers with one or more employees are subject to the law.
  • Employees do not have to use accrued sick leave, vacation, or other paid time before using PFL.
Use
  • Employees may take PFL during the first 12 months following the birth, adoption, or fostering of a child.
  • Employees may take PFL to care for a close relative with a serious health condition.
  • Employees may take PFL if they are eligible for time off under the military provisions of the Family Medical Leave Act (FMLA) when a spouse, child, domestic partner, or parent of the employee is on active duty or has been notified of an impending call or order of active duty.
  • Employees may not use PFL for their own serious condition or qualifying military event.
Job Protection
  • Employers must hold an employee’s job for them while they are away on PFL, or reinstate them to a comparable position with the same or better pay, benefits, and terms and conditions of employment.
  • Employers must continue to provide the employee’s existing health benefits while on PFL.
  • Employees must continue to pay the usual portion of their health benefits premium while on PFL.
  • Employers may not discriminate or retaliate against employees in any way for using or asking to use their PFL, including discipline, reduced hours, or reduced pay or benefits.
Notice to Employees

Employers must provide written notice about PFL to employees. The state is producing a compliant notice, but has not yet released it.

More information is available on the HR Support Center and will be updated when the Final Rules for implementation and administration are released. In addition, the state is encouraging employers with questions to call the Paid Family Leave Helpline at 844-337-6303 between 8:30 a.m. and 4:30 p.m. ET, Monday through Friday.

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