Professional Service Agreement

New York Paid Family Leave Law

June 26, 2017

New York’s Paid Family Leave Benefits Law (the “NYPFL Law”), the most comprehensive paid family leave program in the nation, goes into effect January 1, 2018. Starting on that date, employees will be eligible for up to eight (8) weeks of compensation, benefits, and job-protected leave in any 52-week period, and the duration and benefit amounts of the paid family leave (“PFL”) are set to increase annually, effective January 1 of each year through 2021.

The NYPFL Law is an extension of the state’s Disability Benefits Law (“DBL”) (commonly referred to as short-term disability), and thus operates in a similar manner as other legally-required insurances. (Short-term disability policies will be required to include paid family leave coverage in the policy.) Critically, PFL compensation will be funded exclusively through employee contributions deducted from payroll, beginning in July 2017.

Which employers are covered?

Coverage is extremely broad. New York employers that have employed as few as one individual for 30 consecutive days are covered by the NYPFL Law.

Which employees are eligible for PFL?

PFL will be available to New York employees who work for a covered employer for 20 hours or more per week for 26 or more consecutive weeks of employment, and to those who have worked on a part-time basis (fewer than 20 hours per week) for 175 days in a 42 consecutive week period.

An eligible employee may be provided the option to file a waiver of family leave benefits (which would exempt him or her from NYPFL Law payroll contributions) if: (1) his or her regular employment schedule is 20 hours or more per work, but he or she will not work 26 weeks (e.g., camp counselors), or (2) his or her regular employment schedule is less than 20 hours per week and he or she will not work 175 days in a 52 consecutive week period.

What can PFL be used for?

PFL can be used for any of three reasons:

Employees can take PFL to care for a close relative with a serious health condition. “Close relatives” are limited to spouses, domestic partners, children, parents, parents in-law, grandparents, and grandchildren. A “serious health condition” is an illness, injury, impairment, or physical or mental condition that involves either (a) inpatient care or (b) continuing treatment or continuing supervision by a health care provider.

Employees can use PFL to bond with the employee’s newborn, newly adopted, or newly placed child within the first 12 months after child birth, adoption, or placement of an adopted or foster child. However, employees may not take PFL for their own prenatal condition(s).

Employees may also take PFL for purposes identified under the federal Family and Medical Leave Act (“FMLA”) when their spouse, child, domestic partner or parent is on active duty or has been notified of an impending call or order to active duty. But, PFL may not be used for an employee’s own serious health condition or qualifying military event.

How are payroll deductions calculated?

On June 1, the New York State Department of Financial Services established that the maximum employee contribution shall be 0.126 percent of an employee’s weekly wage, up to and not to exceed the statewide average weekly wage, as established by the New York State Department of Labor.

Are employees required to provide notice before taking PFL?

Similar to the FMLA, when the need for PFL is foreseeable, employees must provide their employers with no less than 30 days’ notice in advance of the date on which the leave is to begin. If the need for leave is not foreseeable, the employee must provide notice as soon as practicable.

The State will create and publish a “Request for Paid Family Leave and Certification” form, but insurance carriers and self-insured employers may opt to accept notice of claims in another format if they prefer not to use the State’s form. A claim for PFL will be deemed completed when an eligible employee submits a Request for Paid Family Leave and Certification form to his or her self-insured employer or, in the event that the employer is not self-insured, its insurance carrier. An employee requesting intermittent leave must submit a schedule forthe leaveto the self-insured employer or carrier; benefits under the NYPFL Law may be withheld pending an employee’s formal submission of his or her request and certification together with date(s) of leave.

Can PFL benefits be coordinated with other leave laws?

Employees may not use PFL while they are collecting workers’ compensation benefits and are not working.

To the extent that an employee is eligible for leave under both the NYPFL Law and the FMLA, such leave must be taken concurrently. Employers should note that between 2018-20, employees may be eligible for more FMLA leave (up to 12 weeks a year) than PFL. For example, in 2018, an employee may use up to 8 weeks of PFL for maternity leave, but to the extent that she qualifies for FMLA, she may take up to 4 additional weeks of unpaid leave, either for her own serious health condition or for child bonding. (That same hypothetical employee may also use FMLA for her own serious health condition prior to childbirth.)

Although the NYPFL Law does not provide benefits to employees who wish to take leave for their own serious health condition, employees may still avail themselves of New York’s statutory short-term disability leave program (and they may be eligible for unpaid leave under the FMLA).

Can PFL benefits be coordinated with an employers’ existing policies?

Employees may elect to supplement PFL benefits, up to their full salary or wages, by using any form of accrued or allotted paid time off, consistent with their employer’s policies, while they are on leave under the NYPFL Law. In the event that an employee elects to take advantage of a paid time off program from his or her employer (e.g., sick leave, PTO, personal leave) at 100 percent of salary in lieu of the monetary compensation to which the employee is entitled under the NYPFL Law, the employer may request reimbursement from its carrier of any benefits due the employee. For example, if an employee earning $100 a day chooses to use his employer’s vacation policy to collect vacation pay (at $100 a day) for each day he takes PFL, the employer would be entitled to the benefits due the employee for each day of the covered absence ($50 in 2018). The employer may seek reimbursement by filing a claim with its insurance carrier prior to the carrier’s payment of such benefits. The actual reimbursement amount may be computed after family leave is complete.

Employers that, as a matter of personnel policy or practice, pay employees their full salaries for portions of family leaves of absence are entitled to seek reimbursement from the insurance carrier providing PFL benefits, much as they would when seeking reimbursement for workers’ compensation benefits.

To the extent that an individual’s employment is subject to the terms of a collective bargaining agreement (“CBA”), his/her employer will be relieved of providing PFL benefits and protections if the CBA provides benefits and protections at least as favorable as those mandated under the NYPFL Law.

Does PFL leave require the employer to hold the employee’s job?

Similar to leave taken under the FMLA, PFL taken under the NYPFL Law is job-protected, meaning that upon returning from PFL, an employee is entitled to reinstatement to his/her prior position, or to a comparable position with comparable, pay, benefits, and other terms and conditions of employment. Also, employers must maintain an eligible employee’s existing health insurance benefits for the duration of PFL as if the employee had continued to work.

What should employers in NY do now?

Employers must ensure that their payroll departments or outside payroll vendors are ready to make appropriate deductions from employees’ paychecks starting in July 2017.

Employers must purchase a paid family leave insurance policy from their preferred New York Disability Benefits carrier, or arrange for self-insurance, that will take effect beginning January 1, 2018.

Employers should also review and revise personnel policies as necessary to account for PFL under the NYPFL Law, and its relationship with other policies and statutory requirements.

Finally, employers are required to post the notice by January 1, 2018. The State has already published explanatory material concerning the NYPFL Law, which can be found here. During the remainder of 2107, employers should consult the State website for a copy of the requisite State-disseminated notice advising employees of their rights under the NYPFL Law.

What must employers do once the NYPFL Law takes effect?

All New York employers should pay special attention to documenting and properly classifying all leaves of absence so as not to conflate entitlements under the NYPFL Law with those of the FMLA.

The NYPFL Law will significantly impact those employers that are not covered by the FMLA (e.g., because they have fewer than 50 employees, which is the jurisdictional threshold) and that currently do not offer some form of paid family leave. Starting in 2018, those employers will be required by the NYPFL Law to provide not only job-protected leave, but also paid job-protected leave.