United States: Final New York Paid Family Leave Regulations Released: What Employers Need To Know

The Workers' Compensation Board adopted the final regulations for New York's new Paid Family Leave Benefits Law (PFL) on July 19, 2017. Final Regulations were issued previously by the Department of Financial Services on May 16, 2017.

PFL will provide broad paid family leave benefits through the state's existing Disability Benefits Law. In addition to paid benefits, eligible employees have the right to a leave of absence and guaranteed reinstatement even if they are not protected by the Family and Medical Leave Act (FMLA).

PFL is a result of a bill signed by Governor Andrew Cuomo enacting New York State's 2016-2017 Budget. PFL will go into effect on January 1, 2018.

The following summarizes some of PFL's key provisions as clarified by the Final Regulations.

Detailed information on the final regulations and can be found on the New York Worker's Compensation Paid Family Leave webpage.

Employee Eligibility Criteria

PFL will cover employees whose regular employment schedule is at least 20 hours per week and have worked at least 26 consecutive weeks before the first full day of family leave begins. In addition, part-time employees whose regular employment schedule is less than 20 hours per week will be eligible for benefits under the law after such part-time employee has worked for 175 days for the employer. The Assessment of Public Comments to the final regulations make clear that the 175 days are not calendar days, but days worked. In addition, the Board's Final Regulations were revised to clarify that employers must provide employees the option to sign a waiver if their regular work schedule will never achieve the period required (26 weeks or 175 days in a 52 consecutive week) to become eligible for PFL.

Reasons to Take Paid Leave

PFL provides that eligible employees will be entitled to a paid leave of absence from work in three specific situations:

  1. When paid leave is necessary to provide care, including physical or psychological care, to their family members due to a family member's serious health condition;
  2. To bond with their newborn children during the first year of the child's life, or, in the case of adoption or foster care placement, for the first year after the placement of a child with the employee; and
  3. For any qualifying reason as provided for under the federal Family and Medical Leave Act arising from the employee's spouse, domestic partner, child, or parent being on active military duty, or, alternatively, being notified of an impending call or order to active military duty.

Benefits Received During Leave

Paid Benefits

Under PFL, eligible employees can apply for paid leave, the amount of which will be increased annually until January 1, 2021. (The State Superintendent of Financial Services will have discretion to delay the increases in the family leave benefit level if such increases will have a negative impact on the state's economy.) Once effective, for any 52-week calendar period, the length of maximum available leave benefits, and amount of weekly benefits, to the employee will be as follows:

  • January 1, 2018: 8 weeks paid at 50% of the employee's average weekly wage or 50% of the state average weekly wage, whichever is less;
  • January 1, 2019: 10 weeks paid at 55% of the employee's average weekly wage or 55% of the state average weekly wage, whichever is less;
  • January 1, 2020: 10 weeks paid at 60% of the employee's average weekly wage or 60% of the state average weekly wage, whichever is less; and
  • January 1, 2021: 12 weeks paid at 67% of the employee's average weekly wage or 67% of the state average weekly wage, whichever is less.

The New York State Average Weekly Wage (NYSAWW) is set every year after a comprehensive analysis by the New York State Department of Labor (NYSDOL). The NYSDOL's Research and Statistics Division computed the NYSAWW for calendar year 2016 to be $1,305.92. The determination is made based on the prior calendar year wages reported by the Commissioner of Labor to the Superintendent of Financial Services on March 31 of each year.

Employers and employees can agree to allow the employee to supplement PFL benefits up to their full salary or wages with accrued vacation, sick, personal, or other paid time off during the paid leave, enabling him or her to receive full salary. Should an employer offer and an employee choose to use paid vacation, sick, personal, or other paid time off for statutory leave, the employer may request reimbursement from the carrier providing PFL benefits in the same manner as if it were seeking reimbursement for workers' compensation benefits. Similarly, if an employer's current practice involves paying employees full salary while they are out on family leave, the employer will be entitled to seek reimbursement from the carrier in the same manner.

Continued Health Insurance

Similar to the FMLA, during any period of PFL, employers must maintain the employee's existing health benefits for the duration of PFL as if the employee had continued to work (for a plan funded by insurance, this will require an amendment to the state insurance law mandating compliant policy provisions and, arguably, would be unenforceable as preempted by ERISA for a self-insured plan).

Job Protection

The new law requires employers to reinstate employees returning from PFL to his or her prior position of employment (or to a comparable position with comparable pay, benefits, and other terms and conditions of employment). In addition, the taking of paid leave under the new law must not serve to reduce any of the employee's accrued benefits at the time of taking such leave.

Employer Notice Obligations

Employers must provide written guidance to all employees regarding their rights and obligations under the PFL, including how to file a claim for PFL. Such guidance must be contained in an employee handbook if an employer maintains one. In addition, all employers must display or post a notice concerning PFL in the form prescribed by the Workers' Compensation Board Chair.

Employee Notice Obligations

The Final Regulations clarify an employee's notice obligations. When the need for family leave is foreseeable, employees must provide the employer at least 30 days' advance notice of their intention to take family leave. The Regulations describe foreseeable qualifying events as expected birth of a child, placement of a child for adoption or foster care, planned medical treatment, or military exigency. The Regulations further provide that if giving 30 days' advance notice is not practicable because of a lack of knowledge of the approximate date leave will need to begin, a change in circumstances, or a medical emergency, employees must notify their employer as soon as it is practicable. Similar to the FMLA, the Final Regulations state that it should generally be practicable to advise an employer of the need within the time prescribed by the employer's usual and customary notice requirements.

Restrictions on Taking PFL

Employees may not collect benefits for short-term disability required by New York State law and PFL concurrently. Additionally, employees who also are eligible for disability benefits may receive only a combined amount of 26 weeks of disability benefits and PFL benefits in a 52-consecutive calendar week period.

Other situations in which PFL benefits may not be payable include when the employee is:

  • Receiving total disability payments pursuant to a claim for workers' compensation, volunteer firefighters' benefits, or volunteer ambulance workers' benefits;
  • Not employed or is on administrative leave from his or her employment;
  • Collecting sick pay or paid time off from the employer;
  • Works at least part of that day with pay for the employer or for any other employer; and/or
  • Using the same time for the same family member in question if spouses are employed by same employer.

In addition, unless otherwise expressly permitted by the employer, leave available under the FMLA can run concurrently with PFL, provided the employer gives the employee the required FMLA notices. For a subsequent, unrelated disability, an employee may seek benefits up to the maximum number of available weeks permitted. Importantly, the Assessment of Public Comments to the Final Regulations highlighted that employees who have a qualifying event in 2017, such as the birth of a baby, may be entitled to leave in 2017 and again in 2018 under the new PFL.

How Benefits are Funded

PFL should not impose significant costs on New York employers, employees, or insurance carriers. The maximum employee contribution will be a modest deduction from each employee's paycheck. The Department of Financial Services (DFS) has established this employee contribution for coverage beginning January 1, 2018, to be 0.126% of an employee's weekly wage, up to and not to exceed the statewide average weekly wage. This equates to a maximum employee contribution of approximately $1.65 per week for 2018. This amount is subject to change on September 1st of each year.

Indeed, PFL is intended to be fully funded by employees, without imposing any costs on employers. During the public comment period, however, multiple inquiries were made as to whether the employee contributions will be sufficient to fully fund the PFL benefits. While it may be too soon to tell, pursuant to guidance promulgated by the DFS regarding the determination of an appropriate employee contribution rate, claims data from New York statutory disability insurers and from the New Jersey paid family leave program were considered as the starting point for establishing the contribution rate for 2018. The DFS conducted an analysis weighing varying factors, including, but not limited to, anticipated shift in claims from short-term disability to PFL, projected average claim frequency, average claim duration factors, inclusion of coverage for children born in 2017, allocation of administration expenses, and calculation of aggregate claims costs.

The Final Regulations require all insurance carriers who provide short-term disability benefits to provide PFL benefits. While it is unclear whether insurance carriers will be permitted to charge an amount in excess of the employee contributions collected by the employer to which the carrier is providing coverage, it is apparent that the ultimate goal behind PFL is for the collected employee contributions to be sufficient to pay employers' insurance premiums, and for such premiums to be equal to or greater than the total cost of PFL benefits paid by carriers to employees who utilize PFL in 2018.

Self-Insurance Options

The Final Regulations also permit employers to self-insure for PFL. These employers are still required to provide PFL benefits in the same manner as those employers who obtain insurance coverage. There are a few additional requirements, of which self-insured employers must be aware.

Initially, employers who wish to self-insure must elect to do so no later than September 30, 2017. Only those employers who currently self-insure for statutory short-term disability benefits or public employers who elect to provide PFL benefits to public employees who are not represented by an employee organization are permitted to self-insure for PFL benefits. When making this election, a self-insured employer will be required to post additional security and enter into a binding agreement accepting all liability for benefits paid that exceed funds collected from employees, provided that the contributions were at the mandatory maximum allowed by law. The Final Regulations make clear that no employee may bear any additional cost above the maximum employee contribution rate. In other words, though inconsistent with the PFL's message that it will not impose a cost upon employers, there is the potential for a self-insured employer to incur costs when administering PFL benefits that will not be recouped from employee contributions.

In addition, the Final Regulations provide that the contributions collected by self-insured employers for disability benefits and PFL benefits must be combined into a single trust fund for the purpose of making benefit payments to eligible employees. The funds cannot be commingled with other funds of the self-insured employer.

Enforcement

Employees who feel their rights under this PFL law were violated (for example, they were denied health insurance coverage while on leave), or that they have been discriminated or retaliated against for taking PFL, may file a discrimination claim at the Workers' Compensation Board under Section 120 of the Workers' Compensation Law.

What Should Employers Do Now?

Initially, employers should determine how they will obtain PFL coverage — whether they will obtain coverage through an insurance carrier or self-insure. If an employer maintains an insurance policy for short-term disability benefits, their carrier must offer PFL coverage if it continues to offer short-term disability coverage, so employers should contact their carriers as soon as possible to confirm details regarding the amount of premiums and when to begin making payroll deductions to fund the benefit without creating a surplus that might need to be returned to employees.

In addition, if employers are self-insuring short-term disability benefits, they need to either elect to self-insure PFL or obtain coverage pursuant to subdivisions one and two of section 211 of the Workers' Compensation Law. This election must made by September 30, 2017. A private employer can self-insure PFL benefits only if it is already self-insuring short-term disability benefits. Moreover, self-insurers must decide whether they will self-administer or work with a third-party administrator (TPA) to administer the benefits. While TPAs presumably will develop forms and processes to comply with the Final Regulations, self-insuring employers who are self-administering these benefits must develop forms and procedures to implement the law's provisions.

Employers also should develop a labor relations strategy for approaching the unions to obtain their agreement to permit payroll deductions, if applicable. In all likelihood, employers first will need to determine how much will be deducted and when deductions will begin. To answer those questions, employers likely will need to first determine whether they will obtain coverage through an insurance carrier or self-insure those benefits. This decision then needs to be communicated to the unions, along with how the benefit will be administered.

Employers also should review the PFL forms that will be required to be completed by employees to apply for and receive the benefits. The Board has published five forms. Employers need to determine how these forms will be integrated into their current leave-management practices. Again, this depends on whether employers will insure or self-insure this benefit and what resources will be used to administer a self-insured benefit.

Prepare for extended leave requests, especially in 2018. In preparation, consider the following:

  • Employees potentially can exhaust 12 weeks of FMLA leave during 2017 but still receive another 8 weeks of PFL for the same reason during 2018.
  • Many more employees are eligible for leave under PFL than are eligible for federal FMLA. There is no minimum hours worked requirement, and employees are covered after 26 weeks of consecutive employment or 175 days worked, and there is no small-worksite exception. Unlike unpaid FMLA, many more employees are likely to take PFL.
  • PFL can be taken to care for a broader number of family members than federal FMLA. Therefore, an employee might be able to take 12 weeks of leave for a spouse under FMLA and additional 8-12 weeks (depending on the phase-in period) under PFL.
  • Employees who ordinarily would file for short-term disability during periods of disability occasioned by childbirth now have the option of filing for PFL benefits; this will provide them a higher benefit and extend absences to 8, 10, and then 12 weeks, compared to a traditional 6-8 week disability period.
  • PFL calculates the 12-month period for benefits using a rolling 12-month period measured backward from any day that leave is taken. This is the same as the FMLA rolling method. However, employers using a calendar, anniversary, or other method to calculate the 12-month FMLA period might find that leaves taken for the same reason under both laws do not always run concurrently, because leave may not be available under one of the two laws at the time leave is taken. This disparity also will make tracking leave usage and entitlement more challenging. Absence management software will have to be updated to reflect these differing standards.

In sum, employers must now determine whether and/or to what extent the PFL benefits overlap with company leave policies and/or collective bargaining agreement benefits, if any. Further, employers must ensure that a written PFL policy is adopted before January 1, 2018, and that it informs employees that overlapping leaves under FMLA or company policy will be run concurrently whenever possible. Finally, employers should begin to train HR, benefits employees, or others responsible for administering the PFL benefit on employee rights and obligations under PFL.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.