United States: Is Your Business Ready For The New York State Paid Family Leave Law?

On July 19, 2017, the New York Workers' Compensation Board (Board) adopted final regulations for implementation of the New York Paid Family Leave Law (NYPFLL), one of the most comprehensive family leave programs in the nation. We wrote in detail about the NYPFLL in a previous Alert

Starting January 1, 2018, paid family leave (PFL) becomes a mandatory benefit throughout New York State, providing job-protected paid time off to employees to (1) bond with a new child, (2) care for a family member with a serious health condition, or (3) address family matters due to a qualifying military exigency. All private employers (including those located outside New York State) with one or more employees in New York State are required to comply with the NYPFLL.

Below are some key highlights about this new mandatory benefit, as clarified by the Board's final regulations, and in its assessment of revisions made to the final regulations in light of public comment received (Assessment). Note that the regulations and Assessment leave many unanswered questions, and the Board has indicated it will be providing further guidance and examples "as they arise" to the frequently asked questions section of the official Paid Family Leave Law website.

How Do Employers Provide PFL Benefits?

PFL benefits are administered through New York State's statutory disability (DBL) insurance program and generally are intended to be implemented as a rider to an employer's existing statutory DBL policy, unless an employer elects to self-insure or is exempt from the law's coverage. Employers that currently receive DBL coverage through the State Insurance Fund or a private carrier must obtain PFL coverage through the same carrier (and thus waive the option to self-insure for PFL). Carriers had until July 31, 2017, to decide whether to offer PFL insurance riders or withdraw from offering DBL coverage as well as the PFL rider. As a result of some carriers withdrawing from the market, some employers may be forced to find new carriers for coverage within a short period of time. 

Employers that currently self-insure DBL benefits may also self-insure PFL, provided that they file a timely application with the chair of the Board with a statement of financial condition and satisfy other requirements including, but not limited to, submitting and maintaining an adequate security deposit and the submission of an Agreement and Undertaking for Paying Benefits as a Self-Insurer. An employer may not apply to self-insure for PFL benefits only.

Employee Eligibility for PFL

Employee eligibility for PFL is redefined under the final rules as follows: Employees with a regular work schedule of 20 or more hours per week after 26 consecutive weeks of employment, and employees with a regular work schedule of fewer than 20 hours a week after working 175 days, are eligible for PFL. The 175-day requirement applies only to days actually worked (and thus excludes weekends and holidays). Scheduled vacations and approved personal, sick and other paid time off count toward the thresholds for eligibility. Time off for short-term disability, however, does not count toward weeks of employment or days worked.

The final regulations provide that "such consecutive weeks may be tolled during periods of absence that are due to the nature of that employment, such as semester breaks, and when employment is not terminated during those periods of absence." The Board noted in its Assessment that this new section was added "to clarify that certain jobs, like professors, have built in breaks and that these do not restart the period of employment for purposes of eligibility for paid family leave."

Employee PFL Contribution Waivers

The final regulations further clarify that employers must allow employees the option to waive their right to PFL benefits (and thus relieve them of any obligation to make contributions through payroll deductions) where an employee's regular work schedule will not meet the minimum coverage eligibility threshold. The decision as to whether to execute a PFL waiver remains in the sole discretion of the employee. Within eight weeks of a change in an employee's regular work schedule that would require PFL coverage, any waiver will be deemed revoked. The employee will then be obligated to begin making contributions, including any retroactive amounts waived back to date of hire, once notified by the employer of this obligation.

Qualifying Conditions for PFL

As noted above, PFL is available to eligible employees during the first 12 months following the birth, adoption or fostering of a child, which includes children born, fostered or adopted in 2017, as long as the leave is taken within the first 12 months of the birth, adoption or fostering. 

The final regulations clarify that an employee may take PFL before the actual placement or adoption of a child if an absence from work is required for the placement for adoption or foster care to proceed, for example, to attend counseling sessions, appear in court, consult with his or her attorney or doctors representing the birth parent, travel to another country to complete the adoption, etc.  

PFL also is available to care for an employee's family member with a serious health condition. Covered family members under the NYPFLL include an employee's spouse, parent or child (consistent with the federal Family and Medical Leave Act (FMLA)), as well as an employee's domestic partner, parents-in-law, grandparent, grandchild, or the son or daughter of the employee's domestic partner (not presently covered under the FMLA).

Finally, PFL is available to address family issues and transition matters when a spouse, child, domestic partner or parent of the employee is on active military duty abroad or has been notified of an impending call or order of active military duty abroad.

PFL does not apply to an employee's own serious health condition or disability due to childbirth, which remains covered by the disability portion of New York's Workers' Compensation Law (WCL). Notably, the WCL does not provide for a period of employment-protected leave for disability, although the Americans with Disabilities Act and New York State and City human rights statutes require reasonable accommodation for disabilities, which may include a period of leave, and the FMLA and its reinstatement obligations may also apply. 

Amount of Leave and Benefits

Amount of leave and wage replacement percentages available under the NYPFLL will be phased in over a four-year period. Beginning January 1, 2018, eligible employees will be entitled to eight weeks of PFL within a 52-week period, at a rate of 50 percent of the individual's average weekly wage (up to 50 percent of the state average weekly wage). When the NYPFLL is fully implemented in 2021, employees will be entitled to 12 weeks of PFL within a 52-week period, at a rate of 67 percent of the individual's average weekly wage (up to 67 percent of the state average weekly wage). Employees may also take leave on an intermittent basis.

Under the NYPFLL, "average weekly wage" means, for purposes of computing the rate of payment of PFL benefits, the amount determined by dividing the total wages of the employee for the eight weeks or portion thereof immediately preceding the first day of PFL. The week the employee goes on leave should not be counted unless it results in a higher average weekly wage. 

The final regulations also clarify that, for purposes of converting the employee's average weekly wage to an average daily wage, the average number of days worked per week by an employee can take into account fractions of a day.

Funding for PFL Benefits

Employers may deduct the premium cost for the PFL insurance policy from employees through a payroll deduction, or choose to cover the entire cost of the PFL policy themselves. 

The superintendent of finance sets the maximum permissible employee payroll deductions to finance PFL benefits. For 2018, employee contributions are set at 0.126 percent of the employee's weekly wages, capped at 0.126 percent of the state average weekly wage, which currently is $1,305.92, resulting in a maximum deduction of $1.65 per week per employee. Employers have been permitted, but not required, to make employee pay deductions since July 1, 2017. Note that employee contributions are deducted from an employee's after-tax wages and, despite this fact, benefits paid for employees are taxable non-wage income that must be included in federal gross income.

Continuation of Benefits While on PFL

Employees who participate in their employer's health insurance plan are guaranteed continuation of health insurance coverage during the PFL period, as long as the employee continues paying the employee portion of any required healthcare premium contributions.

Job Protection, Reinstatement, No Discrimination or Retaliation

NYPFLL provides job protection for employees on PFL, similar to the FMLA. The Board stated in its Assessment that it plans to issue further guidance on the requirement for an employee to be "restored to a comparable position" upon return from PFL pursuant to Section 203-b of the WCL. Specifically, the Board indicated its plans to address whether and to what extent the "comparable position" standard tracks the meaning of the "same or equivalent position" reinstatement standard under the FMLA.

Unlike the FMLA, the NYPFLL currently does not provide any "key employee" exception to reinstatement.

Employees cannot be subjected to discrimination or retaliation for exercising their rights to PFL.

Enforcement

Claims-related disputes, including eligibility, benefit rate and duration of leave, arising under the PFL are subject to arbitration under Section 221 of the WCL. A request for arbitration must be submitted within 26 weeks of written notice of denial of the claim.

Applying for PFL Benefits

Employees are responsible for notifying their employer if they intend to apply for PFL benefits. Thirty days' notice to employers is required for foreseeable leave. If this is not possible due to the circumstances (e.g., such as an accident or unforeseen health emergency of a family member), the notification must be provided as soon as practicable. Employers may also require employees to provide notice as soon as practicable before each day of intermittent leave. Employers may waive notice requirements if they choose to.

Employees apply for PFL benefits by submitting a request for paid family leave and supporting documentation, such as certifications and proof of claim forms, each in the format to be prescribed by the chair, to the employer's PFL insurance carrier, but only after the employer completes the employer portion of the request for paid family leave. The carrier is responsible for processing claims and making benefits payments.

Notice and Posting Requirements

The final regulations require employers to update their employee handbooks and/or other written policies to include guidance on the PFL and employees' rights and obligations under the law, including on how to file a claim for PFL. In addition, employers must post a notice concerning the PFL (in a form to be prescribed by the chair of the Board, and which remains to be issued). 

Application of PFL to Unionized Workforces

Employers with unionized workers are not required to provide PFL where the applicable collective bargaining agreement provides paid family leave benefits at least as favorable as those mandated by the NYPFLL and such agreement does not allow employees to waive their rights to paid family leave. Although not specifically addressed by the NYPFLL or its implementing regulations, employee payroll deductions for purposes of funding PFL benefits and the interplay between the PFL and the employer's existing policies may be subject to collective bargaining.

Successor Employer

An employer who by operation of law becomes a successor to a covered employee, or who acquires by purchase or otherwise the trade or business of a covered employee, immediately becomes a covered employee and must maintain PFL benefits for the acquired employees.

Interplay of the NYPFLL and FMLA, New York City Earned Sick Time Act, State Disability Laws

FMLA

Starting in 2018, periods of federal FMLA leave and PFL for the same qualifying event will usually run concurrently; provided, however, that the employer has notified the eligible employee that the period of PFL is concurrently designated as FMLA leave and has provided the required FMLA notices and forms to the employee. If the employer fails to provide such notice, it will be deemed to have permitted the employee to receive PFL benefits without concurrently using the benefits available under the FMLA. 

The final regulations further confirm that leave taken for an employee's own serious health condition under the FMLA may not be counted against his or her PFL entitlement.

Under the NYPFLL, employees must calculate paid leave usage using a 52-week "look back" for each day the leave is to be used. As the Board's Assessment points out, the FMLA permits employers to use a similar rolling look-back methodology, along with a number of other options for calculating the 12-month period for employees' maximum leave under the law. For ease of administration of FMLA leave with PFL, employers may want to use similar rolling look-back methods for calculating employees' maximum leave entitlements under both the NYPFLL and FMLA.

Sick Pay

In its Assessment, the Board stated that "[i]f the rules governing an employee's use of sick time allow them to use the accrued time off to care for a serious [sic] ill family member"—which is the case for employees covered by the New York City Earned Sick Time Act (NYCESTA)—such time "falls within Section 380-6.2(a) of the... regulations" and an employee may elect to use such paid sick time concurrently with PFL and receive 100 percent of his or her salary during that period.

The Board reiterated, however, that "[l]eave for an employee's own illness does not qualify as paid family leave" under the NYPFLL, and, pursuant to Section 206(3) of the WCL, an employee would be precluded from receiving both PFL benefits and sick pay for the employee's own illness during the same period.

DBL

Employees cannot receive DBL and PFL at the same time. The leave benefits have to be taken in sequence. Thus, for example, while an eligible employee may opt to receive DBL and PFL benefits during a post-partum period, she may not receive both benefits at the same time.

And, if an employee qualifies for both DBL and PFL, the combined duration cannot exceed 26 weeks in a consecutive 52-week period (computed retroactively from the start of any leave). The Board noted in its Assessment that during the first year of PFL implementation in 2018, the 52-week "look back" period will extend back into 2017.

Use of Accrued Paid Time Off During PFL

An employer may permit, but cannot require, employees to use accrued vacation or other PTO so that the employee can earn a full salary during his or her leave. As written, neither the statute nor the current regulations or Assessment permit employers to compel employees to use available paid leave time toward the PFL benefit as permitted under the FMLA.

That said, an employer covered by the FMLA that designates time off for the same qualifying event as concurrent leave under both the NYPFLL and FMLA may charge an employee's accrued PTO in accordance with the provisions of the FMLA and its FMLA policy.

The final regulations clarify that when an employer offers, and the eligible employee exercises, an option to charge all or part of his or her PFL time to unused accruals or other paid time off and receive full salary, the employer may request reimbursement out of any PFL benefits due or to become due by filing a claim for reimbursement with the carrier prior to the carrier's payment of such benefits.

What Should Employers Do Between Now and January 1, 2018?

  1. To the extent you have not already done so, contact the insurance carrier providing your DBL coverage—whether a private carrier or the State Insurance Fund—to make sure PFL coverage is added to your policy.
  2. If self-insured for DBL and you want to also self-insure for PFL, consult with employment counsel immediately to assist in the preparation and submission of your approval application.
  3. In advance of January 1, 2018, prepare your payroll function or work with third party payroll providers to set up employee payroll deductions, to accumulate funds to pay for the premiums your carrier will charge for PFL coverage.
  4. Provide advance notice to employees of payroll deductions and provide ineligible employees (those who will not work 26 consecutive weeks or 175 days in a 52-week period) with the option of signing a waiver.
  5. Consult with employment counsel regarding necessary employee handbook policy revisions and additions required prior to January 1, 2018, including to address interplay between PFL, DBL, FMLA, NYCESTA and other leave policies.
  6. By January 1, 2018, display a poster regarding PFL coverage in your place of business, similar to the poster required for workers' compensation or DBL coverage. If insured by a third party, your insurance carrier will supply this poster.
  7. Begin training HR and others responsible for administering PFL benefits about employees' rights and obligations, as well as the employer's obligations under the law.

For Further Information

If you have any questions about this Alert, please contact any of the attorneys in our Employment, Labor, Benefits and Immigration Practice Group or the attorney in the firm with whom you are regularly in contact.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.

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.