What You Should Know About Paid Family Leave

New York State will join California, Rhode Island and New Jersey as the only states that provide Paid Family Leave benefits beginning January 1st, 2018. This law allows employees to take time off to bond with their newborn child, care for a close relative with a serious health condition, or help relieve pressures on a family when someone is called to active military service. The question many employers are asking is what impact will this have on the employer and how should they prepare for the administration of the Paid Family Medical Leave Act?

Eligibility

The new Paid Family Leave Program will apply to any private New York employer that’s covered by the worker’s compensation law. Employees that work at least 20 hours per week are eligible after 26 weeks of being employed while those that regularly work less than 20 hours per week are eligible after 175 days worked. Eligible employees cannot be required to take all their sick leave or vacation time before using paid family leave; however, employers can provide the option to allow employees to use sick time and vacation time at full pay.

Eligible employees will receive 8 weeks of Paid Leave at a rate of 50% of their average weekly wage, not to exceed 50% of the NYS Average Weekly Wage ($1,305.92 in 2017). This will phase into 12 weeks of Paid Leave with a 67% wage cap by year 2021. The chart below outlines the graduating benefits through 2021:

Year Weeks Available Max % of Employee Average Weekly Wage Cap % of State Average Weekly Wage
2018 8 50% 50%
2019 10 55% 55%
2020 10 60% 60%
2021 12 67% 67%


Funding

Insurance coverage for Paid Family Leave is required to be available for employees effective January 1, 2018 (or earlier if adopted).  In most cases, this coverage will be added to an employer’s Disability Insurance Policy. However, employers can deduct the insurance premiums via employee payroll deductions to cover the entire cost, essentially making it an employee funded benefit. However, the maximum contribution in 2018 is 0.126% of an employee’s weekly wage up to the annualized New York State Average Weekly Wage.

Employer Responsibilities

While the benefits provided under the Paid Family Leave Program are employee-funded, employers have reporting responsibilities that cannot be ignored.  In summary, below is an action item listing for employers to consider in order to maintain compliance beginning January 1, 2018:

  • Employers should contact their disability insurance carrier about obtaining Paid Family Leave coverage.
  • Employees are entitled to be reinstated to their same or comparable job upon return from Paid Family Leave.
  • Failure to reinstate employees to their same or comparable job may leave employers exposed to discrimination and/or retaliation claims.
  • Employers must continue employees’ health insurance while they are on Paid Family Leave. Employers may require that employees continue to pay their health insurance premium contributions.
  • Employers must ensure that their employees are aware of the Paid Family Leave program and that their organizational policies comply with the law.
  • Employers must display a poster regarding Paid Family Leave coverage in their place of business, similar to Workers’ Compensation or Disability Benefits coverage.

While the employer must maintain compliance with the Paid Family Leave Program by following the procedures above, the employee also has responsibilities.  Employees cannot take off work without giving the employer adequate time and notice. The claim procedure states that when an employee has a foreseeable situation, they should give their employer at least 30 days advanced notice. Obviously, there are some unforeseeable events that trigger the need to take leave, the employee must notify his employer as soon as possible. The claim form will be provided by the employer’s Paid Family Leave insurance carrier or on the Paid Family Leave website. An employee must submit documentation validating their reason for taking Paid Leave including but not limited to: the birth certificate for a newborn child, a medical certification from the care recipient’s health provider, or a Military Qualifying Event certificate (From PFL-5).