New York State finalized its Paid Family Leave program ("NYPFL") by adopting regulations on how the law will be implemented. For those New York employers not yet familiar with the NYPFL, below are some key elements:
Coverage
- Coverage will begin to phase in as of January 1, 2018.
- Applies to all private employers, regardless of size (public employers may opt in).
- Employees become eligible to take NYPFL leave after working 20 or more hours per week for 26 consecutive weeks or after the 175th day worked (regardless of the number of hours worked).
- Qualifying reasons for taking paid leave under the NYPFL include caring for a new child within the first 12 months of birth or placement, exigent circumstances arising from service of a family member in the U.S. armed forces, and caring for a family member with a serious health condition.
- If it is obvious that an employee will not have worked enough hours to become eligible for NYPFL leave (for example, because he or she is a seasonal employee), the employer must provide the employee with the option to waive coverage and not pay contributions. New York State's Workers' Compensation Board will develop a waiver form.
Benefit
- The program provides eligible employees with up to 12 weeks of NYPFL leave (8 weeks in 2018, 10 weeks in 2019, and 12 weeks in 2021).
- Eligible employees will receive up to a percentage of their average weekly wage (50% in 2018, 55% in 2019, 60% in 2020, and 67% in 2021) or the state's average weekly wage (currently $1,305.92), whichever is less.
- For 2018, the maximum benefit an employee may receive per week will be $652.96.
Funding
- NYPFL benefits are funded by employees through a payroll tax. For 2018, the maximum employee contribution has been set at 0.126% of an employee's weekly wage rate, up to the statewide average weekly wage. The maximum employee contribution for the 2018 benefit year is approximately $1.65 per week.
- While it is not mandatory, employers may elect to begin collecting employee contributions now for the 2018 benefit year. These payroll deductions would be used to offset the cost of acquiring or providing the mandated coverage.
- Employers may not retroactively collect employee contributions.
Interaction with FMLA, Disability, and Paid Time Off ("PTO") Policies
- Employees eligible for both NYPFL and FMLA leaves of absence may not receive more than 12 weeks of protected family leave per 52-week period.
- Employees may not receive disability benefits and paid family leave benefits at the same time.
- Employers may require employees to choose whether to use vacation or PTO (full salary) or NYPFL leave (partial salary), but they may not compel their employees to use vacation or PTO time during or instead of NYPFL leave. Employers may permit employees to use vacation or PTO to supplement NYPFL benefits in order to receive up to their full salary.
- Employers that pay employees their salaries during NYPFL leave may request from their NYPFL benefit provider reimbursement of any benefits due an employee that were already paid by the employer.
Employer Obligations and Penalties
- Employers must continue providing health insurance to employees taking NYPFL leave, as long as the employee continues to pay his or her share of the premium.
- Employers must provide notice to their employees about the NYPFL, including by updating their employee handbooks and stand-alone policies and posting a form notice (to be issued by the state).
- Since NYPFL is job-protected leave, employees must be returned to their same or a comparable position.
- Employers that fail to provide the requisite coverage may be subject to a fine of up to 0.5% of weekly payroll during the lapse and an additional sum of up to $500.
- When an employer fails to provide coverage and an employee takes leave under NYPFL, the employer is liable for the payment of the benefit and waives the employee contribution amount for that time period.
- An employer that fails to continue an employee's health insurance during NYPFL leave will be liable for the employee's medical costs during the leave.
New York employers are urged to review their family and parental leave policies and forms to ensure compliance with the NYPFL by January 1, 2018. Lowenstein Sandler LLP's employment law attorneys would be pleased to assist in updating your employee policies and to answer any questions you may have.