Getting to Grips with New York's State Paid Family Leave Law

August 23, 2017
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Family Leave Plan Management

It's been described by New York State Governor Andrew Cuomo as the most comprehensive familyleave plan in the nation. And there's no doubt that the state-wide introduction of Paid Family Leave (PFL) next January 1 will add a very significant benefit to employees.

It will also add to the administrative burden of employers. With contribution deductions already permissible, it's important for group plan managers to get up to speed both on the specific aspects of the new PFL laws as well as the organizational management requirements.

PFL in a Nutshell

First, let's take a quick overview of the legislation, which was signed into law last year by Mr. Cuomo:

In a nutshell, it initially provides for employees to take up to 8 weeks off work on half pay (to a maximum of 50% of New York's Average Weekly Wage - AWW) in any 52-week period:

  • for maternity/paternity leave (known as "bonding leave"), within 12 months of the birth, adoption or fostering of a child. PFL can’t be used for pre-natal care.
  • to care for a sick relative, defined as spouses, domestic partners, children, parents, parents-in-law, grandparents and grandchildren. It includes out-of-state relatives
  • to help out with family obligations on behalf of someone on active military duty abroad or notified of an impending order of active duty.

The law guarantees employees job protection on their return to work and continued health insurance while they are away from work.

It applies to all private employers (even if they only employ one person). Public employers can also choose to opt-in.

PFL is mandatory, employee-funded (though employers can pay if they wish) through payroll deduction, up to a maximum of 0.126% of the employee's gross weekly wage, again subject to a cap of 0.126% of New York's AWW ($1,305.92 for 2017).

This rate applies to all age groups and genders, and benefit entitlement is regardless of citizenship or immigration status.

The benefit will be increased in stages to 67% of the employee's wages for up to 12 weeks of coverage by 2021 -- subject to the same AWW cap.

PFL is not available to employees on total disability benefits or for employees' own health care.

There are very few exemptions to PFL participation -- mainly covering temporary or seasonal workers and self-funded programs.

Administering Paid Family Leave

The Paid Family Leave program will run alongside New York's Disability Benefits Law (DBL), as a rider to DBL policies. The legislation requires that both are contracted from the same carrier.

In our case, DBL Carriers are enhancing its existing and future New York Statutory Disability plans with PFL. Current DBL customers will automatically receive PFL coverage effective January 1, 2018.

Although the premium is separate from DBL, customers will receive a single bill showing both elements separately.

Groups have been allowed to begin payroll deductions since July 1. If you are ready, this needs to be set up by your payroll vendor.

Any contributions you collect must be held until you receive a 2018 Disability premium statement.

One thing we suggest is that if your DBL premium is currently being paid annually (in advance), you may want to switch to quarterly in arrears to allow for upfront deductions to be taken out for proper funding of the plan.

To do this, you'll need to let us know before October 1.

Some carriers have already announced they will be exiting this business. With that in mind, if you know of affected clients who might consider moving coverage, please let Newbridge Coverage know, so we can effect a smooth transition.

Employers are required to include information about PFL in their employee handbooks and to display a poster about the program in their workplace by January 1.

DBL and PFL Compared

There are some similarities between the two programs, such as their provision by the same carrier and the fact that they both are mandatory in the State of New York.

On the other hand, PFL is not subject to a waiting period like DBL. Nor is it related to the employee's health as DBL is.

One of the most significant differences is that is does not require an employer contribution in the way that DBL does.

An employee may receive both sets of benefits but the total cannot exceed 26 weeks during a 52-week period.

More Family Leave Questions?

If you'd like to know more about how PFL affects your business please contact Newbridge Coverage today!

The state's own online information briefing begins at: http://tinyurl.com/NY-PFL-briefing .