NY Employers: Prepare for Paid Family Leave

Starting January 1, 2018, the New York State Paid Family Leave Program (PFL) will be a mandatory benefit offered to most New Yorkers. The benefit will supply paid-leave for workers to bond with a new child, care for a loved one with a serious health condition, or to provide some relief to families when someone is called to active military service.

pfl

PFL Program Basics

  • All “Covered Employers” are required to purchase a PFL insurance policy or self-insure. Covered Employers include any private-sector company that has at least one employee
  • Generally, the policy will be included as a rider under an employer’s existing disability benefits policy, unless the employer self-insures
  • The PFL insurance premium is funded by employees through payroll deductions, unless the employer chooses to cover the entire cost of the plan
  • Employee contributions can be collected prior to obtaining insurance policy or self-insured approval
  • The earliest payroll deductions could have begun on July 1, 2017, but they are not required to begin until January 1, 2018

Employee Eligibility and Contribution Rates

  • Employee eligibility is based on:
    • Full-time employment with a regular schedule of 20+ hours/week for 26 weeks
    • Part-time employment with a regular schedule of less than 20 hours/week for 175 days
  • The Paid Family Leave rate is set by New York State Department of Labor’s Research and Statistics Division and can be adjusted on an annual basis on September 1, effective every January 1
  • There is no fixed contribution rate for the benefit, because it is based on the employee’s salary
  • The 2018 maximum weekly contribution for Paid Family Leave is 0.126% of an employee’s weekly wage, capped at current NY Statewide average weekly wage (NYSAWW) of $1,305.92. This means the 2018 maximum contribution is $1.65/week for employees earning the NYSAWW or above
  • There is no waiting period before an employer can take payroll deductions for PFL
  • Benefits are payable on first full day PFL leave is required, which could be as soon as January 1, 2018
  • Employees need to give 30 days’ notice for a foreseeable leave. This means, notices could come in by December 2, 2017

Timeline for the PFL Program

Paid Family Leave benefits phase in over 4 years with gradually increasing benefit duration and amounts:

pfl1

pfl2

How should employers prepare?

  • Determine if the company will self-insure, or will add a rider to the disability policy
  • Determine if the company will deduct the PFL contributions from payroll as employee deductions, or will cover the employee cost
  • Identify a process to determine each employee’s PFL contribution rate based on their wages (Note: StratEx can help with this)
  • Identify a process to track PFL time taken, since it can be taken intermittently (Note: We can help with this, too) 

Additionally:

  • Employers must include PFL program details in employee handbooks
  • A printed notice must be displayed, giving details of the PFL Program by January 1, 2018.

For more information regarding the NY PFL program, including helpful Employee and Employer Fact Sheets, please navigate to the New York State PFL website.