Paid Family Leave in a Nutshell
New York’s Paid Family Leave Benefits Law (PFL) affects not only employees but employers, too. It is important to stay up to date on this legislation and how its passing can affect your business. Unlike The Family and Medical Leave Act (FMLA), which only applies to companies with 50-plus employees, PFL will apply to any employer with one additional employee.
This is a huge difference. Now virtually every New York State resident who qualifies is entitled to take paid leave under PFL for up to 12 weeks each calendar year. However, PFL is designed as a phased-in program and employees will only be entitled to eight weeks paid leave starting Jan. 1, 2018, and will not be able to take 12 weeks paid leave through PFL until Jan. 1, 2021. So as an employer, here’s what you should know about PFL:
What is PFL
There are three scenarios in which PFL can be applied:
- To care for a family member with a serious medical health condition.
- To enable men and women time to bond with their newborn, adopted child, or to welcome a child into foster care.
- To take care of family matters in which a family member is on active duty or facing impending call to active duty (“family member” refers to spouse, child, domestic partner, parent, grandparent, and/or grandchild). An employee cannot take time off through PFL to care for their own health.
Additionally, employees must work more than 20 hours a week and must be employed with their current employer for at least 26 consecutive weeks. If the employee works less than 20 hours per week, the employee must work at least 175 days for the employer to be eligible. If you fall within that bracket and work less than 20 hours per week but worked 175 consecutive days or more with that employer, there is no weekly hour requirement. Independent contractors are not eligible for PFL.
Private employers with more than one employee will have the option to purchase a PFL insurance policy financed through employee payroll deductions, or the employer can self-insure. The amount deducted from employee paychecks cannot exceed $1.26 weekly.
If the employer opts not to self-insure, PFL will be added to the employer’s existing New York Statutory short-term disability insurance policy under New York’s Disability Benefits Law. This means the employer will not have to pay PFL benefits directly to employees. Starting July 1, 2017, employers are allowed to start taking the PFL deduction amount from employee paychecks to pre-emptively prepare for PFL coverage beginning Jan. 1, 2018. Furthermore, if the employer elects to insure through payroll deductions, the employee will send the information directly to the carrier to review the claim.
If the employer decides to self-insure, the employee will need to send the information to the employer and the employer has the responsibility of reviewing the claim and deciding if it qualifies under PFL. If the claim does qualify, the employer must process and then distribute the claim benefits to employees. If the employer elects to self-insure, PFL processing and distributions can be extremely expensive and taxing on a company that does not have adequate support or administrative staff in place.
Employees will be responsible for informing their employer if they plan on using PFL benefits and must give at least 30 days’ notice to the employer (some exigent circumstances may override the 30 days notice rule). This is a mandated federal program, so employees do not have the choice of opting out of the payroll deductions. It is suggested that employers begin to take the PFL deductions from employee paychecks now because the PFL deductions will be due around the same time that short-term disability premiums are due.
PFL is job-protected, meaning when and if an employee takes leave under PFL, upon the employee’s return he or she must be placed in the same position held immediately before leave or in a comparable position with comparable benefits. Comparable benefits include comparable conditions of employment, pay, the number of sick/vacation days, and career advancement opportunities. Employers cannot discriminate or retaliate against employees taking leave under PFL. Employers must also maintain health insurance benefits for employees, even when they are on leave. Moreover, employers must comply with New York State’s instructions on how to post notices of PFL enactment in an easily viewable location.
There will be a penalty resulting in a fine up to .5 percent of the employer’s total weekly payroll wages for the period of non-compliance with the state’s PFL notice instructions and an extra fee of no more than $500, paid to the Special Fund for Disability Benefits.
Furthermore, if an employer does not provide health insurance for employees while they are on PFL, the employer is liable for all the employee’s medical costs incurred during their time on PFL.
Paid Time Off
Unlike FLMA, under PFL, employers cannot ask, force, and/or require employees to use any of their sick and/or vacation days while they are on PFL leave.
The amount allocated per employee varies depending on the employee’s average weekly salary and New York’s average weekly salary. PFL will give the employee the lowest wage amount of the two. There is an implementation schedule that extends into 2021.
Time will tell how this will impact employers but the changes appear to be here to stay.