Posted by Peter Kutner, CPA
Paid family leave is important. Unfortunately, many New Yorkers experience little or no paid maternity/paternity leave and forgo a paycheck when it’s necessary to care for a loved one with a serious health condition. The Family and Medical Leave Act (FMLA) -- which is unpaid leave -- is helpful, but only goes so far toward mitigating the situation.
Only an estimated 12% of private-sector workers have access to paid family leave through their employer. This will change, beginning January 1, 2018, as all private employers will be required to participate in the New York State Paid Family Leave (NYS PFL) benefit law, which is meant to provide paid leave for employees in certain situations. NYS PFL exceeds what is required under FMLA with regard to protections and payments, and thereby imposes new family leave obligations on New York employers.
1. What is the NYS PFL law?
NYS PFL will provide eligible employees (both full- and part-time) with up to eight weeks (accreting to 12 weeks when fully implemented by 2021) of paid family leave annually to care for an infant (or newly-adopted or fostered child – including those born or placed for adoption prior to January 1, 2018), a family member with a serious health condition (including a spouse, domestic partner, child, parent, parent-in-law, grandparent, or grandchild), or to assist with family obligations when a family member is called to active duty. Note: NYS PFL is not available for prenatal conditions or an employee with serious health conditions.
By 2021, New York State will have the longest, most comprehensive paid family leave program in the U.S.
2. Who is subject to it?
NYS PFL applies to all private employers with at least one employee in New York State. This includes out-of-state employers that have one or more employees working in New York (e.g., those working remotely). Public employers are generally exempt from NYS PFL.
3. Who is entitled to NYS PFL benefits?
Virtually every full-time or part-time private employee in New York State will be eligible for paid family leave.
Full-time employees who have been employed for at least 26 weeks are eligible, while part-time employees (defined as those scheduled to work fewer than 20 hours per week) must work at least 175 days to be eligible. Those requirements apply regardless of the number of hours per week actually worked and regardless of the employer’s size. Note: Both non-U.S. citizens and undocumented employees who otherwise meet eligibility requirements are eligible for NYS PFL. Employees working fewer than 26 weeks or 175 days in a consecutive 52-week period (e.g., short-term or seasonal employees) may file an NYS PFL waiver, in which case the NYS PFL payroll contribution deductions will be waived (as would the employer’s responsibility to provide benefits to that employee).
4. Who will pay for it?
NYS PFL will be completely funded through nominal employee payroll deductions. Participation is not optional. In fact, you may already be paying for it: employers were able to begin payroll deductions as of July 1, 2017.
5. The nitty-gritty
Covered employers are required to carry NYS PFL insurance or comply with the requirements to self-insure by January 1, 2018. We strongly recommend that you contact your NYS Disability Insurance carrier regarding adding an NYS FPL rider to your current disability policy as soon as possible. This policy should be effective by January 1, 2018.
The maximum employee contribution for coverage beginning January 1, 2018 will be 0.126% of an employee’s weekly wage up to and not to exceed the statewide average weekly rate, which is currently set at $1,305.92. For employees who earn more than $1,305.92 per week, the NYS PFL deduction will be capped at $1.65 per week ($1,305.92 x 0.126%). The deduction percentages and caps may change annually – the deduction percentage may change on January 1; the cap may change on July 1.
NYS PFL insurance coverage is designed to be funded through employee payroll deductions; however, employers may choose to cover the premium payments and not deduct contributions from employees. The number of weeks of leave available to eligible employees under the NYS PFL and the benefits paid will be phased in over several years. The phase-in schedule is:
If you have any questions regarding NYS PFL, please contact your disability insurance company or the New York State website: https://www.ny.gov/programs/new-york-state-paid-family-leave.