On April 4, 2016, New York Governor Andrew Cuomo signed legislation that included a phased-in program of paid family leave benefits providing employees with up to 12 weeks of paid family leave (PFL) at 66 2/3% of the New York State Average Weekly Wage (NYSAWW). This legislation is to date, the richest leave benefit in the US.

The new paid leave benefit becomes effective for employers subject to the New York Workers Compensation Law on January 1, 2018. There is still much unknown about how the law will be implemented and it could have significant impact on those employers who insure their New York Disability Benefits Law (DBL), the state mandated disability benefit in New York.

Key Provisions

Eligible employees are defined as employees in New York who worked for the employer at least 26 or more consecutive weeks. An eligible employer is one who is covered by the New York Workers Compensation Law and will be required to permit eligible employees to take paid leave and will have to deduct contributions from their employee’s pay to fund paid leave benefits.
Employees receive PFL benefits;

To provide care for a family member because of the family members serious health condition;
Bond with their child during the first 12 months after the child’s birth, or during the first 12 months after placement of the child for adoption or foster care;
To attend to obligations arising because the spouse, child, or parent of the employee is on active duty or has been notified of an impending call to active duty in the United States armed forces.
Benefits will be phased in on or after January 1, 2018 as follows;

*Benefits cannot exceed the NY State Average Weekly Wage at the same benefit percentage in each year.

Funding for PFL Benefits

Funding for PFL benefits will come from employee contributions that will be established by the state. Employers will be required to take payroll deduction of the cost for PFL but will have several options on how to provide coverage to their employees;

Employers will have the option to provide PFL by purchasing private insurance similar to what is available today for satisfying the NY Disability Benefits Law (NYDBL). At this point, the state is implying that an employer that insures their NYDBL obligation must also insure the PFL obligation.
Employers can also purchase insurance from the state fund or self insure the entire program (NYDBL and PFL). Whatever option an employer takes, they must treat NYDBL and PFL the same.
Insurers that currently provide insurance for NYDBL are assessing this law and awaiting additional regulations prior to implementation. While many insurers are expected to provide insured plans for PFL, others may drop out of the state due to initial rating requirements being imposed by the state. The state is expecting to implement a single community rate for all covered employees and applying a uniform loss ratio among all insurers providing PFL.

Employers will also be required to provide each employee with a printed or electronic notice of rights under this law when the employee is out more than seven consecutive days. The notice must be provided within five business days after the employee provides notice of the need for leave or after the employer knows the absence is due to disability whichever is later.

Coordination of PFL and FMLA

PFL benefits may run concurrently with FMLA unless the employer permits otherwise, but other similarities also exist.

Both provide up to 12 weeks for the care of a covered family member or obligations arising from a family member being called to active duty in the United States Armed Forces;
Both require the employee taking leave to be restored to the same position or similar position they held prior to taking leave;
Both require the employer to maintain an employee’s health insurance benefits during the period of leave, but do not require the accrual of seniority or other benefits during their leave as if they had not taken leave;
Both require completion of a notice to the employer and a medical certification form prior to commencing leave or as soon as practicable;
Both require 30 days advance notice of foreseeable leaves or a soon as practicable;
Both prohibit retaliation against an employee for requesting or receiving PFL benefits.
One area that is not similar is eligibility, in that FMLA only covers employees who work at a location of 50 or more employees within a 75-mile radius; while PFL covers any number of employees as long as the employee is covered under the New York State Workers Compensation Law.

Additionally, FMLA eligibility requires an employee to work one year and a minimum of 1250 hours, where PFL only requires 26 weeks of work with an employer and no minimum hour’s requirement.

How does PFL compare to other Statutory Paid Leave Programs?

 

Conclusion

There are still many unknowns that the Chair of the Workers’ Compensation Board will need to clarify through issuing interpretive regulations. These regulations will provide employers, insurers and third party leave administrators with clarification and guidance prior to the effective date of January 1, 2018.

This provides employers time to prepare payroll functions to add another deduction for family leave benefits (in an amount yet to be determined) and to review and amend their own paid time off, leave of absence and family medical leave policies to comply with this new law.

Your Trion Strategic Account Managers are here to answer any questions you might have as you prepare to comply with these requirements. If you are not currently a Trion client, and would like assistance navigating these changes, please contact us today by calling 1-877-652-6712 or emailing us at trionsales@trion-mma.com.

About Trion Group, a Marsh & McLennan Agency, LLC (Trion) Compliance Alert

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