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Employment Law Alert: New York State Institutes Family Paid Leave for Private Employees Starting January 1, 2018

11.06.2017

By Peter R. Porcino

New York State’s Family Paid Leave Program becomes mandatory for most employers as of January 1, 2018.  Significant penalties apply for non-compliance. 

Financial Concerns:  You will undoubtedly be reading about the new program over the next two months, and we will briefly describe how it works.  However, we want to emphasize the financial aspects before getting to the details.  This is not a new cost center for New York employers.  While you may incur costs in administering this program for your employees, the cost of coverage is paid by employees through payroll deductions.  This program works much like the temporary disability insurance program in place for over 60 years in New York.  In fact, all insurers who offer temporary disability insurance are required to offer coverage for the Family Paid Leave Program.  In addition, the State Insurance Fund, which currently offers disability insurance coverage, will be offering insurance for the Family Paid Leave Program.  And finally, employers can qualify to become self-insured.  The primary cost to employers is covering the work of an employee who takes advantage of the leave program.  In addition, employees must be reinstated to the same or a comparable position when they return to work.

Cost:  All paid family leave policies are subject to community rating and may only charge fixed premiums authorized by the Department of Financial Services (“DFS”).  For 2018, the community rated premiums will be 0.126% of wages up to the state average weekly wage.  Similarly, the DFS has set the maximum employee contribution at 0.126% of wages up to the state average weekly wage. This translates into a maximum withholding of $1.65/week.  Thus, the employee contributions are equal to the premiums for the policies.

Employees Covered:  Most private employees in New York are covered.  It does not matter how small the employer.  Public employers and many charitable employers are not covered.  However, domestic workers working 40 hours per week for an employer are entitled to coverage.

Purposes:  Covered employees will be able to take paid family leave in order to: 1) Bond with a new child (including a child newly placed for adoption or foster care); 2) Care for a family member with a serious health condition; or 3) Address a qualifying exigency connected to a close family member’s active duty military service.   Note that family paid leave does not cover the employee’s own illness.

Benefit Level:  The benefit level phases in over four years. The benefit level is represented as a percentage of an employee’s own average weekly wage (AWW), up to a cap represented as a percentage of the state average weekly age (SAWW). In 2018: 50% of AWW, up to 50% of SAWW, with a maximum benefit: $652.96/week; in 2019: 55% of AWW, up to 55% of SAWW; in 2020: 60% of AWW, up to 60% of SAWW; and 2021 and later: 67% of AWW, up to 67% of SAWW.

Number of Weeks Allowed:  The number of weeks of paid family leave a worker can take in a 12-month period under the law phases in over four years.  In 2018: up to 8 weeks; in 2019-2020: up to 10 weeks; and in 2021 and later: up to 12 weeks.

Taking Leave:  Paid family leave may be taken intermittently in units as small as one day.  No other limits or restrictions are imposed on the taking of intermittent leave.  Benefits are payable from the first day of paid family leave, with no unpaid waiting period.  Applications are made to the carrier, supported by appropriate documentation.

Prior Notice Requirements:  Employees must provide at least 30 days’ advance notice, if possible, and when not possible, as soon as practicable.  If the employee fails to give adequate notice of foreseeable need for family leave, the carrier may partially deny the claim from the date notice is provided.  The notice must be sufficient to make the employer aware of the qualifying event and the anticipated timing and duration of the leave, and also identify the category of leave.  The employer may ask for clarification.

Enforcement:  The Workers’ Compensation Board is charged with enforcement of employee rights under the statute.

Overlap:  There may be some overlap with other programs and laws.  Disability benefits cover disability of the employee, with lower benefits but for a longer duration.  There are City, State and Federal discrimination laws that may come into play in certain situations.  But the most likely overlap will be with the Federal Family and Medical Leave Act (“FMLA”).

FMLA:

  • There are initial qualifications, and in particular, FMLA only applies to companies with at least 50 employees within a 75-mile radius.
  • FMLA can be used for the same three purposes as the new New York law (bonding with child, care for relative, military exigency), and also to address the employee’s own serious health condition.
  • FMLA coverage is generally unpaid.
  • The new law requires FMLA to be taken at the same time as New York Family Paid Leave, where possible, but an employer must notify the employee that it is requiring that the two be taken concurrently.
  • The definition of family is narrower under FMLA: coverage is limited to a parent, child (under 18 or disabled) or spouse.

Remember that the new law takes full effect on January 1, 2018.  Employers are now authorized to begin deductions from employee pay to meet the premium requirements commencing on January 1, 2018.

Please contact Peter R. Porcino at: prp@cll.com or Simon Gerson at: sxg@cll.com if you have questions or need further assistance.

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