New York State Paid Family Leave Act

When Governor Andrew Cuomo announced New York State’s latest mandated worker benefit – an enhanced Paid Family Leave (PFL) Program, it was called the “most comprehensive program of its kind in the nation.” Starting January 1, 2018 PFL becomes a mandatory benefit in New York State, meaning that eligible employees have the right to use PFL the very first day of 2018.

The PFL program will provide New Yorkers job-protected, paid leave in three major categories:

  1. Bonding with a new child after birth, adoption or fostering of a new child.
  2. Providing care for a loved one with a serious health condition inclusive of spouse, domestic partner, child, parent, parent-in-law, grandparent and grandchild. If this person lives outside of NYS you are still covered by PFL to take leave, to care for them.
  3. Help relieve family pressures when someone is called to active military duty.

Provided though New York State’s existing Disability Benefits Law (DBL), PFL is mandatory for almost all private sector employers, and employees. To put it simply if you are an employer that has to provide disability benefits, you have to provide PFL. It is voluntary for public sector employers. The program will give eligible employees the right to a leave of absence and guaranteed reinstatement, even if they do not have federal Family and Medical Leave Act (FMLA) protection. However, if you have both PFL and FMLA they will run in parallel to one another – meaning that PFL time can’t be added to FMLA time, and vice versa, to extend overall leave.

Key difference between PFL and DBL:

  • DBL is used for an employee’s OWN non-occupational injury or illness, while PFL allows employees to care for someone else.

Key differences between PFL and FMLA:

  • PFL is mandatory for private-sector employers with one or more employees, while FMLA is mandatory for private sector employers with over 50 employees.
  • PFL is paid and FMLA provides no monetary benefit.
  • PFL is regulated at the state level and FMLA is regulated at the federal level.

With any mandated government program there are many rules and regulations to be aware of, so what are some key points both employers and employees need to know?

For Employers:

  • Employers may deduct the premium cost for the PFL insurance policy from employees through a payroll deduction or choose to cover the cost themselves.
  • PFL benefits will phase in over the next four years, gradually increasing the benefit amount every year.  The table below shows the anticiapted timeline from New York State’s Website:
Year Weeks Available Max % of Employee Average Weekly Wage Cap % of State Average Weekly Wage
2018 8 50% 50%
2019 10 55% 55%
2020 10 60% 60%
2021 12 67% 67%
  • You cannot require employees to exhaust their accumulated PTO before letting them go out on PFL.
  • Employees will need to give 30 days’ notice for foreseeable leave.
  • PFL is job-protected meaning that an employer must place an employee in the same position or a comparable position upon their return.
  • PFL is based on each employee’s wage/salary and can be taken in daily increments (i.e. every other Friday). This may greatly increase the complexity of tracking employee absences and payroll.
  • As mentioned above, PFL can be taken as early as January 1, 2018 so it may be beneficial to start planning for potential absences.

For Employees:

  • In 2018 that maximum employee contribution will be 0.126% of their weekly paycheck.
  • The income level plateaus at $1,305.92 per week. What does this mean? According to the NYS Dept. of Labor’s website, in 2018, an employee who makes $1,000 a week would receive a benefit of $500 a week (50% of $1,000). Another employee who makes $2,000 a week would receive a benefit of $652.96, because this employee is capped at one-half of New York State’s Average Weekly Wage (NYSAWW) —currently $1,305.92. Half of that amount is the $652.96 benefit.
  • There is a qualification period to use PFL benefits.
    o If you work more than 20 hours a week you must be employed at least 26 consecutive weeks at your current employer.
    o If you work less than 20 hours a week you must be employed for at least 175 workdays at your current employer.
    o Time worked at a previous employer does not transfer to a new employer, if you change jobs.
    o If you spend time out on DBL, this time does not count towards your qualification period.

With any piece of government legislation comes shifting viewpoints. According to Mike Trabold who is the director of compliance at Paychex, in an interview he did with Small Business trends, “the family leave program will create some degree of a burden for businesses, but said the news is not all bad and that the state tried, in his opinion, to make things less painful.” Trabold also stated, “small businesses will be able to attract capable workers more readily with paid family leave in place, otherwise, employees would be forced to resign or fear being fired just to take care of a household member.”

Alternate viewpoints such as those from the Business Council of New York State, Inc. (BCNYS) are not as friendly towards the new legislation. BCNYS stated that it is the “most expansive and least business-friendly paid family leave law in the nation,” saying that “it places an undue burden on all businesses, especially those with smaller numbers of employees.”

As we inch closer to 2018 it seems as though the New York Paid Family Leave Act is set for implementation. At this point it’s less about opinions and more about making sure employers have the information and resources necessary to kick the program off.

Other resources:

1. New York State developed a website that provides additional information and answers frequently asked questions which you can access at this link –Paid Family Leave: How it Works

2. They also developed a website dedicated to employers which you can access at this link – New York State Paid Family Leave: Employers