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Are New York Employers Prepared For Paid Family Leave?

Published by on August 21, 2017

The new paid family leave regulations take effect January 1, 2018, but there are steps NY employers should be taking in the meantime to prepare.

The new paid family leave regulations take effect January 1, 2018, but there are steps NY employers should be taking in the meantime to prepare.

New York’s Paid Family Leave law takes effect January 1, 2018. The full text of the new regulations may be found here. The law applies to all full-time or part-time private employees in the State of New York. Full-time employees must be employed for at least 26 weeks and part time employees for 175 days to be eligible. Employees in jobs that do not allow for 26 continuous weeks of work (e.g. seasonal workers) are exempt from participation. Public employers have discretion whether to opt into the program or not.

The new law allows employees to take paid leave to bond with a new child (which includes childbirth, adoption, or foster placement), care for a close relative with a serious health condition (spouse, domestic partner, child, parents, parents in-law, grandparent, or grandchild), or help relieve family pressure due to active military duty. The law does not apply for leave for an employee’s own serious medical condition and employees who are not working and collecting worker’s compensation are not eligible. The law applies to U.S. citizens and non-citizens alike, regardless of immigration status.

Employees are job protected while on leave and their health insurance must be continued but employees who are required to contribute to their premiums must continue to pay their portion of premiums. Employers may not force an employee to use sick or vacation time before taking paid family leave. Nevertheless, FMLA-covered employers may require that paid family leave run concurrently with FMLA leave, if the leave is for a FMLA-covered purpose. If they run concurrently, the FMLA rules regarding the use of accrued PTO apply. Note that employees must choose to either use their unused accrued PTO or may choose to receive paid family leave benefits, but may not receive both at the same time. Employees are required to give 30-day notice for foreseeable leave.

The law has a four-year phase in process. The first year, an employee may take up to eight weeks of paid leave in a 52-week period, ten weeks during the second and third years, and 12 weeks for the fourth and subsequent years. The maximum percentage of an employee’s average weekly wage an employee may draw is: 50% for year one; 55% for year two; 60% for year three; and 67% for year four. The benefits are capped at the state average weekly wage as calculated by the state, at the same percentage rates as above. Thus, employees earning more than the average weekly rate of $1,305.92 in 2018 will be capped at 50%, or $652 per week.

The Paid Family Leave program is designed to be entirely employee-funded through payroll deductions. An employer can begin these payroll deductions in the amount allowed under the law as of July 1, 2017. Although the program will be funded by employees, businesses will need to purchase a paid family leave insurance policy.

Welter Insight

New York employers can, and should, be preparing for this new Paid Family Leave law before it takes effect at the beginning of the new year. Employers should be taking payroll deductions starting July 1, 2017. Employers should also be preparing new written guidance for their employees on paid family leave in their employee handbooks, or written handouts, and post printed notices as required by state law. Employers should anticipate payroll and staffing issues that may impact their business if employees start taking paid leave for up to eight weeks as early as January 1, 2018. Lastly, employers should stay informed on the yearly changes in the program over the next four years, including the variations in leave duration and benefits requirements.

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