New York State-Paid Family Leave-Are You Ready?

Starting January 1^st, 2018, a new law will take hold across New York State that will provide paid family leave for most employees of private employers. New York’s Paid Family Leave provides job-protected, paid time off for:

• Bonding with a newly born, adopted or fostered child
• Caring for a close relative with a serious health condition
• Assisting loved ones when a family member is deployed abroad on active military service

The new program, which is like the state Disability Leave Insurance program, will be phased in from 2018 through 2021. In 2018, eligible workers will be able to take up to eight weeks of leave while receiving 50 percent of their average weekly wage or 50 percent of the New York state average weekly wage, whichever is lower. The number of weeks of leave available to eligible employees under Paid Family Leave and the benefits paid are phased in as follows:

Employees who work 20+ hours weekly will become eligible for Paid Family Leave after working for their current employer for 26 consecutive weeks. Employees who work less than 20 hours weekly will become eligible on the 175th day of employment. Employers are required to provide employees who are not expected to be eligible for Paid Family Leave coverage with an opt-out waiver. More information is available here.

Employers are required to carry Paid Family Leave insurance coverage, as a rider to their existing disability insurance, or comply with the requirements to self-insure by January 1, 2018. The program is designed to be funded through employee payroll deductions but, employers may choose to cover the cost of insurance premium payments and not deduct contributions from employees.

Here’s where things can get tricky. The amount of per employee payroll deductions, the maximum employee contribution for coverage beginning January 1, 2018, shall be 0.126 percent of an employee’s weekly wage up to and not to exceed the statewide weekly average. The plan is to have employees contribute a small percentage to pay for coverage and for employers to not pay at all. But employee contributions may not be enough to cover the payments. The plan may not be as self-sufficient as intended. Another issue is that an employee must take an entire day rather than a few paid hours. For example, if an employee needs to take a sick relative to a doctor’s appointment, under Paid Family Leave, they are required to take the entire day off, even if they only actually needed the morning.

Paid Family Leave is certainly a noble, well intended goal but it would not be surprising if the law as constructed goes through some adjustments as it phases itself in for the next few years. Until it is up and running it is difficult to predict exactly how it will work. Regardless, as New York employers, come 2018 Paid Family Leave is the law of the land and you need to be prepared for it.

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