10 March 2017

Employment Alert: Paid Family Leave in New York is a Reality

On February 22, 2017, the New York State Workers' Compensation Board published proposed regulations of the New York Paid Family Leave Law (“PFL”), which was signed by Governor Andrew Cuomo on April 4, 2016. The comprehensive PFL will be gradually phased in over four years beginning on January 1, 2018. One of, if not the, most generous law of its kind in the United States, the New York State's PFL will eventually provide a total of 12 weeks of paid family leave for eligible employees to care for and bond with a new born child, care for a family member (including spouse, domestic partner, child, parent, parent-in-law, grandparent, or grandchild) with a serious health condition, or to assist with family obligations during a family member's active military service. Notably, the PFL does not apply to caring for one's own serious health condition, which, under particular circumstances, may fall within the Family Medical Leave Act (“FMLA”), or such programs as Workers' Compensation, or short-term or long-term disability. The PFL will be applicable to all private employers with at least one employee, and will be fully funded through employee payroll deductions. The new published proposed regulations for the PFL, provide more clarity around the obligations of employers, the benefits to employees, and also launched a new website for quick reference. Comments on the proposed regulations must be submitted by April 8, 2017.

Under the PFL Employees will be eligible to take paid family leave if they have been employed by a covered employer full-time for at least 26 weeks, or part-time for at least 175 days. Under the proposed regulations, part-time employees will be eligible to receive a pro-rata portion of the benefit, but employees who regularly work less than 26 weeks or 175 days in a 52-week period have the option to waive the benefit and the contributions from his/her paycheck (thus exempting the employer from the obligation to provide such benefit to that particular employee). Pursuant to the proposed regulations, and similar to the FMLA, Employees will be required to obtain a medical certification from a health care provider or a birth certificate, as applicable, and will be entitled to be re-instated to their position or a comparable position upon return from leave. Expectedly, the PFL also contains anti-discrimination and anti-retaliation protections, as well.

Beginning on January 1, 2018, employees will be able to take a maximum of 8 weeks of leave at 50% of their weekly earnings up to a maximum of 50% of the New York State Average Weekly Wage. As of January 1, 2019 and 2020, employees will be eligible for 10 weeks of paid family leave at 55% and 60% salary up to 55% and 60% of the NY State Average Weekly Wage, respectively. The PFL is expected to be fully implemented as of January 1, 2021, providing employees with 12 weeks of paid family leave per year at 67% of their weekly earnings up to a maximum of 67% of the NY State Average Weekly Wage. The NY State Average Weekly Wage is updated annually, and is currently $1,296.48. As per the proposed regulations, during leave, the employer will be required to maintain employee's health insurance benefits, but need not require continued accrual of other benefits. Employers may begin collecting contributions from employee's paychecks as of July 1, 2017, although the maximum contribution amount is not expected to be set until then.

Under the proposed regulations, employees will be required to request leave by completing a form that the state will generate, or a personalized form which requests the same required information. Employees are expected to provide the employer with at least 30 days' notice when the leave is foreseeable or “as soon as practicable” as the case may be, although like the FMLA, the employee need not officially mention the PFL in order to trigger an employer's obligation to determine whether such leave is applicable. Unlike FMLA which permits employers to run paid time off with leave concurrently, it appears that employers may not require employees to charge any portion of their leave time to unused (but accrued) paid time off, however, it is not fully clear. If employers are permitted such an option, however, they would then obtain reimbursement from any leave benefits owed from the insurance carrier. Employers can, however, require PFL leave and leave under the FMLA to run concurrently, although employees must be notified of such designation.

The proposed regulations further specify that, if employers have an employee handbook, the PFL must be described in the handbook. However, if no handbook is in place, the employer still must provide written notice to the employee and all employers will be required to post a notice a notice concerning the PFL in a conspicuous location in the workplace.

Failure to comply with the requirements of the PFL and the regulations could lead to hefty fines and penalties. The proposed regulations provide a fine for failure to provide leave of up to .5% of weekly payroll for the period the employer was without coverage and a fine of up to $500 to be paid into the Special Fund for Disability Benefits. Employers that fail to collect contributions and fail to provide coverage will be directly liable to employees for payment of the employee and contributions for the time of violations, and employers that fail to continue health insurance during leave will be directly liable for the employee's medical costs while he/she is on leave. All disputes or claims that fall under the PFL will be subject to arbitration. Although the regulations are not yet final, as a practical matter, employers should begin preparing now for compliance with the PFL by speaking with their insurance providers and their payroll coordinators, reviewing their leave policies and practices and preparing to roll out revised handbooks. Further, since collection from employees may begin as early as July 1, 2017, it will be important to notify employees of this new deduction from their paychecks and the future benefit with which it is associated. Employees should similarly start to familiarize themselves with their rights under the PFL and whether it will apply to them in the future.

For further information, please contact Dean R. Nicyper, Brooke A. Schneider or your Withers contact.


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