As many New York employers are already aware, last year New York State enacted a comprehensive paid family leave law. The New York Paid Family Leave Act (NYPFLA) will go into effect on January 1, 2018. As of that date, employees in New York will be eligible for wage replacement during leaves of absence taken to bond with a new child, to care for a close relative with a serious health condition, or to handle certain situations arising from a family member’s call to active military duty.
While January 1, 2018 may still seem like a long way off, employers should take full advantage of the time remaining to prepare for compliance. To assist in this preparation, we have collected our responses to the most frequently asked questions we have received from clients regarding the NYPFLA.
Which employers are covered under the law?
The NYPFLA’s requirements will apply to all employers with one or more employees in New York State.
Which employees are eligible to take paid leave?
Any full-time employee (who must work 20 or more hours each week) who has been on the job for 26 consecutive weeks is eligible. Part-time employees become eligible for leave on their 175th day of work.
For what purposes can an employee use paid leave?
Employees may use the leave as maternity/paternity leave – i.e., to bond with the employee’s child during the first twelve months after the child’s birth or the first twelve months after the placement of a child for adoption or foster care with the employee. The leave can also be used to participate in providing care, including physical or psychological care, for a family member of the employee due to a serious health condition of the family member. Family member is the employee’s spouse, domestic partner, child, parent, parent-in-law, grandparent, or grandchild. In addition, the leave can be used because of any qualifying exigency arising out of the fact that the family member is on active military duty (or has been notified of any impending call or order to active duty).
How much leave is an eligible employee entitled to?
Starting January 1, 2018, employees will be permitted up to eight weeks of leave. Starting January 1, 2019, that amount will increase to 10 weeks, and as of January 1, 2020, it will increase to 12 weeks.
Do employees receive their full salaries during a leave?
No, employees are entitled only to partial wage replacement, the amount of which will increase over a period of several years after the law’s effective date. On January 1, 2018, employees on leave will be entitled to wage replacement equal to 50 percent of their weekly wage if that is less than 50 percent of the state average weekly wage; otherwise the employee will receive 50% of that state weekly wage. That percentage will increase annually for three years as follows: 55 percent in 2019, 60 percent in 2020, and 67 percent in 2021.
On June 1, 2017, the New York State Superintendent of Financial Services published the maximum employee contribution amount. It is 0.126% of an employee’s weekly wage up to and not to exceed the statewide average weekly wage.
The NY State average weekly wage for 2016 is $1,305.92.
The maximum employee contribution amount is the lesser of:
0.126% x $1,305.92 = $1.65 per weekly paycheck, OR
.0126% x the employee’s weekly paycheck
By way of illustration:
In 2018, an employee who makes $1,000.00 per week would receive a benefit of $500.00 per week. However another employee who earns $2,000.00 per week would receive a benefit of $648.00 because this employee is capped at one-half of the New York State average weekly wage. The “average weekly wage” is set every year by the DOL.
Are employers expected to pay for this paid leave?
No. Employers will not be required to pay wage replacement to employees on leave out of their own pockets. Rather, the payments will be funded via small paycheck deductions from the wages of all New York workers.
How is the NYPFLA different from the Family and Medical Leave Act (FMLA)?
The most obvious difference is that leave under the NYPFLA is paid, while FMLA leave is unpaid. But there are numerous other differences, including the following examples: NYPLA applies to all New York employers, even those not covered under FMLA due to having fewer than 50 employees within 75 miles of a work site. FMLA provides twelve weeks of leave, while NYPFLA will not provide twelve weeks until January 2021. FMLA leave applies to an employee’s own health condition, but NYPFLA does not. Of course, these are only a few of the many differences between the two laws. Generally speaking, employers should be aware that the two laws are not interchangeable, and what applies under one may not be applicable under the other.
What should employers do now?
Effective July 1, 2017 employers can start to take the payroll deductions, however, this is not mandatory. As of this date, the final regulations have not been issued. As the NYPFLA will be a rider to the employer’s New York State Disability Insurance policy, you can contact your DBL carrier to determine when the first premium that includes the NYPFLA will be due in 2018.
In the meantime, make sure your payroll service is ready to take the proper deductions from employee paychecks.
As New York employers gear up to comply with the NYPFLA by January 1, 2018, PMP is here to answer any questions you may have about the new law. Contact us at 800-921-2195 or 516-921-3400. You can also visit our website http://www.pmphr.com/ or e-mail us at info@pmpHR.com.
This article is intended for general information only and should not be construed as legal advice.