New York’s New Paid Family Leave Law: What Employers Need to Know
The Paid Family Leave (“PFL”) law coming into effect on January 1, 2018 will be employee funded. The PFL benefits will be provided through insurance coverage, included under the employer’s mandatory disability benefits policy. Due to the intricacies of the law, it is important for employers to fully understand and prepare for the new requirements heading into July. While coming into effect in January, employers are eligible to start deducting from payroll beginning in July in order to fund the policy.
Who is eligible?
All full-time and part-time private employees in New York State are not only eligible for the PFL program, their participation is mandatory. A full-time employee must be employed for 26 weeks and a part-time employee must be employed for 175 days to be eligible for paid family leave. It is important to note that this law applies to all employers with at least one eligible employee.
What does the program look like?
The PFL program will phase in over a four year period. In 2018, the maximum benefit length will be 8 weeks, which will increase to 10 for 2019 and 2020, before reaching 12 weeks in 2021. While the number of weeks will increase over time, the maximum benefit length starts on the first day the employee takes leave. Therefore, if an employee takes leave in August of 2018, that employee’s maximum paid time will remain 8 weeks until August of 2019 before aligning to the yearly increases.
The New York State Department of Financial Services announced the 2018 premium rate and the maximum weekly employee contribution. The coverage amount will be 0.126% of an employee’s weekly wage, capped at the statewide average weekly wage of $1,305.92 based on 2016. At the statewide average weekly wage, the maximum deduction equates to $1.65 per week.
What does the program cover?
Under the new program, applicable family members include spouses, domestic partners, children, parents, grandparents, and grandchildren. PFL benefits are applicable to new parents within the first year for child birth, adoption, or foster placement, in addition to caring for an ill family member or if a family member is called to active duty.
The Firm will continue to provide updated information as it is rolled out from Albany regarding the PFL Law. Employers should prepare for PFL billing and determine when the first payment is due in order to determine when they should implement payroll deductions. Visit New York State’s website for further information.