And Now For Something Completely Different: The New York State Paid Family Leave Act

By Mark F. Kluger and William H. Healey

After weeks of smut, we turn to the wholesome topic of the New York State Paid Family Leave Act, proving that when necessary, we can do wholesome. And it doesn’t get any more wholesome than paying employees to stay home to be with their families. Mirroring similar laws in New Jersey, California and Rhode Island, the New York statute, which becomes effective on January 1, 2018, provides wage replacement for employees taking family leave and there is a lot to know.

First, the PFLA applies to all private employers in New York State. Curiously, the state legislature exempted state workers from the law. What’s that about? Secondly, almost all employees will be eligible for the benefits. Employees who regularly work 20 or more hours a week become eligible after 26 weeks of employment, while eligibility for those who work fewer than 20 hours a week begins after 175 days of work (it’s just got to be a random number of days that the DOL picked out of the air).

Employees can utilize the paid leave, which includes job and health insurance protection, for bonding with a newborn, foster or adopted child, to care for a seriously ill family member or to support a family member called to active military duty. Bonding leave can be taken at any time within 12 months of the event. The birth mother must submit a birth certificate. The second parent must provide either a birth certificate naming them as a parent, a court order or a Voluntary Acknowledgement of Paternity. For an adoption, a court order finalizing the adoption will do.

A family member for purposes of PFLA is a spouse, domestic partner, child, parent, parent-in-law, grandparent and grandchild. The law makes clear that a serious health condition is one that requires in-patient care or continuing treatment by a doctor and not colds, flu or “minor ulcers.” How did that get in there and how is an employer to know if an ulcer is minor? Strange. Anyway, employees must submit a medical certification from the family member’s doctor to be considered for the leave. An employee seeking to take leave due to the deployment of a family must submit the certification required for such leave under the FMLA.

The amount of leave available and the amount of compensation is as follows:

  • 2018-8 weeks and 50% of employee’s average weekly wages up to 50% of state average
  • 2019-10 weeks and 55% of employees average weekly wages up to 55% of state average
  • 2020-10 weeks and 60% of employees average weekly wages up to 60% of state average
  • 2021-12 weeks and 67% of employees average weekly wages up to 67% of state average

So an employee who earns an average of $1,200 a week would receive $600 a week in the first year. But an employee who earns an average of $1,800 a week would receive $652.96 a week in paid family leave benefits because currently, in 2017, the state average weekly wages are $1,305.92. An employee’s average weekly wages are calculated by adding up the earned wages for the 8 weeks prior to the leave and dividing by, you guessed it, 8.

Employers can allow but not require employees to use vacation and sick time during the leave in order to receive their full wages for a portion of the time off. Those benefits need not continue to accrue during the leave. Employers can require continued payment of employee contributions to health insurance in the same manner as under FMLA.

In case you were worried about who is paying for all this time off, don’t: wage replacement under PFLA is funded by employee payroll deductions. The only opt out of deductions is for employees who will not be working the requisite amount of time to qualify for benefits.  Most employers will use their disability insurance carrier to administer the plan, although self-administration is permitted.

Employers are required by the law to prepare and distribute a policy that describes how PFLA works, including the claim filing process, and must display a poster in a conspicuous location. No big surprise, but the state has not issued the official poster yet. Maybe the state workers responsible are taking their time because they were excluded from participation under the PFLA.

Finally, the PFLA’s interaction with the FMLA is interesting and important to know, seriously. The PFLA’s regulations require employers to affirmatively designate and notify employees when the PFLA leave is running concurrently with FMLA leave. If the employer fails to designate the leaves as running concurrently and notify the employee, the FMLA leave time is deemed not to have run and therefore remains available for the employee to take as additional job protected time off. Similarly, if an employer designates a period of FMLA leave as being covered by PFLA and notifies the employee of that designation, the PFLA time will be deemed to have run concurrently even if the employee chooses not to apply for the PFLA benefits.

Thank you New York legislators for this morass of complex legislation and regulation. We’re sure glad you’re not responsible for fixing the tax code. Smut is so much easier.