On June 1, 2017, the New York (NY) Department of Financial Services (DFS) published a letter titled “Decision on Premium Rate for Family Leave Benefits and Maximum Employee Contribution for Coverage Beginning January 1, 2018.” The letter relates to NY’s paid family leave (PFL) benefit law, which was enacted in 2016 and takes effect Jan. 1, 2018. The law requires employers with one or more employees in NY to provide PFL for eligible employees to bond with a new child, care for a family member or handle personal matters arising from an immediate family member being called to active duty in the armed services. In 2018, employees will receive up to 50 percent of their average weekly wage (up to 50 percent of the statewide average weekly wage (NYSAWW)) for up to 8 weeks. Once fully implemented in 2021, PFL will be 67 percent of average weekly wages for up to 12 weeks.
Employers are not required to contribute anything toward NY PFL benefits. Instead, the benefit is funded via an employee payroll tax — employers will take deductions from employees, which are used to pay premiums. The NY PFL law requires DFS each year to announce the employee contribution amount. According to the June 1, 2017, DFS letter, for coverage beginning Jan. 1, 2018, the contribution amount is 0.126 percent of an employee’s weekly wage or the NYSAWW ($1,305.92 for 2016), whichever is less. Employers should work with payroll providers on setting up proper payroll deductions. Employers may (but are not required to) start payroll deductions from employees on July 1, 2017.
DFS also recently published revisions to its proposed regulations on the PFL law. The revisions make some minor adjustments to certain requirements under the law. For example, the proposed regulations based FT/PT distinction on whether the employee worked 5 days per week or not. But to account for employees with compressed work schedules, the revised regulations state that employees who regularly work less than 20 hours per week may become PFL-eligible on the 175th day of employment, whereas those who work 20 or more hours per week become PFL-eligible on the 26th consecutive work week. In addition, with respect to intermittent leave, the revisions permit employers to require an employee on intermittent paid leave to provide notice as soon as practicable before each day of intermittent leave (previously, employees were required to provide notice one time in advance of the intermittent leave).
To prepare for the new NY PFL law, employers will need to review and refine their leave policies to account for new obligations under the NY PFL, including maintenance of health benefits during a PFL leave and reinstatement to the previously held position (or something similar). To provide actual PFL benefits, employers will need to decide whether they will provide a fully or self-insured disability plan. For fully insured plans, employers should work closely with the carrier to establish appropriate premium rates and related employee contribution amounts. NY employers are required to offer PFL as a rider to existing NY state DBL policies, which can be purchased through a private carrier or through the NY State Insurance Fund. Employers that self-insure will need to work with their actuaries and administrators to develop appropriate disability plan benefits, processes and procedures (including PFL claim processing. Employers will also need to provide information to employees regarding PFL protections in an employee handbook or other written policy (or by providing a notice directly to each employee). The NY Workers’ Compensation Board is also developing a model poster, which employers will be required to post at worksite locations (e.g., break rooms, cafeterias, etc.).
NFP’s Benefits Compliance team recently published a white paper that outlines employer responsibilities and details PFL protections for employees. Please ask your advisor or account management team for a copy.
DFS Letter on 2018 PFL Premium Rates »
DFS Proposed Regulations »
Revised Regulations »