Starting in 2018 your employees will be eligible for paid family leave to care for family members under New York State’s new family leave law. The law is far-reaching – it applies to every (nongovernmental) employer in New York State with at least one employee. And, the law provides for very generous benefits; when the law is fully implemented in 2021, employees will be able to receive 67% of pay for up to 12 weeks:

 

Year Weeks of Paid Leave Benefit (% of Employee Pay) Cap on Benefits  (% of State Average Weekly Wage)
2018 8 50% 50%
2019 10 55% 55%
2020 10 60% 60%
2021 and later 12 67% 67%

 

These facts represent only the tip of the iceberg – employers need to understand many aspects of the law in order to avoid complaints and penalties. More importantly, New York is only beginning to develop regulations to interpret and administer this benefit. As we have seen with other laws affecting employment, regulatory guidance can create more questions than answers.

This blog post will be the first in a series of updates on the new paid family leave act – as well as other benefits and insurance topics affecting New York employers.

 

What is Covered

Starting January 1, 2018 paid family leave will be available to any full-time employee who has worked for an employer for 26 weeks and to any part-time employee who has worked for 175 days. Leave is available for three specific types of need:

  • Caring for a family member of the employee with a serious health condition;
  • Bonding with a child in the 12-month period following birth or placement for adoption or foster care with the employee;
  • Providing certain categories of support (as defined under the federal Family and Medical Leave Act) for a family member who is has been called up for active military duty.

Paid leave can be taken as a continuous leave or intermittently (in one-day increments) and, while on leave, the employer must continue any employer subsidies for the employee’s health insurance. An employee who returns from leave must be restored to the same (or a comparable) position to that held before the leave and the leave cannot result in the loss of any employment benefit.

Paid leave to care for a family member cannot be taken while an employee is absent for disability, but can be taken immediately after the end of the absence for the employee’s own health; for example, an employee may take time off for maternity leave and can then take paid leave under the new law to bond with the child. Also, the leave to bond with a child can be taken anytime in the first 12-months after the birth or placement of a child; this means that an employee who takes maternity leave in 2017 can take paid family leave under the new law in 2018.

 

Who Pays: Financial and Administrative Costs

The financial cost of the new law will not be a significant burden on employers. Paid leave under the new law will be part of disability insurance coverage and the maximum premium for this additional coverage will be set by the State. Most importantly, employee will pay for the cost of this coverage.

However, the administrative costs of complying will be borne by employers. And, at this point, it is hard to determine what those costs might include; for example, employers will have to pay for:

  • Continuing the employee’s health care subsidy;
  • Retaining replacements for employees on leave;
  • Administering the payroll deduction; and
  • Providing notices to employees about the new law, including changes to employee handbooks;
  • Integrating paid time off under the new law with your existing time-off programs;
  • Completing the employer portion of claims forms; and
  • Providing detailed information to the insurance carrier regarding employees’ use of paid family leave.

The burdens of administering this law may be especially acute for smaller employers – those exempt from federal family leave requirements.

 

What’s Next

The next few months will be a learning process for employers, as new rules are issued and disability carriers roll out resources to administer their programs. Vanner Insurance will provide regular blog posts to help keep you up to date.