CLIENT UPDATE

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March 10, 2017

New York State Workers’ Compensation Board’s Proposed Rule on the Paid Family Leave Law

On February 22, 2017, the New York State Workers’ Compensation Board published a proposed rule addressing various aspects of the Paid Family Leave Law (“PFLL”).  The PFLL will go into effect on January 1, 2018, and will require private employers to provide paid family leave to eligible employees to be used for specified qualifying events.  For more information regarding the PFLL see our previous alert: http://www.putneylaw.com/cu_040516.html.

The proposed rule explains and clarifies, among other things, employers’ rights and responsibilities, implementation, employee eligibility, and employees’ obligations.  The following are some key points from the proposed rule.

Implementation

Pursuant to the PFLL, private employers must provide paid family leave benefits to their employees through a paid family leave insurance policy or self-insurance.  The premiums for these policies will be funded by employee payroll deductions.  The proposed rule describes a compliance schedule, which explains that employers are permitted, but not required, to collect these weekly employee contributions as early as July 1, 2017, in order to fund benefits for coverage beginning on January 1, 2018.

The proposed rule clarifies that the PFLL will adopt a “rolling backward” method for calculating an employee’s available leave in a 52-week period.  That is, an employee’s leave time would be computed retroactively with respect to each day for which benefits are being claimed.  Employers who use a different method to track leave under the Family and Medical Leave Act (“FMLA”) may face difficulty when they must also track PFLL leave.

The PFLL program will be implemented over a period of four years, beginning on January 1, 2018.  Eligible employees will receive a portion of their weekly earnings during a “qualifying leave period,” subject to a New York state average weekly wage level cap, based on the following schedule:

  • On or after January 1, 2018 at least 50 percent of the employee’s average weekly wage or 50 percent of the state average weekly wage, whichever is less, and 8 weeks’ maximum duration of leave in a 52-week period;
  • On or after January 1, 2019 at least 55 percent of the employee’s average weekly wage or 55 percent of the state average weekly wage, whichever is less, and 10 weeks’ maximum duration of leave in a 52-week period; 
  • On or after January 1, 2020 at least 60 percent of the employee’s average weekly wage or 60 percent of the state average weekly wage, whichever is less, and 10 weeks’ maximum duration of leave in a 52-week period; and
  • On or after January 1 of each succeeding year, at least 67 percent of the employee’s average weekly wage or 67 percent of the state average weekly wage, whichever is less, and 12 weeks’ maximum duration of leave in a 52-week period.

Employee Eligibility

Employees who have been employed by a covered employer full-time for at least 26 consecutive weeks or part-time for at least 175 days are eligible for PFLL benefits.  Employees whose regular work schedule is less than either 26 weeks or 175 days in a consecutive 52-week period will be provided the option to file a waiver exempting them from paying PFLL contributions.  This waiver also exempts the employer from having to provide PFLL benefits to that employee.

Employees’ Obligation to Provide Notice

The proposed rule provides that employees are required to provide to their employers a notice of their intent to take paid family leave.  If an employee is seeking to take paid family leave for a foreseeable qualifying event the employee must provide at least 30 days’ notice.  If 30 days’ notice is not practicable the employee must give notice as soon as it is practicable.

Employers’ Obligation to Provide Notice

The proposed rule specifies that employers must provide to employees written notice of their rights and obligations under the PFLL in the employee handbook, written leave policy, or other written PFLL benefits guidance.

Family Leave Benefits under a Collective Bargaining Agreement

The proposed rule states that employers shall be relieved from providing PFLL benefits to employees who are covered by a collective bargaining agreement (“CBA”), so long as the CBA provides benefits “at least as favorable” as those set forth in the PFLL.  Subject to approval by the Chair of the New York State Workers’ Compensation Board, the CBA may provide rules related to paid family leave that differ from the requirements set forth in the PFLL.  Where the CBA does not provide a different rule, the PFLL rule shall apply to family leave benefits.  Although not made explicitly clear in the rules, it appears that alleged violations of any CBA-provided family leave would be subject to the remedies provided by the CBA (typically, arbitration) rather than the remedies found in the Workers’ Compensation Law.

Benefits While on Leave

The proposed rule states that employees are entitled to continuation of their group health insurance coverage, if provided by the employer, while on paid family leave.  Employees who are on paid family leave are still obligated to make the normal contributions to the cost of health insurance premiums.    

Penalties

Employers who fail to provide PFLL coverage beginning January 1, 2018 will be liable for a fine up to 0.5% of weekly payroll for the period the employer lacked coverage, and an additional sum of up to $500.  Employers who fail to collect employee contributions to provide for paid family leave benefits and fail to provide coverage will be directly liable to each employee for the payment of family leave benefits and must also waive the employees’ contributions for the period(s) where no coverage was provided.    

Disputes

Any claim-related dispute arising under the PFLL will be resolved in a hearing before the Workers’ Compensation Board.

Takeaway for Employers

The proposed rule is open to public comments until April 8, 2017.  This rule, along with possible revisions, may be adopted in the coming months.  We will keep you apprised of developments.  Employers should review family and medical leave policies, disability leave policies, and related paid leave policies to ensure compliance with the Paid Family Leave Law that will become effective on January 1, 2018.  Employers should also coordinate with their payroll department to coordinate appropriate PFLL deductions. 

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If you have any questions regarding New York’s Paid Family Leave Law, please do not hesitate to contact us.