Focus on what counts
News

Family Matters: New York Has Taken a Stance

September 7, 2017

Sally Maybruch
Lorraine Valle

view all archive
New York has enacted a Paid Family Leave (PFL) Benefits Law, said by the NYS Department of Financial Services to be the most comprehensive paid family leave program in the U.S. All private employers subject to New York worker’s compensation law must provide benefit coverage for eligible employees, defined as those who have worked at least 20 hours per week for a minimum of 26 weeks.

Beginning on January 1, 2018, eligible employees will have the ability to take time off and receive a portion of their income to:
  • Care for a family member with a serious health condition;
  • Bond with a child during the 12 months following birth, adoption, or start of fostering; or
  • Address issues arising from a family member’s active military service.
In 2018, eligible employees will receive half of their average weekly wage, capped at half of the statewide average weekly wage, for up to eight weeks of leave. It is estimated that the maximum 2018 weekly benefit will be $648. When the program is fully phased in, by the year 2021, the maximum benefit will be two thirds of the employee’s average weekly wage, capped at two thirds of the statewide average weekly wage, for up to 12 weeks of leave.

WHAT ARE THE RESPONSIBILITIES FOR THE EMPLOYER?
Private employers should prepare to obtain coverage through an insurance carrier beginning January 1, 2018. It will generally be included under an employer’s existing disability benefits policy. Employers should contact their disability insurance carrier if they have not been notified already.
 
Paid Family Leave coverage can be funded by employee payroll contributions, which were allowed to be collected as of July 1, 2017, or employers may cover the cost themselves. The premium rate for Paid Family Leave benefits, as well as the maximum employee contribution for coverage, is reset annually. Beginning January 1, 2018, the maximum withholding for 2018 will be $1.65 per week. If a payroll service is used, employers must confirm that the payroll company is compliant with regards to withholding for both full- and part–time employees.
 
Employers must allow an employee to return to the same or a comparable job. Failure to reinstate employees can expose employers to claims. Employers must continue employees’ health insurance while on Paid Family Leave, but may require that employees continue to pay their premium contributions. Employers must ensure that their organizational policies and related policy manuals comply with the new law, including publicly displaying an informational poster for employees. Discrimination or retaliation against employees who take or ask about Paid Family Leave will not be tolerated. Failure to comply with withholding or benefit rules can result in substantial penalties.

WHAT ARE THE CONSIDERATIONS FOR THE EMPLOYER?
Paid Family Leave Policy applies to employees who work in New York, regardless of where the employer is based or where the employee lives. If an employee works in New York for more than 30 days in a calendar year, it is the responsibility of the employer to obtain Paid Family Leave Coverage. It is therefore very important for employers, especially those not based in New York, to maintain awareness of the locations of remote employees in order to remain in compliance.
 
For employers currently exempt from the federal Family and Medical Leave Act (FMLA), PFL provides new challenges and considerations that may not have been present before. For employers currently adhering to FMLA, the addition of PFL and the coordination between the two policies requires special attention. While there are similarities between the two policies (job protection and continuation of health insurance while on leave), there are also marked differences, including the potential reason for the leave. For example, PFL does not apply to an employee’s own health issue, while FMLA does. Employers will need to ensure that their policies for administering leave are current and accurate.
 
While the new policy provides tremendous peace of mind for employees, it can be anxiety provoking for employers. What will happen to you and your business if a key employee is out for 8 – 12 weeks? For small business owners, this thought may cause even more alarm. Planning for business continuity is critical and having strong, creative, business-minded consultants on your team can help structure a unique plan that works for both your industry and your specific business. At Citrin Cooperman, we understand that you and your business need a strategy that is tailored to you, rather than making you work within the constraints of a predefined plan.
 
Paid Family Leave allows employees to focus on personally significant events while still being guaranteed wage replacement, job protection, and continuation of health insurance. The professionals at Citrin Cooperman work with you and for you, so that you can focus on what counts – your business. 

For more information on New York State’s Paid Family Leave, contact a member of your Citrin Cooperman team or visit https://www.ny.gov/programs/new-york-state-paid-family-leave.

ABOUT THE AUTHORS
Sally Maybruch, CPA, is a manager in Citrin Cooperman’s Norwalk office and can be reached at 203.847.4068 or at smaybruch@citrincooperman.com.  Lorraine Valle is a manager in Citrin Cooperman’s New York City office and can be reached at 914.693.7000 or at lvalle@citrincooperman.com