In 2016, New York Governor Andrew Cuomo signed the New York Paid Family Leave Benefits Law.
What is Paid Family Leave (PFL)?
PFL is a mandatory employer insurance policy that provides wage replacement for employees that take time off from work to care for an infant or family member with a serious health condition, or to assist with family obligations when a family member is called into active military service.
Employees taking family leave must be restored to their original or comparable position previously held prior to taking the leave. Also, employers must maintain employees’ health benefits while on leave.
When does it start?
Employees may apply for PFL benefits beginning on January 1, 2018. Employers may begin funding through payroll deduction on July 1, 2017.
Which employees are eligible?
Full time employees regularly working 20 or more hours per week are eligible if they are employed for 26 consecutive weeks.
Part time employees that regularly work less than 20 hours per week are eligible on the 175th day of work.
How do I obtain PFL insurance?
PFL will be added as a rider on your existing NYS Disability Insurance policy. Your insurance carrier should contact you this summer with more details. Please contact your insurance agent or insurance carrier if you have specific questions on the policy.
Who pays for PFL?
Employees will pay for the cost of the insurance through payroll deduction beginning with the first payroll on or after July 1, 2017. This deduction will be 0.126% of wages up to a maximum of $1.65 per week.
The benefit is mandatory, but employers may wish to decline the option to deduct the premium from employee wages, making it an employer-paid benefit. The company will be responsible for paying the entire cost of PFL insurance even if there is no deduction from employee wages.
What do I do with funds deducted from employees?
When your disability policy renews in 2018, you will use the funds deducted from employees to offset the cost of the PFL portion of your insurance policy. Please contact your bookkeeper and/or accountant to discuss proper accounting practices for keeping track of these deductions.
What do I need to do now?
- Notify all employees that they will see a new deduction called NY PFL from their paycheck beginning January 1, 2018 (or sooner).
NY is expected to release a mandatory notice that must be posted for employees. Until this notice is published, we recommend that you notify employees of the new deduction and provide them with the following website address so that employees can obtain more information:
- Review any existing paid family leave policies and brush the dust off your employee handbook. You will need to modify your handbook to include the new PFL requirements. CheckWise will provide additional guidance in the near future so that you can consult with your legal counsel prior to rolling out any handbook and policy changes prior to January 1, 2018.
How do you implement payroll deductions, and when?
Call CheckWise Payroll at 518-435-0570 or Contact Us. We are prepared to make it easy for employers. Without these deductions, it is a company paid benefit. Deductions must start on 1/1/2018, but can be started earlier. Deductions cannot retroactively be collected for Paid Family Leave.
Plus, it’s important to make sure you deduct the correct amount. PFL regulations state that any over collected premium must be returned to the employee.
IMPORTANT: Even if employers recoup PFL premiums via employee payroll deductions, the employer is the one remitting the actual PFL premium to their insurance carrier. How much PFL will it cost your business? Estimate your PFL premium here!
For more information on exemptions, visit http://www.wcb.ny.gov/content/main/DisabilityBenefits/Employer/whoCovered.jsp or contact your insurance agent.
Where can I get more information?
What do employees need to know?
The responsibility for requesting and taking Paid Family Leave falls on the shoulders the employee. That means that they are responsible for filling out forms, submitting their paperwork, and requesting time off in a reasonable manner.
Employers should read the PFL Need to Know information for Employees here and share with their employees so they can learn the PFL-basics.
How should I manage staffing while employees are out on PFL?
PFL includes job protection. Eligible employees can take their Paid Family Leave time in increments as small as 1 day or as large as the full eight weeks in 2018.
When the leave is extended, this can cause a hardship on employers. In the event that an employee needs to take Paid Family Leave immediately, temp agencies can be a good option to have a temporary replacement on standby, especially if it’s a mission-critical position.
If there is enough time to plan for the absence, consider cross-training another employee to cover while an employee is out. An employer cannot replace a PFL employee unless there is a comparable job available for them when they return.
We understand that you may still have questions and concerns. Our mission is to make these complex issues as simple as possible! As you know well, CheckWise Payroll is here for the people behind the payroll! So, please feel welcome to give us a call! We are here for you!