Prepare now for NY paid family leave implementation
Effective Jan. 1, 2018, New York employers that provide the Disability Benefits Law coverage to New York-based employees will also be required to provide Paid Family Leave coverage.
PFL aims to provide New Yorkers with job-protected paid leave time to bond with a new child, care for a close relative with a serious health condition or help relieve family pressures when someone is called to active military service.
While other states have these regulations in place, the New York legislation may have a far-reaching impact on businesses — even if the company isn’t headquartered in New York state. That’s because any employer that offers DBL coverage to employees based in New York will have to comply with these new regulations.
There are still many details of New York’s PFL that are yet to be finalized, but it’s important for employers to get smart about these changes ahead of the legislation’s implementation date. Here are four key provisions and implications about New York’s PFL that employers need to know.
1) Gradual implementation. New York’s PFL is designed to be phased in over the next four years, beginning Jan. 1, 2018, with the duration and paid leave time gradually increasing as the program matures. The chart below highlights the proposed increases over the next four years. However, the state could delay these increases depending on the program’s performance.
2) Program eligibility requirements. Most New York employers, or employers that have employees who reside in New York, are subject to PFL, regardless of their company size. It’s important for advisers to clarify for clients that PFL has different employee eligibility rules and employer requirements than the Family and Medical Leave Act. That being said, in many cases, the available leave types overlap, thus allowing PFL and FMLA to work concurrently.
3) Employer requirements. Along with ensuring clients’ benefit plans are updated to be compliant with the new PFL regulations, work with clients’ HR teams to update their employee handbook policies. Once a new employee handbook is complete, clients will need to communicate the updates regarding PFL to their employees.
4) Program funding. A common question many employers can expect to receive is, “How is this program funded?” Help clients proactively communicate that the program is entirely employee-funded through payroll deduction and that the rates for this coverage are deteremined by the state, not the employer. Being transparent and addressing information about the new legislation and how it will impact employees can help mitigate confusion and keep clients compliant.
Even for employers not in New York, it’s still crucial to get up to speed on the state’s PFL program. The trend for providing PFL is increasing in popularity and the more familiar employers are with New York’s legislation, the better equipped they’ll be when new regulations are proposed in their state.