New York Employers Must Prepare for Paid Family Leave Act
On July 19, 2017, Governor Cuomo announced final regulations implementing New York’s Paid Family Leave Program. The program will provide New Yorkers with job-protected paid leave to care for new children, care for loved ones with a serious health condition or to help when a family member is deployed overseas on active duty.
The regulations outline the responsibilities of employers and insurance carriers in implementing the program. Starting January 1, 2018, Paid Family Leave will provide eligible employees with wage replacement and job protection during qualifying family events. Employees are also entitled to be reinstated to their job when their leave ends and to the continuation of health insurance during their leave. Benefits for 2018 are limited to 8 weeks within a 52-week period and increasing to 12 weeks by 2021.
All private employers with at least one employee (not counting the owner) must secure Paid Family Leave insurance coverage or self-insure in time to provide coverage on January 1, 2018. Paid Family Leave premiums will be funded by employees through payroll deductions. The payroll deduction is based on .126% of an employee’s weekly wage with a maximum deduction of $1.65 per week. Many employers will be faced with paying for insurance coverage on an annual basis in January of 2018. To help employers support the program, payroll deductions can begin in July of 2017 even though coverage does not begin until 2018.New York Employers should consider the impact of the new law and take certain action as soon as possible. Paid Family Leave in New York State is not optional for private employers. Such action includes whether to self-insure or obtain coverage through an insurance carrier; update employee handbooks; revise family leave policies to provide information about the new law; prepare to begin payroll deductions with their payroll provider; and consider how the Family Leave Act will interact with any paid parental leave currently provided.