Paid Family Leave Law July 1 Deductions

I just wanted to make sure that you are aware of the requirements of the NY Paid Family law, which goes into effect January 1, 2018. The leave is paid for with deductions from employees’ wages, which are remitted to either your private short term disability insurance carrier, or to the state insurance fund.  Although the law does not take effect until January 1, 2018, employees should begin to accumulate enough money in the insurance fund to be able to take paid family leave (PFL) as soon as they are eligible.  The regulations, therefore, permit employers to begin making deductions on July 1, 2017.  
 
The deduction is 0.126% of the employee’s average weekly wage, up to and not to exceed, the statewide average weekly wage, which is $1,305.92.
 
The law, which applies to employers of one employee or more, requires 8 weeks of PFL in 2018, 10 weeks in 2019, and 2020 and 12 weeks in 2021.  Employers are required to obtain insurance through a private company, or through the state insurance company that provides disability benefits and will now also provide paid family leave benefits.  
 
Collective Bargaining Agreements
The only exceptions for this law with respect to employees covered by a collective bargaining agreement are:
 
The regulations provide that an employer who provides paid family leave (as opposed to paid sick leave) benefits under a CBA is relieved from providing PFL if the CBA provides benefits that are at least as favorable as the benefits under PFL.  
 
A CBA may provide rules related to PFL that differ from the requirements in the law.  The revised regulations permit parties to negotiate provisions to the collective bargaining agreement that establish employees’ eligibility for PFL benefits through actual time worked at any employer covered by the CBA, so long as the time period does not extend beyond 26 consecutive work weeks or 175 day thresholds discussed above.
 
Further, a CBA may provide that the union, acting as the employer, may be responsible for all time records and payroll deductions related to the administration of PFL.  Where a CBA does not provide a different rule, the PFL regulations will govern its use.
 
Eligibility
The regulations provide that an employee of a covered employer whose regular employment schedule is 20 or more hours per week will become eligible to take family leave during his or her employment provided that the employee has been employed for at least 26 consecutive work weeks. 
In contrast, an employee of a covered employer whose regular employment schedule is fewer than 20 hours per week will become eligible to take family leave after 175 days of employment.   An employee who does not reach these thresholds may waive family leave benefits; the employer must file the waiver with the insurance and maintain a copy.  The waiver must be express and in writing. 
 
If you have employees who do not meet the threshold and you wish to obtain waivers, please let me know and we will provide you with one once a recommended form has been issued. 
 
PFL and FMLA
An employer covered by the federal Family Medical Leave Act (“FMLA”) that designates a concurrent period of family leave for PFL and FMLA may charge an employee’s accrued paid time off in accordance with the provisions of the FMLA.  From a practical standpoint, this means that most employers with FMLA policies providing for exhaustion of paid leave before taking FMLA on an unpaid basis will not have to revise their FMLA policies.  
 
However, two important caveats follow.  First, only those employers that are covered by the FMLA are permitted to follow FMLA rules on use of accrued but unused time off.  Second, these rules will only apply when an employee taking PFL leave is taking it for an FMLA-qualifying reason and the leaves are running concurrently.
 
PFL and NYC ESTA
The revised regulations do not address how PFL affects the New York City Earned Sick Time Act (“ESTA”), which provides up to 40 hours of sick leave, at full pay, to New York City employees.  Absent further clarification from the Workers Compensation Board, employers covered by ESTA should assume that eligible employees are entitled to any applicable ESTA time as well as PFL, and that such time may not run concurrently.
 
Please let me know if you have any questions.  
 
Aislinn S. McGuire, Esq. 

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