Building a Smarter Workforce. New York Paid Family Leave Act. Brenda JM Sabin, CBP, SPHR, SHRM-SCP, CHRS

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1 Building a Smarter Workforce New York Paid Family Leave Act Brenda JM Sabin, CBP, SPHR, SHRM-SCP, CHRS

2 NY Paid Family Leave What it is Who has to comply How it s paid for Action Items NY Paid Family Leave How it Works 2 Building a Smarter Workforce

3 NY PFL What New York s paid family leave law requires private sector employers to provide paid family leave benefits to eligible employees starting Jan. 1, Final regulations implementing the law were issued on July 19, Phased in over 4 years In 2021 employees could be eligible for up to 12 weeks of paid family leave The paid family leave benefits will be funded through employee paycheck deductions. Employers are not responsible for contributing to or funding paid family leave benefits, but may choose to do so. 3 Building a Smarter Workforce

4 NY PFL - Who NY employers* that provide Disability Benefits Law coverage to NY based employees will also be required to provide Paid Family Leave. Private sector employers are covered by New York s paid family leave law if they have one or more employees employed in New York on each of at least 30 days in any calendar year. *NY employers include any employer who has employees working in the State of NY regardless of where corporate headquarters may be. (Nexus) Employee is entitled to NY PFL benefits if some of their work is performed in NY and the employee is either Based in NY Controlled from NY Lives in NY 4 Building a Smarter Workforce

5 NY PFL EE Eligibility Employees eligibility Must work 20 hours or more per week Worked for their employer for 26 or more consecutive weeks. The final regulations confirm that a part-time employee (an employee who works fewer than 20 hours per week) is eligible for paid family leave after he or she has worked for a covered employer for 175 days. Employees cannot opt out of this benefit UNLESS their job will end prior to the 26 weeks (temp position). 5 Building a Smarter Workforce

6 Reasons for leave Serious Health Condition Child, parent, parent-in-law, grandparent, grandchild, spouse or domestic partner Parent Child Bonding Employee s newborn, or newly placed adoptive or foster child Military Duty Qualifying exigency related to a spouse, domestic partner, child or parent on active military duty 6 Building a Smarter Workforce

7 NY PFL - The amount of paid family leave benefits will be phased in as follows Date Maximum Benefit within 52-week Period Paid Family Leave Benefit Jan. 1, weeks 50 percent of the employee s average weekly wage Jan. 1, weeks 55 percent of the employee s average weekly wage Jan. 1, weeks 60 percent of the employee s average weekly wage Jan. 1, weeks 67 percent of the employee s average weekly wage 52 weeks is measured on a rolling backward calendar. Employee s could be eligible for events that happened in 2017 Example: Employee gave birth on Jan 7 th, 2017 They could be eligible for 6 days of leave beginning Jan 1, Building a Smarter Workforce

8 Funding An employee s paid family leave benefits are also capped at the state average weekly wage at the percentage of the state average weekly wage. Currently that wage is $1, Contribution is 0.126% of employee s weekly wage not to exceed the average. This equates to $1.65 per week (for 2018). This is updated every year on Sept 1 st for the next calendar year. Employee 1 Employee 2 Salary is $67,000 ($1,288 week) When an employee is eligible for paid family leave, there is no waiting period (elimination period) before he or she is eligible to receive paid family leave benefits. Salary is $90,000 ($1,730 week) $1,288 X 0.126% = $1.62 $1,730 X 0.126% = $2.18 Premium = $ % of $1,288 = $644 employee payment Premium = $1.65 (max based on average state weekly wage) 50% of $1,730 = $865 (Over max) Maximum pay = $653 8 Building a Smarter Workforce

9 Current DBL policies New York s Disability Benefits Law (DBL) Currently NY has mandated short term disability benefits. Carriers that comply with NY rules can provide mandated disability policies to employers Carriers are adding NY PFL as a rider to these DBL policies Funding will remain the same as the DBL If DBL is fully insured, the PFL will be fully insured (etc.) 9 Building a Smarter Workforce

10 Taxation Benefits paid to employees will be taxable non-wage income that must be included in federal gross income Benefits should be reported to recipient by the State Insurance Fund on Form 1099-G and by all other payers on Form 1099-MISC Taxes will not automatically be withheld from benefits; employees can request voluntary tax withholding from the carrier (or State Insurance Fund). Premiums will be deducted from employees after-tax wages Employers should report employee contributions on Form W-2 using Box 14 State disability insurance taxes withheld 10 Building a Smarter Workforce

11 DBL and NY PFL Integration An employee who is eligible for both disability benefits and family leave during the same period of 52 consecutive calendar weeks shall not receive more than 26 total weeks of disability and family leave benefits during that period of time. No employee shall receive more than the maximum duration of family leave benefits DBL for employee injury/illness/birth PFL for family members injury/illness; birth or adoption of child Carriers of the DBL insurance (including the State Insurance Fund) will add a rider to the DBL insurance. Start collecting contributions from employees on 1/1/18 (if not done previously) 11 Building a Smarter Workforce

12 What now? Determine if you have an obligation under this law NY employees; DBL insurance Notify employees there will be payroll deductions You do have the option as the employer to fund this totally yourself. Visit these websites for specifics: Laws, Regulations and Decisions Paid Family Leave How it Works NY Paid Family Leave - Employers 12 Building a Smarter Workforce

13 What now? Determine how this will interact with other leave policies, add language to policies about NY PFL Review FMLA policy vs NY PFL Posting requirements (more info coming on that) When should you begin payroll deductions? Review collective bargaining agreements 13 Building a Smarter Workforce

14 Other States NY Paid Family Leave Act 1/1/18 Application for self insured status expired on 09/30/2017 Washington State Paid Sick Leave 1/1/18 Washington State Paid Family Leave 1/1/19 Rhode Island Paid Sick Leave 7/1/18 Massachusetts increased Employer Medical Assistance Contribution rate starting in Jan 2018 ($51-$77) Vermont Paid Sick Leave? it s coming back around get ready House passed going to Senate 6 weeks 60% of wages up to max; employed 12 months, working 30 hrs per week on average No personal injury/illness; payroll tax on employees of.141% (wages X.00141) 14 Building a Smarter Workforce

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16 Thank you! Brenda JM Sabin, CBP, SPHR, SHRM-SCP, CHRS Director of HR Compliance & Payroll Solutions Hickok & Boardman HR Intelligence Burlington VT