New York State Workers’ Compensation Board Proposes Rules for New York Paid Family Leave

On February 22, 2017, the New York State Workers’ Compensation Board (“WCB”) published proposed rules on the New York State Paid Family Leave Benefits Law (the “PFL”), which will require private employers with one or more employees to provide eligible employees with job-protected, paid family leave benefits, fully funded by employee payroll deductions, beginning on January 1, 2018. The proposed rules clarify certain provisions of the PFL and are open for public comment until April 8, 2017.

By way of background, the PFL – a series of amendments to the New York State Workers’ Compensation Law – was enacted last year when Governor Andrew Cuomo signed New York State’s 2016-2017 Budget, and the law is scheduled to take effect on January 1, 2018. At such time, eligible employees will be entitled to take 8 weeks of paid family leave at a rate of 50% of their weekly earnings but not to exceed 50% of the New York State average weekly wage. The PFL will be phased in over the course of 4 years and, once fully implemented on January 1, 2021, covered employees will be eligible to take up to 12 weeks of paid family leave benefits at the lesser of 67% of their weekly earnings or 67% of the New York State average weekly wage.

Similar to the federal Family and Medical Leave Act (“FMLA”), eligible employees under the PFL may take leave for the birth or adoption of a child or the placement of a child for adoption or foster care; to care for a family member with a serious health condition; or for a qualifying exigency arising when a family member is on or is called to active duty in the U.S. armed forces. Notably, however, employees covered by the PFL cannot take paid family leave for the employee’s own serious health condition.

The PFL will apply to private employers that are subject to the New York Workers’ Compensation Law – i.e., employers with one or more employees. Covered employers will have to buy a paid family leave insurance policy (likely through the State Insurance Fund or private carrier from which the employer purchases its disability benefits coverage) or elect to self-insure. The premiums are financed by deductions from employees’ wages, which, according to the proposed rules, employers may begin collecting on July 1, 2017 (although employees cannot use paid family leave until January 1, 2018).

The following are some of the other notable provisions of the proposed regulations on the PFL:

• Full-time employees who have worked at least 26 weeks, and part-time employees – defined as employees scheduled to work fewer than 5 days per week – who have worked at least 175 days in a consecutive 52-week (1 year) period for a covered employer, will be eligible for paid family leave. An employee whose regular work schedule does not meet the eligibility requirements must be given the option to file a waiver of paid family leave benefits, and thus will not have to make contributions to the plan. Employers must keep a copy of the executed waiver on file throughout the term of the employee’s employment to be produced at the request of the Chair of the WCB.

• Eligible employees will be required to provide 30 days’ advance notice to their employer if the qualifying event for taking leave is foreseeable, such as an expected birth or planned medical treatment for a serious health condition of a family member. If the qualifying event is unforeseeable, employees must provide notice as soon as practicable.

• Covered employers must provide employees with written guidance regarding their rights and obligations under the PFL, which includes instructions on how to file a claim. Such notice can be provided in an employee handbook or some other written policy or format. Covered employers will also need to post in the workplace a printed notice in a form prescribed by the Chair of the WCB in plain view where all employees and applicants can readily see it.

• Employees who are provided health insurance by their employers are entitled to continued health insurance coverage during paid family leave on the same terms as if the employee was still working, provided the employee continues to pay his or her share of the health insurance premiums. A covered employee must also be reinstated to his or her position, or a comparable position (with comparable pay, employment benefits and other terms and conditions of employment), with the employer upon return from paid family leave.[1]

• In the event a period of paid family leave is concurrently designated leave under the FMLA, the employer must notify the employee of such designation and provide the employee with the required notice under FMLA regulations. Otherwise, the employer will have been deemed to have allowed the employee to receive paid family leave benefits without having concurrently used his or her benefits under FMLA.

• If an employer gives its employees the option to use other employer-provided paid time off in lieu of paid family leave (and thus receive their full salary during such time off), the employer may file a claim request for reimbursement for any family leave benefits due, or to become due, with the insurance carrier prior to the carrier’s payment of the family leave benefits.

Pursuant to the proposed regulations, claim-related disputes pursuant to the PFL, including eligibility, benefit rates and duration of paid leave, are subject to arbitration. The rules also provide for certain significant penalties for violations of the PFL and non-compliance.

Employers should be on the lookout for the adoption of these proposed rules following the comment period. At this time, employers may begin familiarizing themselves with the PFL and the proposed rules and should consult with employment counsel for review of their policies and practices to ensure compliance prior to the PFL’s January 1, 2018 effective date.

For more information on the topic discussed, contact:

Joel A. Klarreich | 212-508-6747 | jak@thsh.com |: @staffing_lawyer

Andrew W. Singer | 212-508-6723 | singer@thsh.com |: @employer_lawyer

Stacey A. Usiak | 212-702-3158 | usiak@thsh.com |: @law4employers

Jason B. Klimpl | 212-508-7529 | klimpl@thsh.com |: @HR_Attorney

*A special thanks to Andrew Yacyshyn for his contributions