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New York Paid Family Leave Proposed Regulations Filed

The New York State Workers’ Compensation Board is out with proposed regulations providing guidance to employers, insurance carriers and employees regarding their rights and responsibilities under New York’s new Paid Family Leave law, which is scheduled to go into effect January 1, 2018.  Comments on the proposed rules will be accepted for 45 days – until April 8th (although we note that’s a Saturday).  For our earlier post on the enactment of the Paid Family Leave Act, see here.

As a reminder, the Paid Family Leave Act will provide, when fully implemented, employees in the state of New York with up to 12 weeks of paid family leave to (1) care for a family member (including a child, parent, grandparent, grandchild, spouse or domestic partner) with a serious health condition; (2) bond with the employee’s newborn or newly-placed adoptive or foster child during the first 12 months following birth or placement; or (3) address any qualifying exigency relating to a spouse, domestic partner, child or parent who is serving on active military duty.  The law will be funded by employee contributions and, when fully implemented, the employee will be entitled to up to 2/3rds of the state average weekly salary.

Some key provisions of the proposed regulations include:

  • If a covered employer maintains written guidance for employees concerning employee benefits or leave rights (i.e., an employee handbook) information concerning leave under the Paid Family Leave Act and employee obligations under the Act shall be included in the handbook or other written guidance. If the employer does not maintain a handbook, it still must provide notice to the employee about their rights and obligations under this law, including how to file a PFL claim.  There will be a similar posting requirement.
  • Part-time employees are eligible to receive a pro-rata portion of family leave.
  • Employees must provide at least 30 days advance notice before leave if the qualifying event is foreseeable (e.g., an expected birth). When the need for family leave is foreseeable and an employee fails to give 30 days’ advance notice, the self-insured employer or the carrier may file a partial denial of the family leave claim for a period of up to 30 days from the date notice is provided.  When the approximate timing of the qualifying event and need for leave is not foreseeable, employees shall provide notice “as soon as practicable under the facts and circumstances.”
  • A claim for leave taken because of the serious health condition of a family member, the employee must obtain medical certification from a health care provider. A claim for leave taken by a birth mother or other parent must generally be supported by a birth certificate.
  • To request paid family leave, employees will generally be required to complete a Request for Paid family Leave or PFL-1 form that the state will generate and make available. Employers and carriers can use alternative forms as long as they contain all the required information contained in the PFL-1 form.
  • A covered employer who fails to provide paid family leave coverage shall be liable for a fine of up to one-half of a per centum of weekly payroll for the period the employer was without coverage and an additional sum not more than 500 dollars, to be paid into the Special Fund for Disability Benefits.
  • If the employer offers an option to charge all or part of his/her family leave time to unused accruals or other paid time off under an employer-provided leave program, and receive full salary, the employer may request reimbursement with the insurance carrier prior to the carrier’s payment of family leave benefits. The actual reimbursement amount may be computed after family leave is computed.  Where the employee makes this election, he or she still enjoys the full protections of the paid family leave law (i.e. job-protected leave).  This will not however, entitle an employee to utilize more than 12 weeks of paid family leave under the law in any consecutive 52-week period.  This proposed regulation was not entirely clear on whether employers can require employees to utilize PFL and their own leave entitlements concurrently.
  • There are multiple proposed regulations regarding payment of the benefits by direct deposit or payroll card instead of check. We will see how this part of the proposed regulations is impacted by the recent invalidation of the New York State Department of Labor’s updated regulations on direct deposit and payroll cards.
  • Any failure to have paid family leave coverage and make applicable withholdings can expose the employer to costly penalties. The regulations put the employer on the hook for the employee’s health care costs incurred during the period the employer did not continue the employee’s health insurance coverage when they were out on leave.
  • Claim related disputes, including regarding eligibility, benefit rate, and duration of paid leave will be settled via arbitration.

The full text of the Paid Family Leave regulations can be found here.

We will post a more comprehensive of the regulations when they become final.

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Alexander K. Song is a Mintz Associate whose practice focuses on all aspects of executive compensation, including drafting of equity and incentive compensation plans and award agreements. Alex also handles employment, change-in-control, and severance arrangements for executive officers.