The arrival of the holiday season means that 2020 is just around the corner. In anticipation of the new year, employers should take time to review upcoming changes to the requirements of the New York Paid Family Leave Law (NYPFL or PFL) and ensure compliance with any leave requests that may soon come their way.
For nearly two years now, NYPFL has functioned as a comprehensive paid family leave program affording most New York employees the right to take paid leave for the birth, adoption, or foster placement of a new child, to care for a family member with a serious health condition, or when a family member is away on active military duty. The state reports that, in 2018, more than 8.5 million New Yorkers had access to PFL under the law – 2.2 million of whom were employees not covered by the Family and Medical Leave Act (FMLA).
The PFL program was designed to be fully phased in over four years – meaning that we will continue to see changes to the allotted leave periods, benefit levels, and other components of the statutory scheme through 2021. This post summarizes the key changes that take effect on January 1, 2020.
NYPFL 2020 Overview
- Available Leave Time Will Remain the Same As In 2019
The allotted amount of leave that employees are eligible to take will remain constant this year at ten (10) weeks. Any requests for leave which are submitted between January 1, 2019 and December 31, 2020 will be entitled to 10 weeks if the employee qualifies for NYPFL, even if the qualifying event (such as the birth of a child or the emergence of a family member’s health condition) occurred prior to this period. Remember that, when fully phased in, NYPFL will provide employees with a total of twelve (12) weeks – but the next increase is not scheduled to occur until 2021.
- The Benefit Amount Will Increase Again
In 2020, employees who take NYPFL will receive 60% (increased from 55% in 2019) of the lesser of their average weekly wage or the Statewide Average Weekly Wage. The Statewide Average Weekly Wage is increasing from $1,357.11 (in 2019) to $1,401.17 (in 2020), which means that the maximum required weekly benefit for 2020 is $840.70. The benefit amount will continue to increase in 2021 to the lesser of 67% of the employee’s average weekly wage or the Statewide Average Weekly Wage. The 2021 changes will conclude the law’s phasing-in period.
- The Employee Contribution Rate Will Increase
NYPFL is an insurance program that is funded through employee contributions. Each year, the New York State Department of Financial Services sets the employee contribution rate to match the cost of coverage. Beginning January 1, 2020, the allowable employee contribution rate will increase from 0.153% to 0.270% of an employee’s gross wages each pay period, capped at the Statewide Average Weekly Wage. This change means that an employee’s maximum annual contribution will increase from $107.97 to $196.72 – a more marked change than occurred during the 2018 to 2019 rate transition.
Employees who earn less that the Statewide Average Weekly Wage will make contributions consistent with their actual wages, which may not total the maximum annual contribution. For example, full-time employees earning $1,000/week ($52,000/year) will pay $2.70 per week (0.270% of $1,000).
Employers can start taking deductions from employee paychecks at the new rate on January 1, 2020.
- New Guidance on Leaves Spanning Multiple Calendar Years
The state recently clarified that employees will receive the benefit rate and the amount of leave in effect on the first day of their leave. Therefore, an employee who began a leave in 2019 that carries over into 2020 will only be entitled to the 2019 benefit rate and leave amount (i.e. the 10 weeks of leave and 55% of the average weekly wage applicable in 2019) for the entire duration of that leave.
However, this rule does not hold when an employee takes intermittent leaves spanning multiple calendar years and more than three months pass between days of PFL use, because the employee’s next day or period of PFL is considered a new claim under the law. This means that after a three-month gap between PFL days, an employee using intermittent leave would need to file a new request for PFL and would be eligible for the increased benefits available to them in 2020.
Takeaways and Guidance
In preparation for 2020, employers should:
- Confirm that all team members who administer requests for NYPFL and run payroll are aware of these changes;
- Arrange for employee contribution amounts to be increased to the new rates;
- Consider whether you need to update any written materials such as leave policies and/or handbooks to reflect these changes; and as part of this exercise, consider whether your other leave policies align sufficiently with your PFL policy;
- Consider whether you will send a communication to employees regarding these changes (there is no requirement to do so); and
- Finally, do not hesitate to contact your Mintz employment attorney with any questions regarding this law.
Cheers to a compliant and successful 2020!