NY STATE PAID FAMILY LEAVE – What Employers Should Do Now

Beginning January 1, 2018, New York State’s Paid Family Leave (PFL) program is set to be fully implemented. The program will provide New Yorkers job-protected, paid leave to bond with a new child, care for a loved one with a serious health condition or to help relieve family pressures when someone is called to active military service. While there are some aspects of the law that still need to be finalized, employers should act now to initiate certain initial stages of the law. Here are some things that you, as an employer, should do now to be prepared:
• Contact your insurance provider

While the actual PFL policies have yet to be released to the public, employers should contact their disability insurance provider for more information regarding PFL in conjunction with their existing DBL policy. Make sure to ask questions like: What will be the employer cost of the policy? Is my billing cycle going to change? Will I be billed prior to the effective date of 1/1/18?

• Decide how your employees’ PFL contributions will be funded

While the Paid Family Leave law is frequently referred to as an employee-funded benefit, it doesn’t require you to withhold the contributions from their paychecks. You may choose to fund the PFL premium directly from employer funds.

• Educate and prepare your employees

Even though this law had received a great deal of attention, it is possible your employees are not familiar with the ins and outs of the law. Not only should you educate all your employees about the new PFL benefit and their rights that come along with it, there will be staff members that are exposed to it on a professional level (such as a payroll or HR manager).

Similar to DBL, employers will have to display and keep posted a printed notice concerning PFL. As this will be published by NYS later this year, please refer to our previous publication regarding the PFL program: http://flcpas.com/2017/06/27/new-york-state-paid-family-leave/

• Decide what to do with early employee contributions

Several payroll vendors have started to withhold contributions effective July 1st, which is the earliest date you can withhold employee contributions for PFL. PFL premiums need to be paid together with DBL premiums so, if you pay DBL annually in advance, it may make sense to start withholding employee contributions early from a cash flow perspective. Employers can pay the full benefit upfront and offset the cost with the allowable employee payroll deduction over the course of the year. Collecting PFL premiums early will alleviate some of the upfront financial burden if you pay your bill annually in advance.

If your payroll vendor has started withholding employee contributions but you’d prefer to not start withholding, notify your payroll vendor immediately to stop the early contributions.

• Review your company’s paid time off/leave policies

Do you currently provide paid maternity leave or similar paid leave benefits to your employees? As of 1/1/18 these policies may need to be updated. Review these policies with your HR/legal counsel to determine how PFL impacts them and if changes are needed.
• Create written guidance about PFL

Paid Family Leave must be added to each employer’s written guidelines concerning employee benefits or leave rights, such as in an employee handbook. PFL should be added to the benefits section of the handbook informing employees of all of their rights and obligations under the law, including how to file a claim for paid family leave.

If you do not have an employee manual or handbook, you still have to create written guidance to each of your employees concerning their PFL rights and obligations.

• See if you can expect any of your employees to be out on January 1, 2018

All employees who are currently covered under DBL will be covered under PFL effective 1/1/18. This means they have the right to take the benefit at the implementation date. If it is a foreseeable circumstance, employees are required to provide you with 30 days’ notice. Keep in mind if any of your employees are new parents.

• Look into payroll tracking/administrative solutions

Since the PFL rate is based on employees’ weekly wages, this may add complexity to your current payroll administration. Start inquiring with your bookkeeping software and determine the best way to collect the necessary data going forward.

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