New York State Paid Family Leave – What You Need to Know

What is the Law?

On April 4, 2016, Governor Andrew Cuomo signed legislation enacting the NYS Paid Family Leave Act. Effective January 1, 2018, this law will officially go into effect.

The Paid Family Leave Act, or  “PFLA”, will give all employees in New York the right to take a leave of absence in the event of one of three qualifying events. These events are:

-The birth of a child

-Serious Illness of a loved one

-Helping to Alleviate Family Difficulties Caused by Active Military Service

PFLA will be rolled out over a four year period beginning January 1, 2018. Each year the benefit to the employee will escalate:

Year                           Salary Percentage Paid                      Maximum Length of Leave

2018                        50%                                                              8 Weeks

2019                        55%                                                              10 Weeks

2020                        60%                                                              10 Weeks

2021                        67%                                                              12 Weeks

The salary percentage benefit will be capped at a figure of approximately $650 for 2018, which is based upon 50% of the New York State Average Weekly Wage (NYSAWW). This will also change based on fluctuations in the NYSAWW and the escalating salary percentage each year until 2021.

How Does This Affect NYS Employers?

Within this ruling, NYS has set up guidelines in regards to how this benefit will be paid for. PFLA states that this will be paid by employers via their Statutory Disability policies. New York Disability carriers can begin collecting premium for this coverage effective July 1, 2017 in order to build reserves for payment of claims made for this act.

There are a few items employers should be aware of going forward:

-Rates will be set by New York at inception. The rate per employee will be the same no matter carrier, sex, age, size of employer or any other factor.

-Policies will be automatically endorsed to add this coverage

-Claims will still require three signatures to be paid (employer, employee, and a third party dependent upon type of claim)

-Final pricing per person should be announced by the end of June 2017.

-There are some carriers that have decided to leave the disability marketplace to opt out of providing this product. Employers currently insured by one of these carriers will need to replace their coverage.

For more information regarding this law, please speak with an insurance professional or visit New York State’s website:

https://www.ny.gov/new-york-state-paid-family-leave/paid-family-leave-how-it-works

Matt Rowsell