Speaker: New Paid Family Leave Law Can Be Challenging But Employers Can Protect Themselves

Chris Gaetano
Published Date:
Oct 19, 2017

Frank Kerbein, the director of the Center for Human Resources at the Business Council of New York State and a speaker at the Foundation for Accounting Education's Oct. 18 Business and Industry Conference, said that the state's new paid family leave law will be challenging for employers, but there are ways for employers to mitigate the impacts. 

The New York Paid Family Leave (PFL) Program, signed into law in 2016, goes into effect at the beginning of next year. Kerbein said it will be one of the most significant laws in his entire professional career. This is because of its wide-ranging applicability and effects. When the program first begins, employees will qualify for 8 weeks of leave at 50 percent of their average weekly wage or a maximum of 50 percent of the state's average weekly wage, whichever is lower. Kerbein noted that the average weekly wage for New York is $1,305.92. This benefit then increases each year: in 2019 it moves up to 10 weeks of leave at up to 55 percent of the average weekly wage; then, in 2021, the benefit will increase further to 12 weeks of leave at up to 67 percent of the average weekly wage. This measure applies to all private-sector employers with two or more employees. Leave can be taken either all at once or in one-day increments, and is calculated through a look-back method, as opposed to the calendar, anniversary and look-forward methods available through the federal Family and Medical Leave Act (FMLA). The FMLA provides eligible employees with up to 12 weeks of unpaid, job-protected leave a year.

Under the PFL, eligible employees can take leave to participate in providing care, including physical or psychological care, for a family member; to bond with a child during the first 12 months after birth, adoption or foster care placement; or to prepare for a qualified military exigency. Kerbein said that the PFL program is far more expansive than the FMLA. Under the FMLA, a family member means a spouse, child or parent. Under New York's PFL program, though, family can also include grandparents, grandchildren and domestic partners. Children, meanwhile, can mean biological children, adopted children, foster children, legal wards or the children of a covered domestic partner. This range also applies for who is a parent or grandparent or grandchild. Also unlike the FMLA, which says that once children turn 18, they are no longer considered children for the purposes of the law, there is no such limit for New York's PFL program. 

"So essentially every familial relationship is covered. Except siblings. That's weird. They never include siblings. FMLA doesn't either," he said. 

Employees do need to provide advance notice if they're going to go on leave. If it's something foreseeable, like an expected birth or a planned medical treatment, then they need to give 30 days' notice. If they fail to do so, he said there are provisions that allow the employer to shorten their leave period, corresponding to how little notice the worker gave.

But he noted that very few absences are foreseeable. If there's something unexpected, the employee needs to give notice as soon as is practicable, or the same or next business day. 

"So you can have employees who don't show up today, and we don't hear from them and don't know why," he said. 

Kerbein noted that the Business Council of New York State actively lobbied against the measure out of concern that it would hurt small businesses.

"Large employers are much more comfortable with this, but I go to a pizzeria in Albany, and there's a guy with six employees making pizzas, and he doesn't know this is coming. And if Bob misses a few days in a row with him, he's firing Bob. But larger employers will know that we'd need to halt before pulling the trigger, before firing Bob. This is going to be a problem with small employers," he said. 

While clearly unhappy that the measure passed, he noted that employers should be aware of some nuances in order to protect themselves. 

So, for example, situations that are already excluded from workers compensation are already excluded from the PFL, since the program is being administered by the NYS Workers Compensation Board. Also not bound to the PFL program are out-of-state employees (using the same definition used in disability benefits law), public entities (he said the state is explicitly excluded, and municipalities can choose to opt in if they wish), religious institutions, and those with collective bargaining agreements (though the PFL can be included in the agreement if desired). Further, if a worker is employed by two different companies, the benefits do not stack between the two. 

Remote workers qualify if they work in New York, he said. If the company is based in New York but the worker lives in, say, New Jersey and never comes into New York, then the worker is not covered. 

There are further nuances when it comes to when a worker can qualify for the benefits. Those who regularly work 20 hours or more a week are eligible after 26 consecutive weeks. Those who regularly work fewer than 20 hours a week will be eligible after 175 days of employment. He noted that while the categories may seem cut and dried, there can be complications. How does the employer deal with that?

"So first of all, we have some part-time employees who might work more or less. How do we determine what bucket they're in? We have to make a good-faith decision to put them in one of the buckets. ... We as employers get to assign them to a bucket," he said. 

The state does offer waivers for certain situations. If an employee has a regular schedule of more than 20 hours a week but will not be working for 26 consecutive weeks (he used someone hired as a lifeguard for a summer as an example), then the employer can apply for a waiver. 

"What I would do if I were hiring [these] people is: I would say, 'Here's your W4, here's your PFL waiver, fill that out; we want to make sure we don't have to manage your absences. [It also] relieves [the worker] from having to contribute the cost," he said. 

Another way an employer can get a waiver is if someone works fewer than 20 hours a week and will not work 175 days in 52 weeks--for example someone working four hours a day three days a week. While such employees could theoretically keep working to eventually qualify, they could also choose to apply for a waiver and opt out. 

"So I'd do my little lookback assessment now and see who is eligible for PFL, and if I saw I had someone who worked 175 days for me but it's been over two years or 18 months, I'd probably give them a waiver form on Jan. 1. If you don't want to partake in the benefits, you are eligible for the waiver," he said. 

He noted that, in this case, if that person stays with the company long enough to qualify, then the waiver is revoked, but he said that "this is the only time an employer can go back in time and collect past due premiums." 

Waiver forms are available on the Workers Comp Board's website. He said everyone should have them. 

"This is something employers should have, and employers should start getting [waivers for] employees eligible to be waived," he said. 

In fact, he recommended that all affected employers take stock of their workers and see who qualifies, so that they can precisely calculate how much leave their employees are entitled to and how much they're using up if they decide to take advantage of the program. It's important to get this information in order sooner rather than later, he said, because employees will likely hear about this program and just start taking off Jan. 1; he noted that there will probably be commercials on TV informing people of the program. 

The decision as to whether a leave is valid ultimately comes down not to the employer, but to the insurance carrier, which must either approve or deny the claim within 18 days. The employer's obligation is simply to fill out its section of the form, which is then submitted to the insurance company. A denied claim, he said, brings up human resources implications regarding the worker. 

"Bob comes in on Friday saying he needs two weeks off [because his] dad's sick, and it happens to be the start of hunting season. Off he goes. About the same time every year. ... But say two weeks passed and the claim is denied. I think we, as HR people, have some HR stuff to do with Bob. Was he intentionally trying to defraud this insurance company and us?" he said. 

If the claim is approved and the employer still thinks the leave wasn't valid, the employer does have the right to make an appeal before the state workers comp board, though he said that challenges by employees will probably be more common. 

Overall, with this new program in place, Kerbein said that 2018 will be a challenging year for businesses that need to adjust to the new setup, especially smaller ones that may not have the staff available to help them understand all the implications. He said that the Business Council plans to have resources available on its website to help them. 

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