Need-to-Know PFL Info for Brokers

Paid Family Leave is very much intertwined with DBL – as well as The Family Medical Leave Act (FMLA) for groups of 50+ employees. Since PFL is closer to the health side of the insurance spectrum, it may come more naturally to benefit brokers who are usually familiar with similar programs, like FMLA. However, since PFL becomes part of the mandatory DBL policy, which can be written by any NY insurance licensee, P&C brokers will have to navigate this uncharted territory. Whichever side of the spectrum you’re on, we have 2 in-depth comparisons for both: PFL-DBL and PFL-FMLA allowing you to study up on some of the nitty-gritty details we can’t fit on this page.

One thing that doesn’t need much studying is the Paid Family Leave rate:

There is no fixed rate as the PFL cost is based on an employee’s salary. The 2018* maximum weekly contribution for Paid Family Leave is 0.126% of an employee’s weekly wage capped at current NYSAWW of $1,305.92 = 67,907.84 per year**.

This translates into a 2018 maximum contribution of $1.65/week (averaged over the year) for employees earning NYSAWW or above.

Since PFL is a rider to DBL, the premium will be billed together – and will need to be paid together. Your clients must pay the premium for their entire group whether they withhold from employees or not. Employers that take contributions from employees,

  • can start payroll deductions as early as July 1, 2017 (this may reduce cash-flow constraints especially for those of your clients billed annually in advance)
  • but they cannot take deductions retro-actively or collect more than the allowable maximum contribution for Paid Family Leave.

While employers can choose to collect DBL and PFL employee contributions from an employee who is out on DBL or PFL, they cannot collect Paid Family Leave contributions for an employee who is not yet eligible for PFL while that employee is out on DBL.

*The rate is set by NY State and can be adjusted on an annual basis effective January 1. The 2018 rate had to be set by June 1, 2017. Thereafter, updated rates are set and announced by NY State by September 1 of each year for the following calendar year.
**NY Department of Labor releases the updated NYSAWW every March 31.


How PFL impacts Businesses

Here are the top 10 things to keep your clients aware of and help them stay compliant:

  1. Since the Paid Family Leave rate is based on each employee’s wage/salary, this may add to the complexity of your clients’ current payroll tracking/administration, especially when filling out the DBL/PFL bill.
    PFL Expert Tip: You may take this as an opportunity to help them find solutions to reduce the added burden.

  2. Paid Family Leave benefits phase in over 4 years with gradually increasing benefit amount and duration, so you will need to stay on top of annual changes to the maximum benefits.

  3. Your clients must add PFL to their written guidance for employees concerning employee benefits or leave rights, such as in an employee handbook.
    PFL Expert Tip:  Even if an employer doesn’t have written manuals, it will have to create written guidance on PFL, including information on how to file a claim for paid family leave. Let your clients know about this easily overlooked compliance requirement!

  4. Just like with DBL, employers will have to display and keep posted a printed notice concerning PFL as published by NY State later this year.

  5. All employees who are currently covered under DBL will be covered under (and thereby have the right to take) Paid Family Leave effective 01/01/2018. This means, some employees could be out as early as the very first day of next year!

  6. Paid Family Leave provides job security for employees out on paid leave, similar to unpaid leave under FMLA, but regardless of the size of the employer.

  7. If a client of yours declines to reinstate an employee returning from PFL, the employee may report that employer to NY State. They then have 30 days to either take corrective action or file a formal response to the employee.

  8. Employees will need to give 30 days’ notice for foreseeable leave. This means, your clients could start receiving notices by 12/01 of this year.

  9. Since paid leave can be taken in daily increments/intermittent intervals (such as every other Monday), absence management may become more complex. This may be overwhelming for employers who are not subject to FMLA, as FMLA already requires granular absence management capabilities. 
    PFL Expert Tip: You may take this as an opportunity to help them look into solutions to keep track of intermittent leave efficiently. 

  10. Your clients cannot require employees to exhaust their accumulated PTO before letting them go out on paid family leave.

What Happens If Employers Don’t Comply with Paid Family Leave?

Fines for non-compliant businesses will be based on the amount of the employer’s payroll during the time the employer did not have required coverage (0.5% of payroll during that period). An additional fine for each period of noncompliance may also be imposed, and employers may also be subject to additional monetary fines and/or imprisonment for up to one year.


How PFL impacts Employees

PFL changes also affect all eligible employees:

  • While DBL defines full-time employees as “persons working the amount of hours that constitute the specific employer’s normal work week,” full-time employees are defined as “persons working 20+ hours per week” under Paid Family Leave.

  • To be eligible for Paid Family Leave benefits,

    • “Full-time” employees must have been employed at least 26 consecutive weeks at their current employer

    • “Part-time” employees must have completed at least 175 work days at their current employer.

    • If an employee changes jobs, their time worked at the previous employer does not count.

    • Time out on DBL does not count towards the qualification period.

  • For foreseeable events (such as birth or scheduled treatments/therapy), Employees should provide employers with a 30-day notice of intent before using Paid Family Leave benefits. If they are not able to provide this notice due to the sudden nature of the qualifying event (such as a family member’s stroke, emergency delivery, or short-notice deployment), they are still entitled to the leave but have to notify the employer as soon as reasonably practicable (typically within 2 days)

  • Employees may have the option to use accrued vacation during Paid Family Leave, thereby receiving their full salary as opposed to the percentage provided for by PFL. However, if they do this,

    • employees will not be able to collect both PTO (such as vacation pay) and monetary Paid Family Leave benefits simultaneously.

    • In this case, PFL only provides the job protection aspect. 

  • For groups of 50+ lives (which thereby are subject to FMLA), Paid Family Leave benefits must be coordinated and used concurrently with Family Medical Leave Act (FMLA) benefits.


More Details Still to Come

Of the world’s 185 developed countries, the United States stands alone as the only industrialized nation that doesn’t provide some form of paid family leave for its citizens.

New York’s Governor Andrew Cuomo signed Paid Family Leave legislation that passed in 2016. This makes New York one of few states (following California, New Jersey, and Rhode Island) to pass Paid Family Leave legislation.

With regulations released by the State of New York, insurance carriers, employers, and brokers all need to gear up and implement Paid Family Leave capabilities before the phase-in of PFL begins in January 2018. 

We’re ready – are you ready?


Come back frequently to stay in the know as we release more details on Paid Family Leave administration in the next weeks and months to come.

Visit our blog for the most current updates

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Latest Resources

How To Calculate PFL Benefits in 2018

Stephanie Haber 0 2037 Article rating: No rating

PFL family
January 16, 2018 – Knowing how much time an employee can take with Paid Family Leave can seem tricky.  But now that Paid Family Leave is officially live in New York, employees are trying to figure out just how much...


ShelterPoint & PFL

After Paid Family Leave (PFL) was announced in 2016, ShelterPoint created a dedicated PFL team. Their goal? Ensure a successful transition to the PFL program for everyone involved — from policyholders to claimants to brokers. ShelterPoint is committed to being the timely, accurate resource for all PFL-related questions and information as the legislation continues to unfold. As the industry leader in DBL, ShelterPoint is ready to become the industry leader for PFL as well.


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