5 Things Every Business Needs to Know about PFL

October 17, 2017

Whether you have 3 employees or 3,000, almost every business in New York needs to be prepared for Paid Family Leave starting January 1st, 2018. To help you get ready for the big day, we’ve put together the five most important things you need to know about PFL, based on common questions we receive.

Before we jump into the specifics, let’s get a few definitions straight. “Covered Employers” is the term used in the DBL/PFL law to describe companies that must provide PFL to their employees if your business:

• has at least one employee (meaning it isn’t just you doing all the work);
• is either located in New York State, or you have employees who work for you in New York State for at least 30 days per calendar year; and
• is a private sector business (not a public school, a municipality, a City of XYZ, etc.)

then you are considered a “Covered Employer.”

For more details on who is considered a Covered Employer, and who is exempt, check out our ABCs of PFL.

And it’s important to know that Paid Family Leave is required by NY State for all private businesses with at least 1 employee. So even if you own your business and you only have 1 part-time employee, you have to provide Paid Family Leave. We’ll get into your employees in a moment.

Now that we’ve got that settled, let’s dive into the important things your business needs to know about Paid Family Leave.

#1. When does PFL start, and what does it cover?
Paid Family Leave officially begins on January 1st, 2018, though you could have started taking contributions from your employees as early as July 1st, 2017. Paid Family Leave rolls out in a series of stages between 2018 and 2021, as you can see from the chart below:

So the important thing to remember right now is that on January 1st, 2018, your eligible employees can take up to 8 weeks of leave time at 50% of their current salary capped at the New York State Average Weekly Wage (NYSAWW).

PFL is designed to help employees take the time they need for certain life events, including bonding with a new child (newborn, adoption, and fostering are covered), caring for a seriously ill family members, and for dealing with qualifying events related to having an active military family member. To learn more about these qualifying events, check out the ABCs of PFL.

On top of giving employees time off for specific reasons and partial-pay, it also protects their jobs. If an employee takes PFL and is out for an extended period of time, their job or one equal to it in pay and benefits must be waiting for them when they return. They are also entitled to receive health insurance at the same level, and same contribution level, they would if they were still working regularly.

To sum up, Paid Family Leave rolls out on 1/1/18, and benefits will be expanded each year through 1/1/21. In 2018, your employees will receive:

• Up to 8 weeks of leave
• Up to 50% of their salary, capped at the NYSAWW
• Job protection
• Regular health insurance (you still pay your contribution as if you were normally employed)

#2. Who do you need to cover?
Paid Family Leave isn’t just for full-time employees. Part-time employees are eligible for PFL benefits as well. There’s certain criteria that all employees must meet before they can take PFL:

• Employees who work less than 20 hours per week are eligible after 175 days of work for the same company.
• Employees who work 20+ hours per week are eligible after they have been employed at least 26 consecutive weeks at the same company.

If you have personal staff working for you (like a nanny, gardener, maid, etc.), and they work at least 40 hours per week, they’re covered too. But right now we’re looking specifically at businesses, so we’ll move on.

When you hire a new employee, they will become eligible to take leave once they meet the above requirements, but you can start taking out pay contributions from their first paycheck. 

Freelancers and contract workers may be eligible for PFL coverage with your company. See who’s not eligible/can’t be covered here.

#3. How do you implement payroll deductions, and when?
If you’ve decided to deduct PFL contributions from employees, now is the time to start preparing.  So, if you haven’t looked into this already, you’ll want to do it now. Since the pay contribution is based on each individual employee’s salary, it could become complex. Talk to your accountant, HR manager, payroll provider, or anyone else who works with your payroll and see if they have something in place already for Paid Family Leave.

If you don’t have someone in-house to handle the new payroll deductions, you might want to look into adding outside services to manage it for you.

When should you start taking payroll deductions for PFL? If you choose to deduct from employees, you have to start taking them on 1/1/18, but you can start earlier. If you decide to wait until the official start date, that’s fine, but you can’t retroactively collect payments for Paid Family Leave.   Plus, it’s important to make sure you deduct the correct amount from your employees.  PFL regulations state that any over collected premium must be returned to the employee.

PFL Expert Tip:  Even if you recoup PFL premiums via PFL contributions from your employees, you’re the one remitting the actual PFL premium to your insurance carrier. 
Want to see about how much PFL will cost your business?  Estimate your PFL premium here! 

#4. What do your employees need to know?
In a word, everything. Not only will your employees need to know who is covered and when, you should also make them aware of everything related to PFL, such as:

• Payroll deductions amounts and reasoning
• Benefits and protections of PFL
• Uses of PFL (bonding, caregiving, military exigencies)
• Eligibility requirements
• Required paperwork

The responsibility for requesting and taking Paid Family Leave falls on the shoulders of your employees. That means that they are responsible for filling out forms, acquiring and providing the appropriate documentation, submitting their paperwork, and requesting time off in a reasonable manner.

Download the PFL Need to Know information for Employees here and share with your employees so they can learn the PFL-basics.

#5. How do you staff while employees are out on PFL?
Eligible employees can take their Paid Family Leave time in increments as small as 1 day or as large as the full eight weeks in 2018. If you have an employee who is taking an extended amount of time off — say to bond with a newborn child, or to support a seriously ill family member — you’ll need to find someone to take their place at work until they are able to return.

Remember, PFL includes job protection, so you can’t necessarily replace your PFL employee unless you have a comparable job available for them when they return. If you have enough time to plan for the absence, like with maternity or paternity leave, then you could consider cross-training another employee to cover while  an employee is out on Paid Family Leave.

In the event that an employee needs to take Paid Family Leave immediately, you might not have time to cross-train with a current employee. Consider reaching out to temp agencies now  to have one on standby so that you can quickly fill the space, especially if it’s a mission-critical position.

 ShelterPoint’s PFL Experts are here to answer any questions you may have. Contact us at pflquestions@shelterpoint.com for more information. 

This blog post is for informational purposes only and is not intended to provide legal counsel. Please consult with an appropriate professional for legal and compliance advice. Any PFL information is as of the blog post’s date stamp; it is based on the applicable statutes and regulation,  and may change as regulations evolve or NY State issues guidance regarding Paid Family Leave regulations. Have more questions? Email us at pflquestions@shelterpoint.com