Partner Dan Sarzynski, Chapter Attorney for Subcontractors Association of WNY and associate Geff Gismondi,explain the broad impact the new Paid Family Leave Act (PFLA) will have on employers. Are you prepared?
THE NEW PAID FAMILY LEAVE ACT WILL HAVE BROAD IMPACT ON NEW YORK STATE EMPLOYERS
New York’s groundbreaking new law – the Paid Family Leave Act – is receiving support from a number of groups, but employers must be prepared to deal with the sweeping changes that the law imposes on them. Significantly, it is the employers that are responsible for administering the new program – regardless of the size of the company. With a full understanding of the substantial effects that the new law will have on companies, and with proper planning, businesses will be best prepared to manage their workforce, while maintaining efficiency.
Effective January 1, 2018, Paid Family Leave (“PFL”) is now mandatory for private companies with employees in New York State. The program provides wage replacement and job security to employees who need to take leave for a qualifying reason, such as:
- bonding with a child,
- caring for a close relative with a serious health condition, or
- helping relieve family pressures when someone is called to active military service.
First and foremost, private companies must be aware that the program is not optional, and it applies to all employees working in New York, whether salaried, full-time, or part-time. Employers must apply specific eligibility guidelines to determine if and when their employees are eligible for leave. In addition, special rules apply to out-of-state employers as well as domestic businesses with employees out of state. The state may impose monetary penalties on companies without proper coverage in place, which means that it is crucial to be aware of how the law specifically applies to your business.
Employers must also be mindful that, without proper planning, the program could cause unintended disruption to the workforce and the company’s operations. This underscores the importance of not only educating management personnel and employees of their rights and obligations under the new law, but taking necessary steps to manage the foreseeable impacts of the program. Companies should be prepared to modify their internal policies or adopt new policies and procedures consistent with the law, but which are tailored to ensure that company operations remain efficient. Requesting that employees provide advance notice of foreseeable time off, requesting communication of an employee’s expected return date, and having policies in place to provide interim support in the event key personnel are temporarily on leave are just three ways that companies can begin to prepare themselves for the changes that the law will bring. The law gives employers leeway to impose company-specific policies for benefits that may overlap with PFL benefits, such as paid-time-off, Family and Medical Leave, or sick days.
Depending on the size of the company and its workforce, some employers may need to seek advice about whether to fully insure or self-insure for PFL benefits. Self-insured employers are subject to additional filing and reporting requirements under the new law.
Becoming educated about the scope and effect of the law, implementing policies to help ensure an uninterrupted workforce, and having support in place to properly administer the program will afford employers and employees the opportunity to focus on what is most important – the day-to-day functioning of the
