benefits - Horton Management Law

Employee Contributions

The New York Department of Financial Services (DFS) has announced the maximum employee-contribution rate for 2020. It will increase from 0.153% to 0.270% of the employee’s gross wages, up to an annual maximum. This maximum annual contribution will be $196.72 in 2020 compared to $107.07 in 2019.

The contribution rate increased from 0.126% to 0.153% in 2019. That changed the maximum annual contribution from $85.56 to $107.97.

Overall, the maximum annual contribution has increased by 130% in just 2 years.

This means an additional annual cost of up to $111.16 for many employees from 2018 to 2020. And additional increases are likely each year.

2020 Paid Family Leave Benefits

But it’s not all bad news for workers. DFS also confirmed that the weekly paid family leave benefit will increase again in 2020. The weekly benefit rate increases from 55% of the employee’s average weekly wage to 60%. This percentage only applies up to the first $1,401.17 of weekly earnings. An employee who earns more than that can only receive $840.70 per week in paid family leave benefits.

The maximum leave allowance remains 10 weeks as in 2019.

Future Paid Family Leave Rates

Expect the contribution and benefit rates to change again.

Under the original schedule, maximum weekly benefits will increase to 67% of the average weekly wage in 2021. The NYS Superintendent of Financial Services could delay these increases, but did not do so for 2020.

The maximum leave allowance will increase to 12 weeks per year beginning in 2021.

What Must Employers Do?

Companies should confirm their 2020 paid family leave premiums with their insurance carriers. Then make sure that next year’s payroll will include the correct contribution rates.

If your paid family leave policy reflected specific rates for paid family leave in 2019, then you might need to change those.

This is also an excellent opportunity for employers to review which employees are eligible to opt out of the paid family leave program. Employers must offer qualifying employees the chance to waive coverage (and corresponding paycheck deductions). However, the waiver automatically expires if the employee later becomes eligible for paid family leave.

Finally, employers might find that these changes increase the utilization of paid family leave in 2020. On one hand, the benefit is higher, making it more financially viable for employees to take time off from work. On the other hand, since employees have to pay more for the program in the first place, they might feel even more entitled to use it. These factors might require employers to replace more worker hours next year or otherwise allow for lost productivity.

The New York Paid Family Leave Benefits Law takes effect January 1, 2018. Eligible employees will be able to take leave under qualifying circumstances.

This post discusses what leave benefits are available to employees who take leave under the New York Paid Family Leave Program.

(For more information about this topic, click here to watch a free webinar!)

How Much Pay Do Employees Receive?

The amount of leave and pay available increases over the next few years. It starts at 8 weeks and a maximum of 50% of the New York State average weekly wage in 2018.

It increases each subsequent year until reaching 12 weeks and 67% of the New York State average weekly wage in 2021.

The following chart shows the number of weeks and percentage of weekly wage available each year.

Year	Weeks Available	Max % of Employee Average Weekly Wage	Capped at % of New York State Average Weekly Wage
2018	8	50%	50%
2019	10	55%	55%
2020	10	60%	60%
2021	12	67%	67%

The 2017 New York State Average Weekly Wage is $1,305.92. With a 50% cap for 2018, the initial maximum paid family leave benefit will be $652.96.

Employees’ maximum paid family leave benefits may be limited by prior receipt of short term disability benefits. The maximum combined benefit period for New York paid family leave and short term disability benefits is 26 weeks in any consecutive 52-week period. Thus, for example, if an employee has already received 20 weeks of disability benefits in the past year, they would only be eligible for up to 6 weeks of paid family leave.

Health Insurance Continuation

Group health insurance benefits provided to an employee before taking paid family leave must be maintained during paid family leave.

The employee remains responsible for any health insurance premium contributions during the paid family leave.

Job Reinstatement

Covered employees who take paid family leave have the right to return to work at the end of the leave. The employee may be restored to either: the position the employee held when the leave began, or a comparable position with comparable employment benefits, pay, and other terms and conditions of employment.

If the employer refuses to reinstate the employee, the employee can file a request for compliance. If the employer does not then reinstate the employee to his/her satisfaction, the employee can file a complaint a complaint with the Workers’ Compensation Board (WCB).

In evaluating an employee’s complaint of failure to reinstate, the WCB “may consider whether the employer’s actions are related to the taking of family leave or if the employer’s actions would have affected the employee if he or she was not on family leave.” For example, if the employee would have been laid off anyway for economic reasons.

Other employer defenses include that the employee was not eligible for paid family leave in the first place, or that the employee falsified their claim for benefits.

Other Paid Family Leave Benefits

The taking of family leave also may not result in the loss of any employment benefit accrued before the leave began.

Additionally, the law generally protects employees from discrimination or retaliation for taking paid family leave. However, it does not entitle any restored employee to the accrual of any seniority or employment benefits during any period of leave, or any right, benefit or position to which the employee would have been entitled had the employee not taken the leave.

Learn More About the Paid Family Leave Benefits Law

Employers will need to know more than which employees are eligible, when they can take paid family leave, and what benefits they receive. They also need to know, for example, what notices employers and employees must give. Stay tuned for more posts about the New York Paid Family Leave Benefits Program.

Remember, I am conducting webinars to assist employers with New York Paid Family Leave.

Find out about the free webinars here!

Tag: benefits

Paid Family Leave in 2020