NY Sets Maximum Employee Contribution for Paid Family Leave
June 6, 2017
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Governor Cuomo Signs $15 Minimum Wage Plan and 12 Week Paid Family Leave Policy into Law
June 7, 2017
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Update on NY’s Paid Family Leave

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Update on NY's Paid Family Leave

Paid Family Leave Premium Rate

We received this email from Jaeger & Flynn Association Inc., and thought that we should share it!

On June 1, 2017, the Department of Financial Services announced the rate for the Family Leave Benefit product. The Superintendent of Financial Services set the maximum employee contribution at 0.126% of an employee's weekly wage, up to, and not to exceed, 0.126% of the state-wide average weekly wage (SAWW). The SAWW, which was set by the New York State Department of Labor on March 31, 2017, is currently $1,305.92. So, for example, if an employee's weekly wage amounts to $1,000, the maximum payroll deduction for PFL would be $1.26 for that week. For employees making more than the SAWW of $1,305.92, the PFL deduction will be capped at $1.65 per week (0.126% of $1,305.92). As a reminder, the SAWW is calculated annually on March 31st based on the previous calendar year, so the maximum PFL employee contribution will likely increase in March 2018.

Proposed Regulations

Revised proposed regulations for Paid Family Leave were issued on May 24, 2017, by the New York Workers' Compensation Board. With the newly proposed regulations, the Board provided a detailed assessment to the comments and responses from the initial posting. The release of the new proposed regulations opens a new 30-day comment period, which will expire on June 23, 2017. We will continue to update you as we learn more about the regulations and their effective date.

State law plays a very important role in how employers should determine their vacation policies. State laws addressing vacation typically fall into three categories: those that prohibit any forfeiture of vacation time; those that are silent on the subject (typically interpreted to allow forfeiture of earned time); and those that fall somewhere in between. New York State law provides that employers are not required to pay earned vacation upon separation if they have language in their policies notifying employees they forfeit earned vacation pay upon their termination of employment (employers in New York are also not required to pay employee for sick leave upon separation of employment). Therefore, in New York, an employer can have policies that allow for a "use it or lose it" policy.

States like New York, North Carolina, and Ohio treat vacation time as wages by default, however, employers in these states are also permitted to draft policies to the contrary. As long as the employer's policy clearly sets forth that, for example, earned but unused vacation will not be paid out at termination or will not roll over from year to year, then the employer's policy will take control regarding treatment of such time.

As with any policy, the key is to be unequivocal in your drafting. If you want to pay out earned vacation to employees on discharge, just say so. If not, the courts will almost always interpret policies in the manner most favorable to the employee - so if there is any unclear messaging, it will likely work against the employer. In addition, when employees know they will receive compensation for any accrued vacation when and if they leave a company, workers may already have one foot out the door and have less incentive to stick around longer than necessary just to use up their vacation.

While drafting your policy and putting its terms into practice, you should be aware of the precedent you set and the expectations that are created.

This article is copy written to Jaeger & Flynn Association Inc.