Part II: Tips to Prepare for PFL

In last month’s article, the basic rules for New York’s new Paid Family Leave law (PFL) were outlined. In this article, some of the considerations for implementing PFL are discussed. With legislation this sweeping, it is impossible to describe all of the repercussions, but some of the most important steps to consider are highlighted below.

Look at Existing Policies

Existing Time Off

Most companies provide some time off, including sick leave, vacation leave or paid time off. Some also offer unpaid leave policies, parental leave, or similar benefits. Unless the company is large enough to be subject to the federal Family and Medical Leave Act (FMLA), the employee cannot be required to use existing leave concurrently with PFL. Therefore, now is a good time to look at existing leave policies and consider whether adding up to eight weeks of additional leave for each employee is manageable and, if not, what changes need to be made.

Notice

Both employers and employees have new notice obligations under PFL. Employers have two specific notice obligations: to post the state-prescribed notice prominently and to provide written notice to employees of their rights and responsibilities, either in the employee handbook, or in other written form if there is no handbook.

Employees have obligations that go with exercising the right to PFL. An employee must provide the employer with at least 30 days advance notice before PFL is to begin if the qualifying event is foreseeable. If 30 days advance notice is not practicable for reasons such as a lack of knowledge of when leave will be required to begin, a change in circumstances, or a medical emergency, notice must be given as soon as practicable. However, if the need for PFL is foreseeable and an employee fails to give 30 days advance notice, the carrier may file a partial denial of the family leave claim for a period of up to 30 days from the date notice is provided.

It generally should be practicable for the employee to provide notice of unforeseeable leave within the time prescribed by the employer’s usual and customary notice requirements applicable to such leave. Furthermore, for intermittent leave, the employer may require the employee to provide notice as soon as is practicable before each day of intermittent leave. If an employee does not comply with the employer’s usual notice requirements, PFL may be delayed or denied.

Larger companies subject to FMLA may be more prepared to deal with this new benefit. However, those responsible for managing leaves will need to be trained to recognize when each distinct entitlement of the various applicable leave laws is in play. There are different rules including at what point employees may become eligible for each benefit, how leave can be taken, covered individuals (employees cannot take PFL for their own serious health conditions, and PFL expands the number of eligible family members), leave durations, required forms, calculating the leave year and available sources of income replacement. PFL can only be taken in one-day increments. Partial-day increments are not allowed. Companies subject to FMLA can designate PFL to run concurrently with FMLA leave, permitting the company to apply its FMLA policies requiring the use of available paid time off and FMLA concurrently.

Before PFL leave will count as leave under the FMLA, the employer must notify the employee and provide the employee with the notice required under the FMLA. If an employer does not provide the FMLA notice, the employer cannot charge FMLA leave concurrently. On the other hand, if an employer designates a period of covered FMLA leave for a reason also covered under PFL, informs the employee of their eligibility for PFL benefits and the employee does not apply for payment under PFL, the employer and its insurance carrier may still count the leave against the employee’s maximum duration of PFL in a 52-week period.

Leave it to the insurer

Unless an employer opts to self-insure by October 1, PFL will be added to the employer’s existing New York Statutory short-term disability insurance policy. As an insurance benefit, the employer will not have to pay PFL benefits directly to employees, nor will they have to determine if the employee is eligible. The employee will send claim information directly to the carrier for review. In this way, this benefit is more closely aligned with Workers Comp and Short Term Disability, rather than more traditional paid leave policies.

There is a state form for the employee to make a Request for Paid Family Leave to the insurer. Once an employee requests PFL, the employer or insurance carrier must complete the employer information and return it to the employee within three business days. The employee must submit the request for PFL together with the information supplied by the employer, with any necessary certifications or proof of claim documentation, to the carrier. No benefits are required to be paid until the completed request for paid family leave, together with any necessary certifications or proof of claim documentation, has been submitted.

Once the carrier receives a completed request, the carrier must approve or deny the claim within 18 days. If the request is received more than 18 days before a qualifying event, the carrier must send payment to the employee within five days following the qualifying event. If the request for PFL was unscheduled, payment must be made within 30 days. The carrier may deny the claim because of an incomplete claim package, or insufficient certification or proof of eligibility. If the claim is denied due to an incomplete claim package, the carrier must notify the employee within five business days of each piece of required information that is missing from the employee’s request for paid family leave. If the claim is not refiled within 30 days from when leave was first taken, the claim may be denied.

Conclusion

To prepare for this significant change, plan now. Existing policies will need updating, employees will need to be notified of their new rights and responsibilities, and existing leave policies may no longer fit well with the new requirements. Employers will have their hands full dealing with the increased amount of leave time employees may use. Fortunately, the burden of administrative paperwork and timely decision-making will largely be borne by the insurers who are responsible for administering the benefit. That, however, will be small comfort to the small businesses impacted by this big change.

Jacqueline Kelleher is a partner at the Stafford Owens law firm, she regularly advises businesses regarding employment matters, including policies, legal updates, representation before administrative agencies and personnel management.