As we get closer and closer to January 1, 2018, I have gotten more questions from employers regarding the New York State Paid Family Leave (PFL) coverage. I will briefly summarize a few.
Can I elect to opt out of providing PFL to my employees?
If you’re a “Covered Employer” the short answer is “No.”
Since Paid Family Leave (PFL) is added to the statutory short-term disability benefits law (DBL) as a rider, it applies to any entity currently considered a “Covered Employer” under DBL (typically private-sector organizations with at least one employee who works in New York for at least 30 days in a year). On the flipside, the same exemptions and exclusions apply as for DBL:
DBL-exempt employers are exempt from PFL as well. This means they are exempt altogether from providing coverage to their employees – but they can choose to provide voluntary coverage.
Employee classes excluded from DBL are excluded from PFL as well. Some Covered Employers may have workers who are in excluded classes/occupations. In such cases, all other eligible employees must still be covered under DBL/PFL, while the employer can choose to cover specific classes of excluded employees by applying for voluntary coverage.
In either situation, voluntary coverage is not on the individual level but must be extended to at least an entire class. Confused? Not sure what employers are exempt and what type of employees are excluded? There are two situations where voluntary coverage comes into play. Excluded classes of employees:
Daytime students in an elementary or secondary school who work part-time year round.
Students who are employees in regular attendance during the day in an elementary or secondary school who work part-time during all or any part of the school year or regular vacation periods.
PFL Expert Tip
If the high school student is a full-time employee, he or she is automatically covered under the Covered Employer’s policy.
Can my employees opt out of PFL?
Paid Family Leave is a mandatory benefit for employees who do not fall into an excluded class and work at a Covered Employer, just like DBL. An employee may file a waiver for paid leave benefits if they:
If an employee’s work schedule ceases to fall below this threshold, their PFL waiver is automatically invalid within eight weeks of the change in their work schedule. At that time, you must start counting this employee for premium purposes – and if you are collecting employee contributions for PFL, any employee coming off a waiver will need to start contributing, including any retroactive amounts back to the date of hire or inception of PFL.
You will need to keep the waiver on file for as long as they are working for you – whether the waiver is still in force or not.
One other scenario where an employee may “opt-out” or exempt themselves is if they are receiving, or are eligible to receive, Old Age Social Security benefits. However, in this case the employee would need to opt-out of both DBL and PFL by sending written notice to the Chair of the Worker’s Compensation Board.
PFL Expert Tip
It’s best practice to educate employees who would qualify for the waiver about their options, especially if you withhold PFL premium from employees, and have them confirm in writing even if they don’t want to waive.
In summary, unless your employees meet the very specific criteria above and you are a “Covered Employer,” then they all must participate in Paid Family Leave – even if they’ve already had children or have no living family.
Robert Sherlach is the Hudson Valley Manager for GTM Payroll Services, a national payroll, human resource, and time and attendance management company. He can be reached at R.Sherlach@gtm.com.