NYS Paid Family Leave Overview “What We Know Today…” December 13, 2017 Katrina M. Papa, GBDS Sr. Claims Specialist Hope DeRocha, PHR, SHRM-CP Director of HR Consulting Services

Paid Family Leave Basics Please note that NYS Paid Family Leave is a very fluid process. The regulations and interpretations of the regulations change on a daily basis. Effective January 1, 2018 Provides paid, job protected leave for bonding, care of a family member or military qualifying event Rider to current NYS Disability insurance policy Administered by Workers’ Compensation Board Incorporates parts of WCB, Disability and FMLA Benefits are funded by employee payroll deductions; no direct funding by employers is required (employers do have the option to fund)

Reasons for PFL Leave Care for Family Member: Bond with Child: When paid leave is necessary to provide care, including physical or psychological care, to their family members due to a family member’s serious health condition; Bond with Child: To bond with their newborn children during the first year of the child’s life, or, in the case of adoption or foster care placement, for the first year after the placement of a child with the employee; and Military Qualifying Event: For any qualifying reason as provided for under the FMLA arising from the employees’ spouse, domestic partner, child, or parent being on active military duty, or, alternatively, being notified of an impending call or order to active military duty.

Summary of Benefits Benefits will be phased in starting in January 2018 and will be fully implemented in 2021: * Department of Financial Services has the discretion to delay increases in benefits for 2019 and beyond, depending on the cost, number of insurers issuing policies and the overall impact and stability of the program as a whole.

PFL Premium The maximum employee contribution is 0.126% of the employee’s weekly wage or the NYS average weekly wage, whichever is lower Based on the NYS average weekly wage, the maximum contribution amount is $1.65 per week or $85.56 per year. Carriers and payroll companies may not be unified in their decisions on how to cap the deductions. Employers should treat deductions similar to FICA, with an annual cap PFL does not require notification of deductions to employees

PFL Taxation

Who is Eligible? FULL TIME PART TIME Employees regularly scheduled to work 20 hours or more per week are eligible for PFL benefits after 26 consecutive weeks of employment with a covered employer. PART TIME Employees regularly scheduled to work less then 20 hours per week are eligible for PFL benefits after 175 days worked (one day is not defined as any specific number of hours worked on a given day) When calculating weeks of employment or days worked for eligibility purposes: Use of vacation, personal or sick time DOES count as work weeks or days of work Periods of temporary disability DO NOT count as work weeks or days of work

Opt-Out/Waiver of Benefits (12 NYCRR 380-2.6) An employee of a covered employer shall be provided the option to file a waiver of paid family leave benefits: When his or her regular employment schedule is 20 hours or more per week but employee will not work 26 consecutive weeks for the same employer, or Regular employment schedule is less than 20 hours per week and employee will not work 175 days in a 52 consecutive week period for same employer If an employee signs the waiver to opt out of Paid Family Leave: Employer shall keep a copy of the fully executed waiver on file for as long as employee remains in employment with covered employer. No deductions shall be taken from the employees paycheck If an employee chooses not to sign the waiver to opt out of Paid Family Leave: An employee who elects not to sign the waiver shall make benefit contributions for the full duration of employment with the employer. Employer shall be obligated to provide family leave benefits for such employee when he or she is eligible ** Within 8 weeks of change in regular work schedule, any waiver filed under this section shall be deemed revoked. Employee whose waiver has been revoked shall be obligated to begin making contributions to cost of benefits including any retroactive amounts due from date of hire, pursuant to Section 209 of the Workers' Compensation Law.

Exemptions Same individuals exempt for PFL as are exempt from DBL: Spouses or minor children of the employer Ordained, commissioned, or licensed ministers, priests or rabbis Persons engaged in a professional or teaching capacity in or for a religious, charitable or educational institution Volunteers in or for a religious, charitable or educational institution Persons participating in and receiving rehabilitative services in a sheltered workshop operated by a religious, charitable or educational institution under a certificate issued by the US Department of Labor Recipients of charitable aid from a religious or charitable institution who performs work in or for the institution which is incidental to or in return for the aid conferred and not under an express contract of hire Independent contractors Livery drivers Black Car operators Jockeys, apprentice jockeys, horse trainer or owner Elementary and secondary school students “Professional capacity” as defined in 12 NYCRR 355.2(d) while working for a 501(c)(3) nonprofit employer

Requirements for Voluntary Coverage Exempt Employees PFL Benefits must be provided for a period of at least one year. 90 days advance notice must be given to the WCB and to the affected employees before voluntary coverage may be discontinued. As we are currently past the 90 day deadline, all employers who elected to cover exempt/voluntary employees under DBL for 2017 are locked in to cover those employees for DBL and PFL for 2018. If you are changing the way you handle contributions for exempt employees under your current NYS Statutory DBL policy, you must complete Form PFL-135 (No Employee Contribution) or PFL-136 (Employee Contribution Required). If employee contributions from exempt/voluntary employees is preferred, and you currently have a DB-135 on file with WCB (which does not allow deductions), then at least 50% of the exempt/voluntary employees must consent to deductions via a voting process with 30 days notification prior to 12/31. If they vote yes, then a PFL-136 must be filed. As we are past the 30 day notification deadline for the 2017 vote, all employers who have a DB-135 on file electing to cover exempt/voluntary employees under DBL for 2017 will be required to pay the 2018 PFL premium for exempt/voluntary employees only. If you have a DB-136 on file with the NYS WCB, and you’re currently deducting the partial premium for NYS DBL from your exempt/voluntary employees, you do not need to conduct a vote to deduct the PFL premium, nor do you need to complete a PFL-136 as NYS already has your DB-136 on file which will carry over for DBL and PFL for 2018.

Coordinating Leave Disability Leave and WC leave are for an employees own injury/illness, PFL Leave is for the employee to care for someone else. PFL may be taken intermittently in full-day increments. DBL and PFL will be consecutive instead of concurrent leave. They can not be taken at the same time. They can be used consecutively up to a maximum of 26 weeks of benefits for both DBL and PFL combined in a 52 week period. FMLA leave will be concurrent over both DBL and PFL. Employers are not required to provide the same PFL to two or more employees at the same time to care for the same family member. Certain leaves will qualify only under PFL but will not qualify under FMLA as the definition of family member is broader under PFL. During PFL leave, you may supplement your PFL pay with Sick, Vacation, PTO, Personal Days or salary continuation. Employers may request reimbursement of PFL benefit from the carrier.

Coordinating Leave - Examples

HR Topics Employees are entitled to reinstatement to the same position or to a comparable position with equal compensation and benefits, discrimination or retaliation for taking PFL is prohibited (expect an increase in D&O claims) and health insurance must be continued in accordance with the current FMLA guidelines. Employers must update employee handbooks or provide written guidance to employees about PFL. We have a basic framework to assist you. Employers must post a printed posting notice showing that they provide disability and PFL benefits. Posting notices will be sent to you directly from the insurance carriers by 12/15/17. The employee’s notice to their employer must make the employer aware of the qualifying event and the anticipated time and duration of the leave. The employee need not mention the PFL by name therefore employers should seek further information from the employee to determine whether the employee is seeking PFL leave. Claim reporting process for all carriers is not finalized.

Coordinating Leave

Coordinating Leave

What you Should Be Doing Now Have you identified employees who aren’t eligible for PFL and had them complete the opt out/waiver forms? Have you notified your payroll company which employees do not qualify for premium deductions? Have you reviewed policies and procedures to ensure compliance before PFL is effective? Are you prepared to properly track time and coordinate intermittent PFL leaves? Do you have a process in place for billing health insurance premiums during PFL leave? Have you determined how to integrate your own internal leave policies with PFL?

PFL Resources https://www.ny.gov/programs/new-york-state-paid-family-leave Opt-Out/Waiver of Benefits form Bonding, Care for a Family Member and Military Leave claim forms PFL-135/PFL-136 forms https://www.ny.gov/paid-family-leave-calculator Online calculator used to get an estimate of an employee's weekly deduction. https://www.ny.gov/sites/ny.gov/files/atoms/files/PFL_Employer_Lang_hb_v1.pdf Model Language for Employee Materials https://www.ny.gov/sites/ny.gov/files/atoms/files/PaidFamilyLeave_EmployeeFactSheet.pdf NYS Paid Family Leave Employee Fact Sheet

Questions? Katrina M. Papa, GBDS Sr. Claims Specialist Please contact us with any questions: 518-465-3591 or toll-free 800-863-0736 www.austin-co.com Austin & Co., Inc.'s employee benefits representatives provide general information with regard to employee benefits and compliance that employers commonly encounter. We provide information in an advisory capacity only.  Austin & Co., Inc. is not engaged in the practice of law and does not provide legal advice, either written or implied.  With regard to specific legal issues, we suggest you seek legal advice from your corporate counsel or an attorney. Katrina M. Papa, GBDS Sr. Claims Specialist Hope DeRocha, PHR, SHRM-CP Director of HR Consulting Services