Paid family leave and paid parental leave are currently key topics for employers as they look to expand benefits for their employees. Recently, San Francisco introduced a paid parental leave ordinance and New York announced a new paid family leave benefits law. These new regulations include some elements that take effect July 1, 2017. Below is a brief summary.
San Francisco
The San Francisco paid parental leave ordinance (SF PPLO) impacts all San Francisco-based employers with more than 50 employees nationwide. For example, a company with 1,000 employees across the U.S. and 25 working in San Francisco would be required to provide benefits to their San Francisco team as of January 1, 2017. Employers with 35 or more employees are required to comply beginning July 1, 2017 and employers with 20 or more employees on January 1, 2018.
The law requires employers to provide six weeks of supplemental paid parental leave to employees working in San Francisco for the birth of a child, and the placement of a child for adoption or foster care. Employers must provide up to 45% of supplemental pay so that, when combined with California paid family leave (CA PFL) benefits, employees will receive up to 100% of their normal gross weekly wages (subject to CA PFL maximums). The leave must be completed in the first 12 months after the birth or placement of the child.
Eligibility requirements:
- Employee commenced employment with the covered employer at least 180 days before the start of the leave
- The employee performs at least eight hours per week of work in San Francisco for the employer
- At least 40% of the employee’s total weekly hours for that employer are in San Francisco
- Employee must be eligible for and receiving CA PFL for baby bonding
One way that employers can comply with (or be exempt from) the SF PPLO is by providing equivalent benefits under their existing paid parental leave policy. Employers should review their policy to be sure it satisfies the following minimum requirements of the SF PPLO:
- Applies to all employees regardless of (for example):
- Full-time/part-time status
- Salaried/hourly
- Union/non-union
- Exempt/non-exempt
- Provides 100% of pay up to six weeks for bonding with a newborn, an adopted child or a foster child
- Eligibility for leave cannot be greater than 180 days of employment prior to the start of the leave
- Applies equally to mothers and fathers
- Applies equally to primary and secondary caregivers
Another way employers can comply with the SF PPLO is by handling it under their California Voluntary Disability/Paid Family leave plan.
The following items would need to be taken into consideration before determining if this is a viable solution:
- Perform a feasibility study if the voluntary plan is funded with employee contributions
- Amend the CA voluntary plan to include a separate class for SF employees that would pay 100% benefit
- Provide written notice to all employees of plan change; including the option to opt out of voluntary plan
- File revised plan document and employee notice to EDD for approval
If employers are not able to cover the SF PPLO obligation under their existing paid parental leave policy or CA voluntary plan, then they must create a separate policy and process to comply with the ordinance.
For more information on benefits, eligibility, supplemental payments and intermittent leave, along with frequently asked questions, please see the Paid Parental Leave Ordinance on the City and County of San Francisco website.
The benefit details and compliance requirements of new paid leave laws can be complex. If your company has questions or concerns related to the new San Francisco ordinance, please contact your Sedgwick client services director.
New York
On February 22, 2017, regulations for the New York Paid Family Leave Benefits Law (NY PFLBL) were released. After the initial comment period, a revised and updated draft amendment was published on May 24, 2017, which has just closed for further public comment. The proposed regulations can be viewed here; we will continue to update you as the amendment is finalized.
The NY PFLBL will become effective on January 1, 2018 and employees will receive benefits to:
- Care for the serious health condition of a family member, including a spouse or domestic partner, child (biological, adopted, foster or in loco parentis), parent, grandparent and grandchild
- Bond with a new child during the first 12 months after birth, adoption or foster care placement
- Care for a spouse, parent or child as a result of military exigency
The weekly benefit is scheduled to gradually increase in subsequent years and is based on a percentage of New York’s statewide average weekly wage (AWW). Below are the percentages for the weekly benefit:
- January 1, 2018: 50% of weekly wage for 8 weeks
- January 1, 2019: 50% of weekly wage for 10 weeks
- January 1, 2020: 60% of weekly wage for 10 weeks
- January 1, 2021: 67% of weekly wage for 12 weeks
The benefits are designed to be fully funded by employee contributions, which will be deducted from the employees’ pay. Funding rates have been finalized and are set at 0.126% of the employee’s average weekly wage (capped at the NY state average weekly wage of $1,305.92) or $1.65 per week. Employers can begin payroll deductions as of July 1, 2017.
Full-time employees are eligible after 26 consecutive weeks of covered New York employment and part-time employees are eligible after 175 days of covered New York employment. When an employee returns to work, they must be restored to the same or a comparable position that they had prior to taking PFLBL.
Sedgwick is prepared to support customers for whom we administer statutory disability claims in New York to help them comply with the PFLBL. Pending the release of the final regulations, we recommend that employers:
- Evaluate their employee demographics to determine whether any employees meet the eligibility criteria
- Engage with a benefits consultant and/or legal counsel for guidance on policy/plan development including updating employee handbooks or leave material to include the PFLBL
- Prepare their payroll functions to add another deduction for the PFLBL
- Prepare to maintain the employees’ existing health coverage for the duration of the PFLBL
For additional information on eligibility and benefits, please see New York’s paid family leave program on the New York State website.
> This article was originally published in the edge magazine, issue 7. Click through to read additional thought leadership from our experts.
Sharon Andrus, Director, National Technical Compliance, Disability Administration