Previous editions of Entertainment Partners’ (EP) Legal & Labor Relations Newsletter have reported general information about the passage of New York state paid family leave (“NYPFL”) legislation and subsequent adoption of implementing regulations. The purpose of this Alert is to review the basics of NYPFL and explain the nature of assistance that EP will provide to its clients for NYPFL administration. As explained further below, EP will handle certain requirements while the client organization will be responsible for others that are under its control. Nothing in this Alert constitutes or is intended to constitute legal advice, and clients are encouraged to consult with their legal advisors regarding application of NYPFL to their specific situation.

 

The Basics

Beginning on January 1, 2018, eligible full-time and part-time employees will be able to take partially-paid leave to care for newborn child, family member with a serious health condition, or to assist with family duties when a family member is called into active military service. The amount of leave and wage replacement over a 3-year period ranges from 8 to 12 weeks and 50% to 67% of average weekly pay up to the State average weekly wage cap. The table below outlines the phasing of the leave and benefit increases.

 

Dates Amount of Paid Leave Taken Within Benefit Rate At Not To Exceed
Jan 1, 2018 – Dec 31, 2018 8 weeks 52-week period 50% of average weekly rate 50% of NY state average weekly wage
Jan 1, 2019 – Dec 31, 2019 10 weeks 52-week period 55% of average weekly rate 55% of NY state average weekly wage
Jan 1, 2020 – Dec 31, 2020 10 weeks 52-week period 60% of average weekly rate 60% of NY state average weekly wage
On or after Jan 1, 2021 12 weeks 52-week period 67% of average weekly rate 67% of NY state average weekly wage

 

The NYPFL wage benefit component is modeled on the New York state short term disability program (“NY Disability”) wherein the employer either self-insures or secures private disability insurance to pay the benefit to eligible employees suffering a non-work disability. While NY Disability only entails payment of partial wage replacement benefits, NYPFL also includes employment protections in the form of protected job leave, reinstatement at conclusion of the employee’s leave and maintenance of the employee’s health insurance coverage during the leave. The NYPFL program is funded solely with employee paycheck deductions remitted to the employer’s NYPFL carrier who administers claims and pays the benefits to the employee; employers do not contribute a separate fringe. An employer’s NY Disability carrier must also provide NYPFL for the employer and will likely formalize the NYPFL coverage in a rider to the employer’s NY Disability policy.

 

Which employers are covered by the NYPFL law?

Employer coverage is broad and applies to employers of any size or location with at least one employee working in New York (“NY”).

 

Is EP or the client responsible for NYPFL compliance?

As explained in the answers below, EP will be responsible for certain components while the client will be responsible for others. The specific answer will vary depending on the particular area of responsibility involved and whether the client is an EP statutory employer client or pay agent client.

 

Who will secure NYPFL insurance coverage for client production workers paid by EP?

For EP statutory employer payroll clients, EP will secure the NYPFL insurance coverage just like NY Disability. EP pay agency clients, however, will need to secure their own NYPFL coverage.

 

Which employees are eligible?

Full-time employees (employees regularly scheduled to work at least 20 hours per week) having a qualifying reason – see above in The Basics – are eligible if they are employed at least 26 consecutive workweeks before the employee’s first day of NYPFL begins, excluding absences due to the nature of the employment where the employee is not terminated.

Part-time employees (employees regularly scheduled to work fewer than 20 hours per week) having a qualifying reason are eligible after the 175th day of work with the employer.

Because client production employees paid by EP generally have variable schedules for client productions and it is uncertain whether they are scheduled above or below 20 hours per week, EP’s Benefit Solutions group will run the report for the client under the full-time test and, if not eligible, then under the part-time test, in response to an individual employee’s claim/request for NYPFL.

Eligibility review assistance from EP’s Benefit Solutions group will only be available for EP statutory employer payroll clients and will occur at the time of the employee’s NYPFL claim/request; pay agency clients will need to perform their own eligibility reviews, and the EP pay agent’s role would be limited to providing source payroll information.

 

What work activity is counted for the full-time/part-time employee eligibility determinations?

First, because the client controls the employee scheduling, leaves of absence and job reinsta
tement, EP will measure employee eligibility at the client common law (controlling) employer level akin to sick leave, meaning that an employee’s EP-paid work activity will be pooled across client production companies under common control as designated by the client to check eligibility. Example: an EP-paid employee’s 6 weeks of work activity from 4/1-5/12 with common law employer 1 company A and 6 weeks of work activity from 5/13-6/23 with common law employer 1 company B would be added together in reviewing eligibility.

Second, NY Workers’ Compensation Board (“NYWCB”) guidance – agency in charge of enforcing NYPFL – states that PFL applies only to work in New York, and, therefore, EP will limit covered pay activity for eligibility reviews to the employee’s NY work state activity payrolled by EP with the client common law employer organization.

As mentioned above, EP pay agency clients will need to run their own analyses/reports, and EP assistance would be confined to provision of raw source payroll data.

 

Are clients responsible for managing leave of absence and job reinstatement protections?

Yes, because the client controls hiring, scheduling, leaves and termination, the client employer is responsible for administering leaves of absence and job reinstatement for production workers qualifying for NYPFL. EP has no control over these matters and thus is unable to manage them.

 

Are clients responsible for maintaining an employee’s health insurance during the NYPFL leave period?

Yes, if the employee is insured under the client’s health plan (including the client’s EP Cares plan) at the time leave is taken, health coverage must be maintained during the NYPFL leave as if the employee were actively working. The employee can be required by the client to continue paying the employee’s share of premium that the employee had been paying when actively working.

 

How does the NYPFL claim process work in a nutshell?

Most of the interaction occurs between the requesting employee and employer’s NYPFL insurance carrier. Employees seeking NYPFL are supposed to notify the employer at least 30 days in advance if foreseeable and as soon as practicable if not foreseeable. While the soonest that leave can start is January 1, 2018, NYPFL requests with January 1st start dates may be made 30 days beforehand in early December. The employee is responsible for completing and submitting applicable claim paperwork for the employer’s NYPFL insurance carrier. The employee will need the employer, health care provider, and/or care recipient, depending on the particular leave, to complete forms or portions of forms. The NYPFL carrier is required to respond within 18 days after the employee submits all completed paperwork whether to accept or deny the claim. Assuming acceptance of the NYPFL claim, the carrier pays the benefits to the employee.

EP’s Benefit Solutions group will communicate with the client, employee and EP’s NYPFL carrier as needed to facilitate claims administration in the case of EP statutory employer payroll clients. EP’s claims administration assistance is predicated on the employee making the NYPFL claim in connection with employment on a project that EP is payrolling the employee for the client. EP pay agent clients will be responsible for facilitation of claims administration with their NYPFL carrier themselves.

 

Are there employee notification and posting requirements under the NYPFL law?

Yes. If the employer maintains an employee handbook, NYPFL information must be included. Those employers without an employee handbook need to provide separate written guidance on employee rights and obligations under the NYPFL law, including information on how to file a claim. For EP statutory employer payroll clients, EP will make a rights notification tailored to entertainment industry production worker engagements available for clients to distribute to their employees working in NY.

As to posting, once the NYWCB publishes a model rights posting, the employer must post it in plain view where employees can readily see or access it. Currently, no model posting is available, but if and when one is published by the NYWCB, EP will include a sample for EP statutory payroll clients to post at their production set.

 

Is EP or the client responsible for the NYPFL employee paycheck deductions?

For statutory employer payroll clients, EP will automatically take the employee paycheck deductions and remit them to EP’s NYPFL insurance carrier. As to pay agency clients, the EP pay agent will record the deduction on the employee’s paycheck and issue a credit on the client’s payroll invoice for the deduction, but it will be the client’s responsibility to remit NYPFL paycheck deductions to the client’s NYPFL carrier.

 

What is the amount of the NYPFL paycheck deduction?

Currently, 0.126% of the employee’s weekly wages with a maximum rounded to $1.65/week (0.00126 x $1305.92 current NY state average weekly wage). The cap may vary yearly based on different NY average weekly wage.

 

When are NYPFL paycheck deductions triggered?

Because of NYWCB guidance stating that NYPFL applies only to those employees working in NY, deductions will only be taken where the paycheck involves NY work activity.

 

Does NYPFL apply to loan-out companies?

No, NYPFL does not apply to bona fide loan-outs; it is confined to direct hire production worker employees.

 

Are union employees under a collective bargaining agreement (“CBA”) covered by NYPFL?

Yes, because entertainment industry CBAs do not provide paid family leave benefits as favorable as the NYPFL program, no CBA exclusion exists.

 
 

For further questions, please visit the State’s NYPFL site at https://www.ny.gov/programs/new-york-state-paid-family-leave or contact EP’s Benefit Solutions group at benefitsolutions@ep.com.