NY Paid Family Leave Self-Insured Employer Deadline

As we previously reported, on January 1, 2018, the New York Paid Family Leave Act (“PFLA”) goes into effect. The PFLA allows employees to take paid family leave for a number of situations, including the birth of a child, placement of a child in adoption/foster care situations, to care for a family member with a serious health condition, or due to a military exigency for an active duty member of the U.S. Armed Forces.

All NYS employers are required to provide for PFL benefits for their employees on or before January 1, 2018. There a multiple ways in which employers can obtain PFL coverage. First, employers that are currently covered under NYS Disability Benefits through a private insurance carrier must obtain PFL coverage through the same insurance carrier.

Employers that are not covered with Disability Benefits Coverage may either purchase private PFL insurance coverage by getting coverage through the NYS Insurance Fund, or apply to the Chair of the NYS Workers’ Compensation Board for approval as a self-insured employer. If an employer decides to self-insure PFL benefits, the employers must post additional security bonds before the NYS Workers’ Compensation Board and accept all liability for paid benefits that exceed the employee funds collected by the employer. Self-insured applications are due by September 30, 2017 in order to be eligible for approval.

In order to be approved as a self-insured employer for PFL benefits, an employer must satisfy the Chair of the Workers’ Compensation Board. The regulations are dense and require a lot of information from the employer. The employer must prove their financial and administrative ability to make payment of the PFL benefits provided and that the applicant’s tangible assets make it reasonably certain the payment of all obligations that may arise. Furthermore, the employer must submit its most recent independently audited and certified financial statement as well as a copy of Form 10K. They also have to execute an agreement to pay disability and PFL benefits with the chair. Employers have to allow the Chair to have access to their workplace to examine the employers operations and records pertaining to the employers’ financial condition and whether the employer is eligible to self-insure for PFL benefits.

Employers that are thinking about self-insuring PFL coverage should review their financial condition before submitting to the Board. Also, they should think about whether they will be able to have all of the required information before September 30, 2017 in order to be eligible.