NYS Paid Family Leave
How much burden will this cause your H/R and Payroll Department?
As you are all aware, NYS’s Paid Family Leave (PFL) goes into effect January 1st, 2018. This page outlines an overview of PFL, the challenges the employers face, and how Attendance on Demand (AOD), Attendance Enterprise (AE), and our Micro/Pay (M/P) payroll system are assisting in relieving some of this burden for our customers. Below we are outlining the challenges you will face with these new PFL requirements, and our solution to help you with this state imposed burden.
First, you need to track the Eligibility of employees who are eligible to take PFL time starting Jan 1st. The Eligibility is broken down into two parts:
- Employees who have worked more than 20 hours per week over the last 26 weeks (are eligible as of Jan 1st, 2018), and
- Employees who have worked less than 20 hours per week but have worked 175 days (are eligible as of Jan 1st, 2018).
Challenge #1: Calculating the Average Hours Worked (AHW) over the last 26 weeks. Hours Worked is the key phrase here since every customer has unique Pay Designations and only the ones which are designated as “Hours Worked” can be used in calculating these Average Hours Worked.
Challenge #2: If they have not reached an average 20 hours per week, then you have to calculate if they have worked 175 days (175).
Solution #1& 2: You will need either AOD or AE with the Accruals module. Once the new PFL Accrual rules have been loaded into your AOD or AE system, we can run a “recompute” to look back from the first day you started using either AOD or AE to calculate these two variables. Once the recompute takes place it will automatically flag those employees who have reached those thresholds as “Eligible”. Before the recompute takes place, one of our techs will load into the Accrual system which of your specific Pay Designations are considered “worked” hours, so the recompute is only looking for those specific hours for calculating Hours Worked. If you are a new AOD or AE customer, you will still have the ability to designate which employees are “Eligible”, and manually flag those employees at start up.
Challenge #3: Tracking new employees AHW and 175 days moving forward.
Solution #3: AOD and AE will automatically track those hours for you and automatically flag them “Eligible” once they do become eligible.
Challenge #4: Once “Eligible”, the employer needs to track the employees available balance (in hours) and the benefits used in any given 52-week period.
Solution #4: Once the system flags the employee “Eligible” it will automatically add 320 hours (8 weeks) on Jan 1st into a new pay designation called PFL. You can use this pay designation to track PFL Hours Taken, so the system will keep track of their “Balance In” on Jan 1, what they have used and when, and their adjusted ending balance.
If the employee does NOT take any PFL time in a calendar year, then their new balance and “Accrual Date” will automatically change to the new balances on Jan 1 based on this scale:
Accrual Date Accrual Amount
January 1st, 2018 320 hours
January 1st, 2019 400 hours
January 1st, 2020 400 hours
January 1st, 2021 and beyond 480 hours
Challenge #5: If the employee uses any PFL time, the maximum benefit in any given 52 consecutive week period cannot exceed the maximum hours allowed in that given year. Plus the new accrual date changes from Jan 1st to 365 days AFTER they have used their first PFL hour. This is probably the most difficult and burdensome part of PFL. So if an employee gets 320 hours on Jan 1, 2018, but uses 8 hours of PFL on March 1st, 2018 (since they can only take PFL in single day increments), the new Accrual Date March 1st 2019, NOT Jan 1st 2019. So any employee who uses PFL time now has a moving Accrual Date which you have to track.
Solution #5: The new Accrual system can track PFL hours taken on the time sheet, and automatically re-adjust their new Accrual Date for you, and add the new Accrual Amount 365 days later, until their next Accrual Date occurs.
So to use the above example: the employee gets 320 hours on Jan 1st, 2018. If an employee uses 8 hours of PFL on March 1st 2018, the employee would automatically get another 400 hours on March 1st 2019, and if an employee has not used any additional PFL time in 2019, the employee would get a new 400 hours on Jan 1st, 2020.
Challenge #6: Since the employee now has to contribute to the new PFL system each week, a deduction must be taken from the employee’s pay check each week, and submitted to your insurance carrier.
Solution #6: ComputerSearch Payroll can now deduct the PFL amount like we do for the NYS Disability Insurance.
Challenge #7: Once an employee elects to take PFL time and completes Form PFL-1 Part A, you will be responsible to fill out PFL-1 Part B and send back to the employee within 3 days. Your portion of the PFL-1 Part B form asks you (the Employer) to enter the last 8 weeks of Gross wages for the employee, and calculate the Average Gross Weekly Wage. Since the insurance carrier has to pay the employee a Max % based on NYS’s sliding scale (50%, 55%, 60% and 67% by 2021), they need the Average Gross Weekly rate to figure out what the employee is supposed to get paid. Once you send the PFL-1 back to the employee, they will be responsible for completing any additional forms required depending on the type of leave being requested, and send all the forms to the insurance carrier.
Solution #7: ComputerSearch Payroll can produce a report, by employee, of the last 8 weeks Gross Wages to make filling out the PFL-1 Part B less time consuming.
Challenge #8: Depending on your DBL/PFL insurance billing plan, if you are paying your DBL/PFL quarterly in arears, then you will have to submit employee details (# of Male/Female employees by Month within each quarter, and the Quarterly Payroll subject to the Premium Rate), and a check for the total DBL/PFL premium due.
Solution #8: ComputerSearch will provide our payroll customers with a quarterly report that summarizes all of these details. Furthermore, if you were to buy your DBL/PFL insurance through our CS Benefits division, we would handle all of this paperwork for you, and save you money on your annual premiums!
This summary is for informational purposes only and does not constitute legal advice. Please consult with your legal professional for legal advice and counsel.
If you have any questions regarding how our Attendance on Demand or Attendance Enterprise systems work, or would like more information on utilizing our Micro/Pay software solution, please feel free to contact these individuals below:
Time & Attendance Solutions:
Chris Topolski VP Sales
716-689-0511 (2183) 585-244-3040 (2183)
Payroll & Tax Filing Solutions:
Mark Terry VP Sales
Jim Banigan VP Client Benefits, Benefit Consultant
NYS Paid Family Leave Website