Increasing the Paid Family Leave (PFL) Benefit?
This post was authored by Dan Colacino, Vice President of Underwriting and Compliance at Rose and Kiernan, Inc.
Okay, here’s what happens when we don’t have a statutorily mandated, earlier adjournment date for the New York State Legislature.
The New York State Senate has made it a priority to pass Senate Bill S8380A adding bereavement leave as a condition for taking Paid Family Leave (PFL), the program that just began on January 1, 2018, which already appears to be in serious financial jeopardy. The bill was introduced in mid-May and has already passed in the Senate. It’s pretty much wired in the New York State Assembly, also. The effective date is January 1, 2020. We don’t dispute that bereavement leave is a legitimate reason for time off, which is why most employers already provide some amount of time off for this purpose.
The flaw in Senate Bill is twofold. First, before adding any benefits to this program, it should be looked at from a financial perspective. The rates set by the state for 2018 appeared to everyone to severely underfund these policies. The only reason insurance carriers are providing the benefit is that the state was smart enough to tie it to the Statutory Disability Program, so if a carrier didn’t want to incur the almost-guaranteed losses from PFL, they had to drop their entire book of Statutory Disability business in New York state. There’s nothing in the bill saying how much this will add to the cost of PFL which, by the way, is entirely funded by employees… at least at this point. My projection is that the state will change that in future years as the cost increases, or else they’ll wipe out any gains from increasing the minimum wage.
The second (and probably most glaring) problem with this bill is that there is no limit to the number of days that can be used. This means that in 2020, an employee can take off ten weeks at 50 percent pay for bereavement for anyone on the list that is considered a family member. Hopefully, the New York State Worker’s Compensation Board will issue regulations which add a little bit of reason to this statute.
The justification in the bill cites an unnamed source in the American Cancer Society about unresolved grief, but never ties that to the need for including it as a paid benefit. In fact, it does cite a SHRM study which notes that on average, employers provide an average of 4 days already for bereavement.
As stated, we don’t object to the intent, but the lack of consideration, hearings and documented need for this program. As always, it’s the employers who will have to deal with the mess caused by our legislature in their haste to pass pet legislation prior to the November elections.