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PeopleWork 01 - Kristine Theodorakos from Bond Benefits Consulting

PeopleWork 01 - Kristine Theodorakos from Bond Benefits Consulting - Complete Payroll.png

PeopleWork 01 - Kristine Theodorakos from Bond Benefits Consulting - Complete Payroll.png

Welcome to the inaugural episode of our new video series, PeopleWork, where we interview various experts in the Human Capital Management industry and explore the news, latest trends and topics that impact all of us who make a career out of managing a workforce of people. We kick off the series with an in-depth conversation with Kristine Theodorakos from Bond Benefits Consulting about Paid Family Leave - not just from the employer's standpoint, but from the employee's perspective as well.

You can watch the video and read the transcript from the conversation below:





So, before we get into it, there maybe people watching who are not sure what paid family leave is and or how it might be relevant to them. So if you want to take a minute and expand into that?

Yeah. So, like you said it just came into effect, we are talking a couple of month into 2018. But, we started hearing about it last parading in 2017. A law was passed in and around April 2017. But it went into effect this past January. January 1 2018. And a lot of people really don’t have their arms around it yet. But that is okay, so this is a good moment to help them with that. So, from the employee perspective, it is something that is available to all New Yorkers. Anybody working in New York State. And it is a program that is meant to give them time away from work when they are bonging with a new child, when their family member has a chronic illness, and they are helping supporting that situation, or when there is military exigency.

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So, how do the benefits work? If those are qualifying events, how can somebody take leave? How does that whole thing work?

Sure. So, it is a system that is going to be controlled by an insurance plan. So, it is a moment in between the employer and the employee where the employee is going to know they might think that they are going to take a PFL leave, and they are going to get into the specifics of what they are. They will seek out the employer for the information, and the employer will give them the claims paperwork. And the employee has to go through the exercise of filling out the claims paperwork. Getting the insurance carrier their required supporting documentation, and there can be a lot to that, and submitting it to the insurance carrier. So, the overall view of it is it is different than the New York state statutory disability. You are going to take DBL if something is going on with you. But PFL is essentially when you are dealing with something with your family. So if there is a family member that is seek with a chronic illness, something that can be proven. Doctors are going to be involved, statements are going to be signed. If there is a new baby, or a new foster placement, or adoption. You can take time to bind with the new child. Or a military exigency excepting somebody is getting deployed. There is graduation, there is an event, there is time needed for counselling, things of that nature, you can apply for PTL, and you get up to 8 weeks off this year in 2018. While you are off, the main differentiator is your job is held, you get paid to a certain amount, and your benefits are in place that is say you have medical and dental, vision from that employer. They have to remain in place while you are away on PFL. So, it is something the employers need to be mindful of, and educate the employees on, which is what we are doing right now. Because there is a lot to it, and people need to understand that even though it is a big landscape, and there is many ins and outs to it, it is meant to be a positive thing for New Yorkers, to help in situations that are really changing their lives. And sometimes, let’s just step back and think about why. Why is this happening? The majority of the workforce will soon be the younger generation, and there is a desire for more of a work life balance. There is also a need for there to be a better paternity benefits in USA. So, that is one of the reasons why NY State has made PFL a thing.

So, you talked about how employees can get paid. We talked about qualifying events, bonding with a new child, caring for a relative, or military exigency. And it can take up to 8 weeks job protected, maintain their benefits. Then you mentioned they can get paid, how does that work? 

Sure. So, it is 50 % of their wage in 2018. PFL will be phased in for over 4 years’ time. So, when we get to 20, 21, it will be 60, 70% of somebody wage. But, that is not everybody’s wage. There has to be some caps on things. The max benefit amount.so, let’s just focus on 2018, it is based off of the average New York state weekly wage which is 1305 dollars and 92 cents. So, just to summarize that, it maxes out at somebody getting 67 thousand dollars. So, they get out 50 % of the average new York state weekly wage.so, somebody took PFL, I take PFL today, the most I can get is about 130 dollars today for taking PFL.

Okay, that makes sense. So 50% of your salary up to the state average. So if you make more than 1300 a week, you are still only caped at making 50 % of that.

Exactly, people don’t understand that, and that is very important.

And as I understand it too, you don’t necessarily have to take 8 weeks consecutively. Right? You can break it up. How does that work?

Yep. So you can break it up. And it is really going to be based on how the claim is approved. And that is something that is important too. This is not where you are going to the employer and they are saying yes, no you can’t do this. The employer needs to understand that too. The insurance company makes the decision if they are going to approve or deny the claim. So, within that claim paperwork, that the employee is going to submit, they will state if it is going to be consecutively or if they are going to be elements in days for the PTO. It has to approve as such, and you are right it does not have to be straight 8 weeks. Somebody is like: I only need an hour on Wednesdays. It does not matter, that hour counts as a full day for PTO.

Right. And is not that true that FMLA can be taken in hourly   increments, or am I getting that mixed up with something else?             

15 minute increments. And we should step back on that. FMLA is for larger employers. 50 or more is when we are talking in this world of leave for FMLA, so that comes into play. So, a lot of small employers groups don’t think they have to worry about PFL, because they don’t have to worry about FMLA. But PFL is for any employer, or private sector employer that has a least one employee. Ok? And it gets very detailed when you can take things together, when they dog tail with different disability benefits. And I would say: an employer and an employee want to talk to their broker, we help our client understand that that would be too much for this. But yeah, absolutely, there are other leaves that come into play and they can piggy back on each other, or happen at the same time.

That is really interesting. We have experienced that on the payroll. We have emailed our clients on the payroll side, wanting to help them set up their payroll deductions. And we should talk about that in a second. And these small businesses have said: we have been advised that we don’t need to do this, because we don’t qualify for FMLA. So, we don’t need to worry about FMLA leave is New York state, which is not true. FMLA only applies to employers with 50 employee or more. As you just said PFL is one employee and you have to comply with it. I am really glad you mentioned that. That is something that is really important. You know, as a new law, you can’t expect everybody to just know that or assume that. Within the coming months and years, everybody is going to familiarize themselves with it and understand what they need to do, but as this thing is beginning to roll out, it kind of make sense why not everybody would totally understand it or expect that they have to comply. But, anyway, I just used the term payroll deduction, and PFL. Talk about how this whole policy is funded, and what it means for employers and employees.

Sure. So, who found the benefits? When it was first rolled out, Governor Cuomo said: employers won’t have to pay anything for it, don’t worry about it. And you know, we all chuckled about that. Because as an employer, you may not be paying for PFL, but there is a lot that goes into it that costs you money. You have to understand the benefits, you have to educate accordingly. And regardless of how people   feel about things politically, it is all about the education. If you understand it well, and if you educate the employees to understand it, everybody can rip the benefits of what it is meant to do for New York state employees. So, in terms of funding it, the employer has to do a lot on the back end to work with somebody like me, and asks their questions, and make sure that they are compliant and giving the proper information to the employees. Because it could cost them money for noncompliance, if they don’t give the paper work at the right time, if they don’t fill out things in the right time frame, or if they discriminate when it comes to PFL. So, that is very true. But let’s just talk about who pays for this.

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So, when it started in January, the employees do, all of us. Full time, par time, full time and part time employees are eligible. And all of us started paying into it. So, complete payroll started doing deductions, some started in 2017, depending on how an employer pays they NY state statutory disability bills, because now, PFL is now part of that bill. So, to make it real, an employee making 41 thousand dollars a year, they will pay about a dollar a week for PFL. It is a percentage of their payroll 0.126 % of this year in 2018. No employee will pay more than 85 dollars and 56 cents for PFL in 2018. But if you make less than a certain amount, that 0.126 percent, you may not be paying the full 85.56. But again no one will pay more than that in 2018 for PFL. So, if you think about the max benefit of it, the most I can pay is 85 dollars, the max benefit is 5000 dollars. So you are paying very little, to get kind of a lot. So people are like: how is that going to work? So, for 2018, the rate is understood, and what the cost is, it is community rated. And what that means, for people that don’t deal with insurance every day, the state sets their rate, we are all in the same pool, the rate is the rate, it does not matter if you have one employee or a thousand employees. We are all focused on that 0.126 % and doing the deductions with the payroll company from there. Next year, I don’t know, depending on utilization of the plan, the state could say: we need to adjust this percentage of what people are paying for it.  But, we can worry about that next year. We will probably know more about that in the late summer time, when they look back on utilization. There is other states that have had this type of leave for longer than NY has: California, New Jersey, and Rhode Island. Now, their leave is different from ours. There is different weeks involved, there is different percentages, there is different costs, but we are all kind of the same. NY State has the most comprehensive PFL program. But in other states, the most that PFL is used for is for bonding, about 80 to 85 %. So that is what NY is planning as well. But utilization of the benefit depends on what the benefit costs overtime. That is the same thing with medical insurance, as an example. So, to wrap up what it costs, it is about a dollar a week, no more than 85 and 56 cents for the year in 2018, per employee.

Yeah, very interesting. Thank you. One thing I wanted to make sure of is that when you say .126 that is to be clear .126 of a percent that is not .126 as in 12.6 percent. Basically, a fraction of 1% of your salary, correct?


So, what you are also taking about that was really interesting to me. So, you are saying the most the employee will be forced to pay for this benefit, because essentially it is like insurance policy, right? So when the deduction comes out of your pay check , and it is like a dollar something a week max, and ultimately it ends up being a maximum of essentially a premium of 85 dollars a year with the potential benefit of over 5000 dollars. We are really talking about what you paid for the premium, versus what you can get out of it in terms of the benefits. And, I really liked that you brought it up, essentially you are talking the solvency of the program. Ultimately, are they going to be enough people to pay into it? Because when you look at 85 versus 5000, you are thinking: man, it is really tremendous. Upside, you think if everybody who has kids, moms, and dads, take PFL to bond with their children, are there going to be enough people paying into it in order to fund the benefits. Do you by any chance, know how it played out in other states? If they had to make adjustments, and things like that?

There is data out there that we can look into. And really, we have only talked about the utilization part of it, that 80 to 85 %, and that everybody has a different type of plan, we are never comparing apples to apples, but, to go back to what you said: who is paying into it? Parents, things of that nature. Every NY state employee is, part time or full time. So, that is a lot of people. So, someone might say: I will never use this, I don’t want it, and how can I wave out of it? Well you can’t! Because we are all eligible. So, that is a thought. All of these people are paying in, but only a small population is going to use it. I should not say small, we don’t know that, but that is a fact, any part time or full time employee is eligible. So, let me talk about that. Some people don’t even realize they have been paying for this for a couple months. Every week they are paying for it. And people don’t realize it yet, probably, because it is only 85 dollars and 56 cents, but we are aware that that is still a cost to employees. Maybe they will use the benefits, maybe they won’t. Either way, it is something that we all need to be aware of, that we are paying for. So, In terms of a full time employee, you can’t work for an employer, use PFL, jump to another employer, and use PFL right away. You have to meet the eligibility period. So, for full time employees, it is 26 weeks. You have to be working full time for an employer for 26 weeks to be eligible for PFL. So that is a good thing to have those rules in place. There is a lot to it CJ, we can talk about it if we needed to. For part time employees, they are deemed eligible even part time. People think: No not the part time, just like they think: No, I am a small employer. No, part time are eligible if they have worked 175 days for that employer.

Let me ask you this. Is it 175 days on the job? Or having worked for that company for a 175 days?

Good question. Actual days’ worked. And what is important there too is: it is in a 52 weeks period. So, if a part time employee has not worked 175 days in a 52 weeks period, they can waive. If a full time employee has not worked 26 weeks in a 52 weeks period, they can waive. It depends on the industry right? Employer groups know when they have “seasonal employees”. And when they are going to want them, or when the employee is going to want to sign that waiver. No. what if they are typically not working that much time? Do we just assume they waive out? You need to track this. You need to track the people that you are unsure of, that you deem to be part time, that you think are working less than 175 days. You can’t think and just say: I think we are good here. You have to know. It has to be tracked. Band has a system, BTA, where we help employers track their payroll companies. Complete Payroll is going to have a system where you can track PFL. And people are already tracking things like FMLA if they are larger. You need to have a system in place to track. And some people say: well, I will do it in a spreadsheet. Ok. That sounds fun. You can do that. But, you should have a system, because employees may fluctuate, and if they have signed a waiver, then we need readdress when they are eligible. I don’t think it will affect as many people, but there are some employers groups that may be listening to this, and they are like: That is going to affect me a lot. And we can help with that. You need to know when it is proper, and the right time to get that waiver out and get it signed.

Yeah. Great. I really want to get into a little bit about how you guys Band can help employees and employers on this side, but before I do that I have a couple of questions. First of all, it is pretty clear to see how the average employee like this would benefit from this. Because before January 1st of this year, there was not PL, for bonding with a child, for caring for a sick relative, or military exigency. I know some people, I, myself am one of those people who is expecting a child in 20018, and is planning to take PFL, so, it is clear to see how a lot of employees would be excited about this new law. Why would employers be excited about this law? What are some of the things that they might be looking forward to as a result?

Well they probably want to be. You know it is a lot to do and to know, and to be non-compliant can be very expensive. Let’s just get that out of the way. As employers, we understand that. In other states, they have found that there is better employee loyalty with something like this. To talk about somebody having a new baby, there is somebody that I helped recently, they had a new baby, and that changes your life anyhow? Right? But the new born had a heart condition, and that is a lot to go through. And that was really something that eased their mind. There are other things in place for women with maternity leave, that if you are paying for it, voluntary short term disability, it might not be voluntary, it does not matter. But there is some payment there. But with PFL, it offers another moment of relief, if you will. And that is one of the reasons behind it. So, that employee is going through something very difficult, and this plan is going to support them through that, and give them some sort of wage. While you as the employer are holding their jobs, and your thought is: you have trained the employee, they know the job, the culture, they know the company. When they are done with that leave, you want them to come back right? So, with PFL, that is one of the main positive points. They can expect that employee loyalty, and for that employee to return to work. So, it is reduced turn over. Because we turnover comes recruiting, interviewing, and training, and we also respect the fact that it is hard to say: I am a small business owner, or a large. Somebody is going to be away for 8 weeks? Well you hope that that is employee that is already up to speed is coming back, and they have found that this promotes that return to work.

Great. That is a great answer. Thank you. The other question I wanted to ask is: like I said, we have actually talked a lot about it from the employee side today, which I think is really important because as we talked about before in 2017, it was all about what it means on the employer’s side. But, say that you happen to stumble upon this video, and you are an employee at some company in NY State, and either you are pregnant, or your wife is pregnant, and you are thinking ok. We are going to have a baby this year, let’s say it is august, and I think I might be interested in applying for PFL. What do you do? How does an employee submit a claim and what do they need to do? What do they need to know?

Great question. And I think it is important from the employee perspective, because nobody ever really does until they are already in the situation. So, if you are an employee that you think you will have any type PFL event, besides just having a child. You know there is the other 2 pockets. So, what you would do is: you would go to your employer whomever that you would talk to about a benefit situation like this and say: I am interested in taking PFL. And there is some things that they need to make you aware of. Your leave is PFL eligible and FMLA eligible if applicable. And we help guide people in terms of understand that. But, most HR people, this is what they do. But the real thing is they have to understand their statement of rights if you will. It is a one pager that the employee must get. They need to read through that to understand the not’s and [inaudible] of PFL, but also the claim packet. So, there are forms that need to fill out: 3 separate packets . And PFL 1 to 5 are the different forms. So, for some leaves, you are just going to need PFL 1 or 5, for others, you are going to need more. So the employer would essentially give them that claim packet, and maybe they are looking into a couple of PFL’s, give them all the packets. And the employee walks away with that information and completes it. So it is going to be filling information, it is going to be gathering supporting documentation, like a birth certificate, for example, or somebody is sick in your family [inaudible]. Authorization in terms of talking to that relative’s doctor and getting them to fill out stuff within PFL, within that claim packet. You then have to give it back to your employer. They will have to fill out a piece. They have 3 business days to do so. Then they give it back to the employee. It is the employee’s responsibility to submit the claim to the insurance carrier. So, that is important. And, usually that is not how things go. You want your employer to help you. But really, it is the employee’s responsibility to submit the claim to the insurance carrier. Once the insurance the insurance carrier gets it, again they are the one deciding, not the employer. So, when they get your packet, it needs to be everything that is required, and if you filled it out properly, and you gave them everything that they needed, the clock starts there, and they have 18 days to approve or deny the claim. And if it is approved, we have seen payments start immediately, so that is a good thing. And if it is denied, you will be made aware of that, the employer will be made aware of that. And the employee does have time, 30 days, to submit additional paperwork. May be they missed something. They do have a chance to submit again, but they need to wait to get the approval or the denial.

Let’s say it is approved, how long after the qualifying event do they have to take all of the maximum of 8 weeks?

What do you mean?

So, let’s say my wife and I have a baby right now, and my claim is approved. And I know that I get up to 8 weeks. Do I have 8 weeks to take all those 8 weeks? Do I have 6 months to take all those 8 weeks?

Good question. It is 8 weeks in a 52 weeks rolling period. So, the employer needs to be tracking that as well. If CJ went and if you take PFL, you can take it again. But, there is a time frame in which you can do so, and there is different stipulation depending on the section that you are taking it for. So, bonding with the baby, you can only do that within one year of birth foster placement or adoption. So, somebody can’t be bonding with a child now that is older. There is rules around it. So, again, within 1 year of birth, foster placement, or adoption. So, even the law went to effect in 2018, if somebody had a baby or there is a foster placement or adoption in 2017 that would constitute PFL for bonding in 2018, because it is within that one year time frame.

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So, they won’t pay me to take leave to go bond with my 21 year-old? On her 21st birthday?

Right. Not to joke about it, but if a family member is sick, and we are here in NY, and they are down in Florida, you need to be around each other. So, you can’t be going to the beach to help somebody. And I flip flop that around. So, there is a lot of information that is required to be submitted to the insurance carrier. They would be very thorough about reading through that and approving accordingly. Is there anything that we have not covered? I know that is a dangerous question, because there is just so much that we can go into. Before we get into how bond can help, is there anything that you would like to share on either the employee or the employer side?

Just to break it down. It is an insurance policy, the employee is paying for it. The insurance company will approve or deny. It is not up to the employer to approve or deny. It is not up to the employer to approve or deny. And it is not up to the employer to pay it. It is up to the employee. And it is not up to the employer to pay that 50 % of the awarded benefit. It is up to the insurance carrier. So, there is different people involved, and it is important to know that. Now, how bond can assist? We are a broker. We are a benefit consultant. And we are meant to be that liaison between you and the insurance carrier, or you and the doctor, you and the dentist, whatever you need help with at that time. You are in the affordable act. There is a lot of things that we advise on. So, with PFL, I would say right now, there is just a lot of questions. And we will do different seminars in different areas of the state of NY face to face where we are educating, and we are saying: here is the law, we all get that, but let’s talk about real life examples. And that is important. So, we will do exercises like that. But employers are welcome to reach out to us at any time and just run the questions by us. And we will do our best to answer that, and support you along the way in making sure that you are compliant with PFL. So, a lot of times, I am seating down with employers that have not quite worked with us yet, and I am saying: let’s work through PFL practices. What do you have on file? Do you know when to get the statements rights? Do you know that there is 3 different packets?  And some of them are 11 pages long, and some of them are 15 pages long. So we will just bring clarity overall, and that makes it easier for everybody to rip out the benefits of the benefits.

That is great. Oh my Gosh. Kristine, I can’t thank you enough being on our show, especially the inaugural video, this is super exciting. You have added a ton of value in helping illuminate PFL. Now that the dust is settled, even though we are only getting started with that actual roll out and compliance with the law, but you really added a lot of value on the employer and employee side, and I really appreciate you being here. We will provide some links that people can follow to learn more about what you guys do, and you can help especially with PFL, and aside from that. Like I said, I really appreciate your time. And thank you so much.

Thank you CJ. This is great.

Links for more information

Think our video series PeopleWork is pretty cool? You can learn more about the series and apply to be featured on an upcoming episode here

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