From the duration to the benefit payouts, DBL and PFL differ significantly.
Brokers in New York can now sell a new mandatory benefit: Paid Family Leave. We’ve been talking about this new coverage since New York State announced the law in April. As January approaches, the benefit becomes reality in two short months.
As news of the coverage begins to spread, employers and employees have questions. It’s important for brokers to establish themselves as trusted experts and to explain the benefits in a simple, straightforward manner to company executives and HR professionals.
What’s The Difference between PFL and DBL?
The main difference is that employees take DBL if they are injured or ill. Employees take PFL to care for someone else. That’s the most important thing to remember.
However, there may be some overlap. For instance, a new mom may file for DBL if she needs time off for her body to recover from childbirth. When that coverage ends, she can collect PFL to spend time with her new baby.
In most cases, it’s pretty obvious to determine which benefit an employee should collect. And there are some pretty big differences between the two benefits.
Let’s explore seven ways DBL and PFL are different.
1. Eligibility Requirements
Both full-time and part-time employees may qualify for PFL or DBL coverage. Requirements vary.
Full-time employees must work 20+ hours a week and have been employed at least 26 consecutive weeks at their current employer to qualify for PFL.
To qualify for DBL, employees must work the number of hours that the employer considers a full-time work week, and have worked at least four consecutive weeks for any covered employer.
Important to Note: DBL coverage eligibility transfers from one job to another in many cases. PFL does not.
Part-time employees must have completed at least 25 work days at any covered employer to qualify for DBL. To qualify for PFL, 175 days at their current employer is required.
2. Waiting Period
The waiting period for DBL is seven days from the date of filing. Paid Family Leave has no waiting period, so employees can begin collecting benefits immediately.
3. Maximum Leave
DBL has the edge here. Employees can take up to 26 weeks in any consecutive 52-week period.
PFL provides 8 weeks of benefits beginning in 2018, increasing to 12 weeks in 2021 in any consecutive 52-week period.
It’s important to note that employees cannot collect PFL and DBL benefits at the same time. One must stop when the other begins. In that situation, the combined duration for both benefits is capped at 26 weeks during any 52-week time span.
4. Job Protection
As part of the Family Medical Leave Act, which is a national law, employees who take Paid Family Leave receive job protection for the duration of their leave, regardless of the size of the company. Employers must hold their position or provide a comparable position when an employee returns from PFL.
DBL offers no job protection for ill or injured employees.
5. Benefit Offsets
You can collect DBL benefits concurrently with Paid Time Off, such as sick days or vacation time. This can help employees make ends meet by collecting a full paycheck plus DBL benefits for a time.
On the other hand, you cannot use PFL with other PTO.
Employee contributions for DBL are capped at 60 cents per week, regardless of the employee’s average weekly wage.
PFL benefit contributions are capped at 0.126 percent of the employees’ weekly wage, to a maximum of $1.65 per week in 2018.
7. Benefit Payouts
DBL pays 50 percent of an employee’s average weekly wage up to $170/week. PFL has a more generous benefit, phased in to start at 50 percent of an employee’s average weekly wage in 2018, and topping out at 67 percent of the employee’s average weekly wage by 2021.
The major difference is the cap. While DBL caps out at a less-than-living wage of $170/week, PFL is capped at New York’s Average Weekly Wage, currently $1,305.92.
Enrich DBL Now
In New York, although the maximum employee contribution for DBL is much lower than PFL, so is the benefit payout. In other states that mandate PFL, disability insurance and Paid Family Leave provide comparable benefits.
Employers are wise to consider enriching New York State DBL coverage now. Enriched DBL benefits packages that are more in line with PFL benefits can help reduce fraud, improve employee morale, and increase retention rates. (We’ll talk more about this in a future post, so stay tuned.)
It’s up to you, the broker, to educate your customers on the options today. DBL Center is here to help.
Contact our disability insurance experts about PFL riders and enriched DBL coverage now.
by Dawn Allcot