Is Disability and Paid Family Leave Benefits Coverage Required?
Professional Employer Organizations (PEO) and Leased Employees
Disability and Paid Family Leave benefits coverage is required for both leased and non-leased employees. Employees contracted through a Professional Employer Organization (PEO) are deemed to be employees of the "client" company that is paying to lease them. A PEO assumes a dual employer relationship with their client. The client generally recruits and hires its employees and contracts with the leasing firm to handle the payroll, taxes and benefit packages for its employees. The PEO must be licensed by the New York State Department of Labor.
Clients of PEOs may be covered by either of the following methods:
- Each client of a leasing firm may purchase its own disability and Paid Family Leave benefits insurance policy to cover its leased employees (as well as any non-leased employees). Proof of coverage must be filed electronically by the insurance carrier using the client legal entity name and FEIN.
- The PEO may obtain a disability and Paid Family Leave benefits insurance policy in the name of the client which would cover the leased employees only. Since the coverage is only covering a class of employees it must be filed manually with the Boards Plans Acceptance Unit at PAU@wcb.ny.gov using form DB-820/829. The coverage must be filed by the insurance carrier using the client legal entity name and FEIN. The PEO information may be provided as the Policyholder. Carriers may contact the Board's Forms Department to obtain this form.
The Professional Employer Organization (PEO)
Disability and Paid Family Leave benefits coverage is required for individuals performing the administrative services of the PEO. Leased employees used by the clients of the PEO are NOT considered employees of the PEO for disability and Paid Family Leave benefits.