New York State Paid Family Leave Resource Center

An employer's guide from HR One

In 2016, New York State passed a Paid Family Leave (PFL) law that provides partial income replacement and job protection while workers are on leave for covered reasons. There are many factors at play with this law and the regulations associated with it which will impact almost every employer in the state. That's why our team of human resource and payroll professionals have put together this material, to help organizations navigate and explain this complex new environment.

Here's what you need to know:

Overview Benefits Eligibility
Request Forms Contributions  Withholding and Payroll Deductions 
Withholding and Benefit Examples Tax Implications of PFL Job Protection
Informing Employees   Interrelationship with Workers' Comp Interrelationship with NYS Disability
  Interrelationship with the FMLA  

 Overview

JANUARY1PAIDFAMILYLEAVE

Paid Family Leave is intended to provide workers in New York with job-protected paid leave to bond with a new child, care for a relative with a serious health condition, or to relieve the pressure of having a loved one called to active duty in the military. Just as employers are required to provide Workers' Compensation insurance and NYS Disability insurance, they are required to provide Paid Family Leave coverage, though they may deduct the premium contributions from their employees.

Employees will be able to access paid leave benefits beginning in January of 2018.

Employers are required to purchase a PFL insurance policy from their NYS Disability carrier or they can self-insure1. The income replacement will be fully funded by mandatory employee payroll deductions. 

Back to top

 

Benefits

The PFL Benefit is being phased in over time (see chart). In 2018, employees will be eligible for up to 8 weeks of paid leave at up to 50% of their average weekly wage or 50% the statewide average weekly wage (SAWW), whichever is smaller. In 2019 and 2020, employees will be eligible to use up to 10 weeks of leave, and receive up to 55% and 60% of their average weekly wage or 55% and 60% of the SAWW, respectively. In 2021, employees will be able to use up to 12 weeks of leave and receive up to 67% of their average weekly wage or 67% the SAWW. 

Effective Date

Max. Length of Paid Leave

Payable % of the Employee’s Average Weekly Salary

Max. % of 
Statewide Average Weekly Wage (SAWW)

1/1/2018

8 weeks

50%

50% of $1,305.92

1/1/2019

10 weeks

55%

55% of TBD

1/1/2020

10 weeks

60%

60% of TBD

1/1/2021

12 weeks

67%

67% of TBD

 


The benefits of Paid Family Leave are paid by the employer’s NYS Disability insurance carrier. Employees will need to submit a claim form to the insurer before receiving their benefit. The insurance company also has responsibility for determining the validity of the claim and either approving or denying it.

Back to top

 

Eligibility 

  • All employees who work full time (20+ hours per week) for 26 weeks, or have worked part time for 175 days2, are eligible to use PFL.
  • All employers with one or more employees are subject to the law with few exceptions3
  • Employees do not have to use accrued sick leave, vacation, or other paid time before using PFL. 
  • If an employee does not expect to work long enough to qualify for Paid Family Leave, the employee may opt out of paying Paid Family Leave payroll contributions by completing a waiver of benefits form.  This waiver is optional, and an employer may not require that an employee sign a waiver. Employees who complete a waiver will not contribute to Paid Family Leave through payroll deductions and will not be eligible to take Paid Family Leave.  If the employee’s schedule changes and will be expected to qualify for Paid Family Leave, the waiver is automatically revoked and the employee is responsible for paying any required Paid Family Leave contributions from the first day of employment.
  • When an employee changes employers, he or she must re-establish eligibility with the new employer. If an employee has regularly worked 20 or more hours for 26 weeks for a covered employer, they meet the eligibility requirements for Paid Family Leave.  If they have not worked 26 weeks for the covered employer and start regularly working less than 20 hours per week for that covered employer, they will become eligible after 175 days worked. The average weekly wage for the employee is calculated by adding up their pay for the last eight weeks and dividing by eight.

Back to top

 

Paid Family Leave Use and Request Forms

Requesting PFL

 

  • Employees may take PFL during the first 12 months following the birth, adoption, or fostering of a child. This is the one use of Paid Family Leave that is unique in that it is retroactive to cover children who were born, adopted, or placed in a home in 2017, so that employees may take the leave beginning January 1, 2018. Employees can take up to 8 weeks until the child's first birthday or first anniversary of their adoption/placement. 
  • Employees may take PFL to care for a close relative with a serious health condition. Close relatives include spouses, domestic partners, children, parents, parents in-law, grandparents, and grandchildren. Serious health conditions include an illness, injury, impairment, or physical or mental condition that involves: inpatient care in a hospital, hospice, or residential health care facility; or continuing treatment or continuing supervisions by a health care provider.  The person being cared for must be unable to go to work or  school, do regular daily activities, or be otherwise incapacitated for at least 4 consecutive days by a serious medical condition.
  • Employees may take PFL if they are eligible for time off under the military provisions of the Family Medical Leave Act (FMLA) when a spouse, child, domestic partner, or parent of the employee is on active duty or has been notified of an impending call or order of active duty.
  • Employees planning on taking PFL must provide their employer with at least 30-days of advanced notice if the qualifying event is forseeable, i.e. an expected birth or adoption, planned medical treatments for a family member, or a known military exigency. If the event is not forseeable the employee must notify their employer as soon as practicable. Notifications should include:
    • Enough information to make the employer aware of the nature of the event,
    • Anticipated duration of the leave,
    • If there are changes to the timing and duration of the leave the employer must be notified as soon as possible.

Employers may only waive the notification requirements if it is in the employee's favor, such as a less stringent notification period for forseeable leave. Information on applying for benefits can be found here.

HR One clients can access the forms for requesting Paid Family Leave and waiver forms by logging into the clients only section of our website (use the Member Login link at the top of this page) under the "Forms" section. 

NYSPFL Collage (1)

 Back to top

 

Contributions

The New York State Department of Financial Services (DFS) has set the maximum contribution rate for the first year at .126% of an employee’s weekly wage, up to the statewide average weekly wage (currently $1,305.92). This means that annual contributions for 2018 are capped at $85.56. Employers should not take a deduction from any portion of an employee’s income that exceeds this amount. This means that some employees will hit the cap of $85.56 faster than others (see withholding examples below).

Employers may choose to pay some or all of this on behalf of employees as an added employment benefit, but are not obligated to do so—most employers will simply use a payroll deduction. The DFS will announce a new contribution rate by September of 2018. 

Back to top

 

Withholding and Payroll Deductions

Employers may begin deducting employee contributions any time after July 1, 2017. However, this may or may not be appropriate depending on how the organization currently pays for their NYS disability (DBL) policy, since PFL will be included. 

If the DBL/PFL premium is paid on an annual basis and due January 1 – then it may make sense to start deductions now. If the premium is in arrears and quarterly – then it makes sense to start deductions January 1, 2018. Employers cannot retroactively collect premiums.

*Employers should contact their insurance broker/carrier to determine the premium payment AND their payroll provider to set up the deductions.* 

*For HR One payroll clients: Payentry has the capability to make these deductions. If your annual premium is paid annually or you self-insure contact us to schedule the start date for deductions. *

Prior to making any deductions from employees' wages employers should notify them in writing that the deduction is being made in order to comply with New York's Paid Family Leave law. Employers may also choose to include a brief summary of the PFL eligibility requirements with this notice. HR One has a sample letter employers can use in the client section of our website under "Forms > NYS Paid Family Leav." 

HR One clients can also view a brief demo video on how to set these deductions up in Payentry.

Back to top

 

Withholding and Benefit Examples: 

Monroe (1)
Rosalee (1)
Liam

Douglas is an employee in New York who makes a salary of $52,000 per year with no bonuses or fluctuations in his average weekly wage. His employer should deduct .126% from his entire paycheck (since it is smaller than the SAWW), which equals $1.26 per week, or $70.56 per year.

If Douglas is eligible for PFL benefits in 2018, he will receive $500 per week—which is 50% of his own average wage—since that is less than 50% of the SAWW and proportionate to what he paid into the plan. 

Anna is an employee in New York who makes $78,000 per year with no fluctuations in her weekly wage. Her employer should deduct .126% from her weekly wage of $1,500 which equals $1.89 per week. She will hit the annualized contribution cap of $85.56 after 45 weeks (give or take) and will not need to make additional contributions.

If Anna is eligible for PFL benefits in 2018, she will receive $652.96 per week—which is 50% of the SAWW—since that is smaller than 50% of her own average wage and proportionate to what she paid into the plan.

Liam is an employee in New York who makes a base salary of $50,000 per year, but is also paid bonuses for achieving certain sales goals. His weekly wage for the first four weeks of the year is $961.54 until he earns a bonus, and so in the fifth week of the year his wage is $2,500.00. He will be contributing .126% of each week's wage, so some weeks it could be higher than other weeks- for example, his contribution would be $3.15 for the week he earned the higher wage. Because he makes larger contributions during weeks when his wage is higher, he may hit the annual threshold of $85.56 earlier than other employees, like Anna, whose weekly wage is more steady (or he could take longer than other employees to reach the threshold if he doesn't make as much bonus money). 

If Liam is eligible for PFL benefits in 2018 and hits the $85.56 threshold, he will receive $652.96 per week—which is 50% of the SAWW—since that is smaller than 50% of his own average wage and proportionate to what he paid into the plan. If he doesn't hit the threshold he will receive an amount equal to 50% of his average weekly wage.

How should our organization approach this?
In practice an employer may decide to do one of the following, though it's best to check with your payroll provider to discuss how they are set up to manage deductions.

  • Deduct .126% of each employee's weekly wage until they hit the maximum contribution of $85.56. Applies to all employees.

OR

  • For employees making more than the statewide average weekly wage they may deduct a flat dollar amount of $1.65 per week. All other employees would see a deduction of .126% of their weekly wage.

Back to top

 

Tax Implications of PFL

Paid Family Leave has tax implications for New York employees, employers, and insurance carriers, including self-insured employers, employer plans, approved third-party insurers, and the State Insurance Fund. 

  • Benefits paid to employees will be taxable non-wage income that must be included in federal gross income
  • Taxes will not automatically be withheld from benefits; employees can request voluntary tax withholding
  • Premiums will be deducted from employees’ after-tax wages
  • Employers should report employee contributions on Form W-2 using Box 14 – State disability insurance taxes withheld
  • Benefits should be reported by the State Insurance Fund on Form 1099-G and by all other payers on Form 1099-MISC

Back to top

 

 Job Protection

  • Employers must hold an employee’s job for them while they are away on PFL, or reinstate them to a comparable position with the same or better pay, benefits, and terms and conditions of employment.
  • Employers must continue to provide the employee’s existing health benefits while on PFL.
  • Employees must continue to pay the usual portion of their health benefits premium while on PFL.
  • Employers may not discriminate or retaliate against employees in any way for using or asking to use their PFL, including discipline, reduced hours, or reduced pay or benefits. 

Back to top

 

Informing Employees

Man -and -women -reading -a -letter -by -the -computer -at -home _SK3ulh RBs SMALL
  • We strongly urge our clients to notify employees that they will see a deduction and what that deduction is for. HR One has developed a sample letter our clients can download and customize in the Member area under "Forms." If you need your user ID and password email trossi@peopletopayroll.com.
  • Employers who provide a handbook with other benefit and leave information should include information about PFL in their handbook.
  • HR One has developed PFL policy language for the employee handbooks we write for clients. 

Back to top

 

Workers' Compensation

An employee that is not working and collecting workers’ compensation is not eligible for PFL.

Back to top

 

Interrelationship of PFL and NYS Disability Benefits

PFL and NYS Disability benefits cannot be collected at the same time.  If an employee is eligible for both, the combined total in any 52 week period may not exceed 26 weeks.  A female employee who is going to have a baby would be allowed to take the period of incapacitation defined by her physician, followed by 8 weeks of PFL. An employee who opts to take PFL first may do so, but since they will no longer be disabled after the 8 weeks of PFL, they would not be eligible for paid NYS Disability benefits at the conclusion of PFL. 

Back to top

 

Interrelationship of PFL and Federal Family Medical Leave Act (FMLA) 

In certain instances, the PFL and FMLA will overlap. Where leave is taken for a reason specified in both the FMLA and PFL, the leave can be counted simultaneously against the employee's entitlement under both regulations as long as the employer provides the employee with notice of this designation. For example, an employee who takes a leave for the purpose of caring for a newborn or adopted child may have their leave counted simultaneously against their 12-week entitlement under FMLA and their entitlement under the PFL. 

Back to top


Notes 

Self-insure: The essence of the concept is that a business that is liable for some risk, such as health costs, chooses to "carry the risk" itself and not take out insurance through an insurance company. In self-funded health care, the employer ultimately retains the full risk of paying claims, in contrast to traditional insurance, where all risk is transferred to the insurer. Go back up.

2175 days worked, not 175 days since the date of hire. Go back up.

3Excluded from the definition of employee, cited as examples, are the following:

(1) The spouse or a minor child of the employer for whom such person renders services.
(2) A duly ordained, commissioned, or licensed minister, priest or rabbi in the exercise of his ministry, a sexton, a Christian Science reader or a member of a religious order in the exercise of duties required by such order.
(3) A person engaged in a professional or teaching capacity in or for a religious, charitable or educational institution.
(4) A volunteer in or for a religious, charitable or educational institution.
(5) A person participating in and receiving rehabilitative services in a sheltered workshop operated by a religious, charitable or educational institution under a certificate issued by the United States Department of Labor.
(6) A recipient of charitable aid from a religious or charitable institution who performs work in or for the institution which is incidental to or in return for the aid conferred and not under an express contract of hire.
(7) Any individual who is an independent contractor.
(8) A livery driver covered for work-related injuries by the Independent Livery Disability Benefits Fund pursuant to Article 6-G of the Executive Law.
(9) A black car operator covered by the Black Car Operator’s Fund pursuant to Article 6-F of the Executive Law.
(10) A jockey, apprentice jockey, exercise person, employee of a trainer or owner licensed under Article two or four of the racing, pari-mutuel wagering and breeding law, covered by the New York Jockey Injury Fund, Inc. pursuant to section 221 of the Racing, Pari-Mutuel Wagering and Breeding Law.

Go Back Up.

Stillhavequestions