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New York’s New Paid Family Leave Requirements: What Employers Need to Know

Tuesday October 10th 2017

In 2017, New York state joined California, New Jersey, Rhode Island, and Washington as one of the few states to enact a paid family leave program.*

New York’s program will be phased in over four years. By the time it is fully implemented in 2021, its program will be the most comprehensive in the nation.
Here’s what business owners need to know—even if they’re not based in New York.

Who is eligible?

Employees with a regular work schedule of 20 or more hours per week are eligible for paid family leave after 26 weeks of employment, while employees with a regular work schedule of less than 20 hours per week are eligible after 175 days worked.

How do employers calculate the benefits?

Starting in 2018, employees may take up to eight weeks of paid leave capped at 50 percent of the average weekly wage in the state; 10 weeks capped at 55 percent in 2019; 10 weeks capped at 60 percent in 2020; and 12 weeks capped at 67 percent in 2021.

The weekly wage is computed by adding employee wages for the eight weeks prior to the start of paid family leave and dividing that total by eight.

The paid family leave coverage will be added to an employer’s existing disability insurance policy. Employers will deduct the policy’s premium cost from employees through a payroll deduction. They can also cover the cost themselves. The maximum employee contribution in 2018 is 0.126 percent of an employee’s weekly wage, capped at 0.126 percent of the annualized New York State Average Weekly Wage.

What does paid family leave cover?

Paid family leave is available for the following circumstances:

  • to parents during the first 12 months after the birth, adoption or fostering of a child;
  • to employees caring for a spouse, domestic partner, child, parent, parent-in-law, grandparent, or grandchild with a serious health condition; and
  • employees assisting family members while a spouse, child, domestic partner, or parent is deployed abroad on active military duty.

Employees are not entitled to continue to accrue paid time off while out on paid family leave. However, the law and regulations do not prohibit employers from allowing employees to continue accruing leave during their time on paid family leave.

Employees are also guaranteed job protection upon return from paid family leave and continuation of health insurance while out on leave.

When an employee changes employers, he or she must re-establish eligibility with the new employer.

What about out-of-state employers?

It does not matter where an employer is based or where an employee lives—paid family leave coverage applies to those who work in New York. If an out-of-state employer has employees working in New York for 30 or more days in a calendar year, those employees are entitled to paid family leave benefits.

Where can I learn more?

On July 10, the New York State Workers’ Compensation Board adopted regulations that provide guidance to employers, employees, and insurance carriers regarding their rights and responsibilities under the paid family leave provisions. These regulations were effective July 19, 2017.

On August 25, the New York Department of Finance and Taxation published a notice providing more details on the paid family leave program’s tax implications for employers, employees, 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 but 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; and
  • Benefits should be reported by the State Insurance Fund on Form 1099-G and by all other payers on Form 1099-MISC.

The state also has a dedicated Paid Family Leave Program website that provides detailed explanations of all parts of the law’s requirements. Employers and employees who are covered by the law should continually monitor the site for announcements related to paid family leave in New York.

*(The District of Columbia also has paid family leave.)

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