New York Paid Family Leave Update; Lots of Details

Christopher Caldari and Dan Kuperstein

UPDATE: New York Paid Family Leave: Here are the Details | Chris Caldari & Dan Kuperstein | Corporate Synergies
and Dan Kuperstein | Senior Vice President, Compliance


As Seen in The CPA Journal

As Seen In

Our NY Paid Family Leave update describes what it takes to make it work for everyone.


Big changes arrived for New Yorkers on January 1, 2018, when the NY Paid Family Leave benefit went into effect. Called one of the most comprehensive paid family leave programs in the nation, the law requires employers to allow employees to take paid, job-protected leave to tend to a family member with a serious health condition, bond with a new child, or address the needs of a family member on active military service. Our NY Paid Family Leave update details employer and employee requirements.


For example, during any period of leave, employers must maintain the employee’s existing health benefits for the duration of the leave as if the employee had continued to work. During leave taken in 2018, employees receive 50% of the state average weekly wage for up to eight weeks; this will increase incrementally to 12 weeks and 67% of the state average weekly wage by 2021. Currently, the average weekly wage is $1,305.92, which means the maximum weekly pay that employees can receive while on leave is $652.96 for 2018.


Contributions to the New York Paid Family Leave program were required beginning January 1, 2018. In most cases (as permitted by the law) employers will require employees to contribute the entire premium for the benefit. Employers may also choose to fund it themselves. In certain unionized workplaces, where a collective bargaining agreement provides for paid family leave benefits that are equal to or greater than the state’s requirements, contributions to New York Paid Family Leave are not required.


Contributions toward the cost of the insurance are calculated based on 0.126% of either the state average weekly wage or an employee’s average weekly wage, up to $85.56 per employee per year. If contributions are based on the employee’s weekly wage and the employee earns higher wages in a given week, the contribution would be larger for that week.


If the employee meets the $85.56 maximum with one employer, but then moves to another employer, the individual will need to begin deductions again with the new employer. Under the current rules and guidance, there is currently no procedure for providing a “credit” at the new employer for the employee’s prior deductions. Therefore, an employee could possibly have more than $85.56 deducted within a 52-week period.


Employers who voluntarily provide statutory disability to employees otherwise ineligible for these benefits must also provide the New York Paid Family Leave benefit. If these employers choose to collect the contribution from employees, they can only do so if more than half of the employees agree to contribute. If the employer chooses to stop offering the New York Paid Family Leave benefit, they can only do so after providing the benefit for one year and giving 90 days’ notice to the Workers’ Compensation Board and employees.


What Are the Eligibility and Notice Requirements?

An employee is eligible for New York Paid Family Leave if the individual works a regular schedule of 20 or more hours per week and has worked for the current employer at least 26 weeks before the first full day of leave. Employees who work fewer than 20 hours per week are eligible after 175 workdays.


Employees must submit Form PFL-1 to their employer’s insurance carrier (or to their employer if the plan is self-insured) at least 30 days before leave begins. Depending on the reason for leave, the employee may need to provide medical certification of the family member’s condition (or have a family member submit to a medical exam). The employee must also submit one of the following forms:

  • PFL-2—“Bonding Certification” to take leave to bond with a newborn, adopted child or foster child
  • PFL-3—“Release of Personal Health Information under the Paid Family Leave Law” to take leave to care for a family member with a serious health condition (used in conjunction with PFL-4)
  • PFL-4—“Healthcare Provider Certification for Care of Family Member with Serious Health Condition,” used in conjunction with PFL-3
  • PFL 5—“Military Qualifying Event” to take leave because of a family member’s impending or active military duty.

How Is New York Paid Family Leave Administered?

For most employers, it’s administered by the employer’s short-term disability carrier. (Short-term disability carriers also manage federal leave programs). Many of the major short-term disability carriers offer absence management solutions, which help identify events that can trigger leave and track time during leave. Some employers with unionized workforces will have the New York Paid Family Leave (or their union’s permissible alternative CBA-covered paid family leave benefits) administered solely through the union.

How Do Employees and Employers Account for the Benefit?

Premiums are deducted from employees’ after-tax wages.

New York Paid Family Leave update: did you know benefits are paid as taxable, non-wage income?

Such income must be included in federal gross income for federal tax purposes and must be subject to state and local income tax. Taxes will not automatically be withheld from benefits; however, employees can request voluntary tax withholding.


New York Paid Family Leave benefits are reported by the New York State Insurance Fund on Form 1099-G; other payers (such as private insurance carriers or a company’s self-insured fund) will report benefits on Form 1099-MISC.


Employers should note employee contributions to New York Paid Family Leave on Form W-2 in Box 14, “State Disability Taxes Withheld.” Employers should also make sure that they have separate earning codes in their payroll system for New York Paid Family Leave benefits and employee contributions.

What’s the Difference between Paid Family Leave and Disability Leave?

These are different benefits that can work together, but the monetary benefits cannot be paid to the employee at the same time. Specifically, employees can combine both laws’ leave periods for a total of 26 weeks of leave in a 52-week period—eight weeks of New York Paid Family Leave and 18 weeks of disability—if they qualify for both. There are, however, some details to watch for:

  • Paid leave cannot be used for an employee’s own disability.
  • Employees cannot receive paid leave benefits (e., monetary benefits) and disability benefits at the same time.
  • An employee may receive disability benefits or New York Paid Family Leave benefits during the same post-partum period, but not concurrently.

What’s the Difference Between Paid Family Leave and Paid Time Off?

Unlike with the federal Family and Medical Leave Act (FMLA), an employer cannot require an employee to first use accrued paid time off (PTO) before New York Paid Family Leave goes into effect. Employers can, however, give the employee the option to use personal time off in lieu of the New York Paid Family Leave benefit.


If, however, an employee plans to use New York Paid Family Leave and FMLA at the same time, the employer is subject to federal FMLA rules (for more than 50 employees), and the employee is eligible for leave under both laws, then the employer’s FMLA policy dictates how personal time off is used. In other words, if an employee is eligible for both FMLA and New York Paid Family Leave, the employer can mandate the use of accrued, unused PTO first.


New York Paid Family Leave is not FMLA

The most important difference between New York Paid Family Leave and FMLA is that New York Paid Family Leave pays 50% of an employee’s average wages and FMLA does not. In addition, each program has different requirements. FMLA applies to employers with 50 or more employees within a 75-mile radius of the worksite at which the employee is employed, while New York Paid Family Leave applies to any New York company with one or more employees, and applies only to those employees actually working in the state.


An employee must work at least 1,250 hours in the 12 months before FMLA leave; New York Paid Family Leave requires an employee to work 26 weeks before taking leave.


The New York Paid Family Leave law went into effect January 1. By now, employers should have already reviewed current leave policies in their employee handbook, collective bargaining agreement, plan document, and summary plan description, and determined how the New York Paid Family Leave policy will work with them. It may work alongside these policies, or the employer may need to make changes to them.

Furthermore, the law requires employers to maintain a new employment policy (either within or outside of the existing employment policies in the employee handbook) that explains all of an employee’s rights and obligations under the New York Paid Family Leave. This includes information on how to file a claim.


Employers must also display posters outlining New York Paid Family Leave coverage, similar to posters required for workers’ compensation. Individuals will need reminders about how the New York Paid Family Leave law functions and its requirements. Employers should communicate with their employees and ensure that everyone understands the rules.


© 2018 Corporate Synergies Group, LLC. No part of this material may be republished or distributed without prior written consent.

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