ComplianceMINUTE | Dan Kuperstein | ERISA Penalties Increase for Form 5500 Violations!

New York Sets Paid Family Leave Contribution Rate

Dan Kuperstein

The New York State recently issued a statement setting the employee contribution rate for, when implemented, the nation’s most comprehensive paid family leave benefit. While there is nothing that has to be done immediately, employers should coordinate with their insurance carriers and payroll vendors to ensure they are ready and set up in advance of the January 1, 2018 implementation date.

 
 

Resources:
NYS DFS Statement
ACA(now) – News on Washington

Video Transcript: 
Hi, I’m Dan Kuperstein, and welcome to this episode of ComplianceMINUTE.

On June 1, 2017, the New York State Department of Financial Services (or “DFS”) issued a statement setting the employee contribution rate for paid family leave coverage under the New York Paid Family Leave Law, which, when fully implemented, will provide the nation’s most comprehensive paid family leave benefit.

To provide some background, under the new paid family leave law, beginning on January 1, 2018, employees of employers in New York can obtain paid leave of up to a maximum of 8 weeks annually (and up to 12 weeks annually beginning in 2021, when the law is fully implemented). The paid family leave can be used in order to bond with a new child, care for a loved one with a serious health condition or to help relieve family pressures when someone is called to active military service.

As explained by the DFS, the paid family leave benefits will be funded entirely through employee payroll deductions. DFS has set the weekly employee contribution amount for such coverage at 0.126% of an employee’s average weekly wage, or the New York State average weekly wage, whichever is less, for 2018.

Accordingly, for those employees earning less than the New York average weekly wage, the contribution will be 0.126% of the weekly income they earn. For those earning more than the New York average weekly wage, the contribution amount will be capped at 0.126% of that state average weekly wage. Currently, the New York average weekly wage is set at $1,305.92. So, when you multiply that state average weekly wage by the 0.126%, you get the maximum contribution rate, which is $1.65 per week per employee.

What are the key takeaways here for employers? Well, there’s really nothing that has to be done immediately with respect to the contributions for these benefits, as these contributions are not required to be paid by employees until January 1, 2018, but employers may want to begin the process of coordinating with their insurance carriers and payroll vendors now to ensure that they are all set up in advance of that date.

For more information on this and other ACA topics, visit our Knowledge Center at corpsyn.com. Thank you.