When you become an employer, part of your responsibilities include handling payroll taxes. On top of remitting taxes, you also might employ workers in a state with a paid family leave program, such as New York.
If you have employees who work in New York state, you need to learn about the New York PFL program.
What is New York Paid Family Leave?
In 2016, the state of New York passed a law giving NY employees up to 12 weeks of paid family leave.
Paid family leave provides paid time off to employees for family- or medical-related life events. There are a number of states with paid family leave, such as California, Massachusetts, and Washington.
Paid family leave is mandatory in New York state. Almost all employees are eligible for PFL, and employers must give applicable employees PFL.
Unlike some other programs, New York’s Paid Family Leave is funded only by employees. This means employers do not have to pay into the NY PFL fund.
If you’re a self-employed individual, you can opt into New York Paid Family Leave by purchasing an insurance policy.
The majority of employees who work in New York state for private employers are eligible for PFL. However, NY excludes certain categories of workers from being eligible for the program, such as ministers, priests, and some not-for-profit workers.
Fortunately, employers can opt to voluntarily cover workers who aren’t eligible for PFL.
Covered employees are able to take PFL for a qualifying event once they meet requirements:
- Full-time employees: Must regularly work 20 or more hours per week and are eligible after 26 consecutive weeks of employment.
- Part-time employees: Must regularly work less than 20 hours per week and are eligible after working 175 days (not consecutive).
Reasons why employees use PFL
NY PFL gives employees the ability to take paid time off for certain medical or family events. Employees can take paid family and medical leave to:
- Bond with a newly-born, adopted, or fostered child
- Care for a close relative with a serious health condition
- Assist when a family member is deployed abroad on active military service
NY Paid Family Leave guarantees that employees have job protection and health insurance while on leave. Employers are not allowed to discriminate against employees for requesting or taking PFL.
Employee contribution rate for NY PFL
Again, New York State Paid Family Leave is fully funded by employees. Although, employers may choose to cover the costs themselves.
Employers must deduct NY PFL from employee wages and remit it on behalf of their employees.
The 2023 contribution rate for NY family leave is 0.455%. Withhold 0.455% of each eligible employee’s gross wages. The maximum annual contribution is $399.43 per employee.
New York offers a PFL calculator on its website to help determine the payroll deduction amount.
Keep in mind the contribution is subject to change each year. Stay up-to-date on annual contribution amounts.
Employee contribution examples
Take a look at a couple of different contribution scenarios below.
Employee does not reach cap
Say your employee makes $1,000 per paycheck before deductions. This employee is paid on a weekly basis.
To calculate the employee’s PFL deduction, multiply their gross pay ($1,000) by the contribution rate (0.455%).
$1,000 X 0.00455 = $4.55
Your employee will contribute $4.55 per paycheck for PFL.
Because your employee makes $1,000 weekly, their annual pay is $52,000, meaning that your employee will not reach the cap. Their annual contribution would be $236.60 ($52,000 X 0.00455).
Employee reaches cap
Let’s say you have another employee who earns $100,000 annually. Stop withholding once the employee contributes $399.43.
Obtaining PFL coverage
Typically, PFL coverage is added to an employer’s existing NY state disability insurance policy. Paid family leave does not replace disability benefits coverage.
Contact your current insurance carrier to obtain PFL coverage. If you do not currently have an insurance provider, you can visit the Department of Financial Services website for a list of insurers that offer PFL policies.
Once you obtain PFL coverage, you can begin remitting payments to your agency. How frequently you remit the contributions to your insurance provider depends on your business and number of employees participating (e.g., quarterly basis). Be sure to discuss payment requirements with your provider.
Overview of NY PFL
Feeling overwhelmed by all of this New York State Family Leave act information? No worries. Here’s a brief recap of the key points you need to know:
- NY PFL is an employee-only program with no cost for employers
- Full-time employees must work 26 consecutive weeks to qualify for PFL
- Part-time employees must work 175 days (not consecutive)
- Employee contribution amount is 0.455% in 2023
- Employers are responsible for remitting employee PFL contributions
- The maximum annual contribution is $399.43 in 2023
- Employees taking PFL receive 67% of their average weekly wage, up to the same percentage of the NY State average weekly wage
- Employees can take up to 12 weeks of NY PFL
Looking to streamline your payroll process? Patriot’s payroll software lets you run payroll in three easy steps. And, we offer free, USA-based support. What are you waiting for? Get started with your self-guided demo today!
This article has been updated from its original publication date of April 8, 2016.
This is not intended as legal advice; for more information, please click here.