Tax Policy

New Paid Family Leave Requirements Impacting New York Businesses: What You Need To Know

Back in 2016 New York expanded its Nonoccupational Disability Law (NYDBL)  and in doing so became the 5th state to require paid family leave. Beginning January 1, 2018, New York employers subject to New York State workers’ compensation requirements are mandated to offer eligible employees paid family leave. Employers have just under 6 months to be in compliance with the new law or face fines and penalties. This article will discuss everything you need to know about New York Paid Family Leave (NYPFL).

Funding Requirements

Unlike New York State Unemployment Insurance (NYSUI), NYPFL will be entirely funded by eligible employee contributions. Employers may begin deducting from employees pay starting as early as July 1, 2017 or as late as January 1, 2018. The maximum employee contribution is the lesser of 0.126 percent of an eligible employee’s weekly wage, or .0126 percent of the statewide average weekly wage. Effectively, this translates to a maximum weekly contribution of $1.65 for 2018. Additionally, maximum caps will be adjusted by September 1 of each subsequent year.

An employer may chose to pay the premiums on behalf of its employees, however, doing so would make the NYDBL benefits taxable. To avoid this problem employers may add the premiums paid to its employees taxable wages.

Employee Eligibility

Employees who both work in New York and qualify for NYDBL coverage are automatically eligible for family leave if they either:

  • Have 26 consecutive weeks of employment at or above 20 hours per week, regardless of the number of days worked per week, or:
  • Work fewer than 20 hours per week after working 175 days

Employees are not required to take all of their sick-leave and/or vacation time before using paid family leave. An employer may permit the use of these days for full pay, however, they may not require an employee to take such action.

Available Leave Under NYPFL

Employees who are eligible for NYPFL can take a leave of absence for the following reasons:

  • Care for family member (spouse, domestic partner, child, parent, parent-in-law, grandparent or grandchild) with serious health conditions.
  • To bond with newborn or adopted child.
  • To address issues that may arise when a family member (spouse, domestic partner, child or parent) is called to active military service.

Amount of Benefits and Leave Time

For 2018 the maximum leave is 8 weeks at 50% of the employee’s weekly wages, not to exceed $648. For 2019 this increases to 10 weeks with a maximum payout of $710 per week. For the year 2021 and after, NYPFL increases to 12 weeks with total estimated maximum payouts of $864 per week.

Employee Notification of Leave

An employee is required to notify an employer 30 days prior to taking the leave.  New York is expected to release specific forms to be used by employees when requesting paid family leave.

Employer Health Coverage

An employer with an employee on paid family leave is required to offer health coverage during this period.

Employer Penalty

Employers who fail to provide paid family leave to an eligible employee may be subject to a fine up to 0.5 percent of the weekly payroll. In addition to this fine, a penalty may be assessed for failure to collect employee contributions. Employers who fail to collect employee contributions will be liable for all payments due on behalf of the employee and will not be able to seek reimbursements from their employees for that period.  

Employer Action Plan

To be ready for the implementation of this new law employers should do the following:

  1. Determine if your employees are eligible for NYPFL.
  2. Consider when you should begin to deduct NYPFL contributions from employees pay. It is better to start sooner than later as it is difficult to collect retroactive premiums.
  3. If you have not yet been contacted by your carrier you should reach out to see whether or not they cover NYPFL as well as NYDBL. Carriers are required to notify employers by July 1.
  4. If you self fund NYDBL, consider self funding NYPFL as well.


Jeremias Ramos is a CPA working at a nationally recognized full-service accounting, tax, and consulting firm with offices conveniently located throughout the Northeast. Jeremias specializes in tax and business consulting with focus areas in real estate, professional service providers, medical practitioners, and eCommerce businesses.

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