New: Payroll Deduction for NY’s Paid Family Leave Starting July 1st
New York made headlines last year when it announced the passage of the nation’s strongest family leave plan, known as the New York State Paid Family Leave Program. Starting January 1, 2018, the employee-funded program will provide New Yorkers with 8 weeks of partially paid leave when certain life events occur. The weekly benefits and duration will increase slowly, maxing out at 12 weeks by January 2021.
Requirements for New York employers:
As part of the program, employers are required to purchase a Paid Family Leave insurance policy. The cost of this plan will be funded solely by employee deductions. However, employers can opt to fund the policy themselves. Employers are permitted to begin collecting the weekly employee contribution for paid family leave coverage starting on July 1, 2017, for the 2018 premium. This will take place as a nominal payroll deduction.
The New York State Department of Financial Services (DFS) has released the 2017-2018 employee contribution rate:
- The maximum employee contribution for coverage beginning January 1, 2018, will be 0.126% of an employee’s weekly wage, capped at the statewide average weekly wage, which is currently $1,305.92 and is updated every March 31.
- Currently the maximum weekly contribution for employees earning $1,305.92 or more per week is $1.65.
As an employer, you will not be required to fund any portion of the family leave benefit. You will use the funds solely collected by employee deductions to provide benefits through a rider to your existing disability benefit plan. If you wish to provide the benefits at your own cost, you can opt out of the employee deductions.
**** IMPORTANT: As your payroll provider, Fingercheck will automatically begin deducting the Paid Family Leave Plan contribution from the weekly wages of New York workers starting July 1, 2017. Additionally, if you’ve set up a General Ledger integration to your accounting software, we will automatically map this new payroll deduction to the same account as your taxes and disability. However, if you would like to map it to a different account, please feel free to contact us.
If you do not want this contribution to be deducted, please notify us by July 1.
For more information on the requirements and benefits under the New York Paid Family Leave law, visit the official website here.