The New York State Department of Financial Services (DFS) has announced the maximum contribution rate for the New York State Paid Family Leave, to be in effect beginning January 1, 2018.

Here’s a brief outline of Paid Family Leave:

The Paid Family Leave will mandate a paid family leave insurance policy for all employees and apply to all employers in New York State. It will not come out of employers’ pockets, but will be funded via a 0.126% deduction from employees’ weekly paychecks. However, this deduction is not to exceed the average statewide weekly salary, valued at $1,305.92.  Although the paid leave policy does not begin until January 1st, salary deductions began on July 1st, 2017.

Starting July 1st, employers may begin deducting from employees’ paychecks in order to fund Paid Family Leave. These funds will be used to pay for the employer’s mandated insurance policy, which provides for the paid leave. The disability insurance companies already used by companies are now required to provide for the paid leave as well. This means that in addition to the existing $.60 disability deduction, employees will see a paid leave deduction from their paycheck ($1.65 maximum). Employers are not required to pay their employees’ salary while they are on leave; rather, employees will be compensated through the insurance company.

Employees qualify for paid leave once they have worked for the company for 26 continuous weeks or, in the case of a part-time employee, 175 days total. Employees can use this paid leave policy to care for sick family members, care for a newborn, adopted, or foster child, or attend to a “qualifying exigency.” Additionally, making use of this leave of absence will not jeopardize an employee’s job security.

The New York State Paid Family Leave was rolled out on July 1st, and will be phased in slowly over the next few years.

How will this affect my payroll processing?

• If your company is liable and deducting NY disability from its employees, we will automatically begin deducting the additional Family Leave Insurance (FLI) amount on July 1st. You do not need to take further action. However, if your company or individual employees are exempt from FLI, you may want to mark them as such when applicable so that our so our system does not deduct the FLI unnecessarily.
• If an employee has been hired as a seasonal employee only and you know that this employee is not permitted to work the amount of days/weeks necessary to qualify for this benefit, you need to set up that employee as exempt from FLI. This is because in that case, you are not permitted to deduct the FLI.

For more information, check out this NYS Paid Family Leave Overview.

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