NYS Paid Family Leave Benefits Law (PFL)

Jill S. G. Palmeter, CPA, Principal (Oct, 2017)

What is it?

  • Passed in April, 2016, this applies to all employers currently paying workers’ compensation insurance.  Unlike the federal Family Medical Leave Act (FMLA) affecting employers with 50 or more employees, NYS Paid Family Leave (PFL) applies to all employers with very few exceptions.
  • Employees will be able to access PFL benefits beginning in January, 2018 if they work full-time (20+ hours/week) for 26 weeks or have worked part-time for 175 days. 
  • Employers in NYS must purchase a PFL insurance policy from their NYS Disability carrier or they can self-insure.  Policy premiums are paid from employee withholdings not to exceed $1.65/week or $85.56/year for 2018.
  • Employee benefits - in 2018 up to 8 weeks of paid leave at up to 50% of their average weekly wage or 50% of the statewide average weekly wage (SAWW), whichever is smaller.  For 2018 the SAWW is $1,305.92, so $652.96/week.  In ensuing years, the length of paid leave, percentage of weekly salary and SAWW will all continue to rise.
  • PFL is intended to provide workers in New York with job-protected paid leave to:
    • Bond with a new child during the first 12 months after birth, adoption or fostering.
    • Care for a close relative (spouse, domestic partner, child, parent, parent-in-law, grandparent, or grandchild) with a serious health condition including illness, injury, impairment, or physical or mental condition that involves: inpatient care in a hospital, hospice, or residential health care facility; or continuing treatment or continuing supervisions by a health care provider.
    • Take time off under the military provisions of the FMLA when a spouse, child, domestic partner, or parent of the employee is on active duty or has been notified of an impending call or order of active duty.

Other important aspects of FPL for the employee:

  • PFL benefits cannot be used for an employee’s own illness.
  • Employees must give a 30-day notice to their employers whenever possible (maternity or paternity leave, planned medical procedures for a family member, or known military exigency), along with any documentation of the need for and anticipated duration of the PFL.  If the leave is not foreseeable, notice should be given as soon as possible.
  • At the end of the PFL, the employee has a right to return to the same position, or to one which is comparable.
  • Employees do not have to use accrued sick leave, vacation, or other paid time before using PFL, although benefit accruals can cease during the leave period before restarting upon the employee’s return. 
  • Benefits paid to employees will be taxable non-wage income that must be included in federal gross income and will reported on either a 1099-G or 1099-MISC.  Taxes will not automatically be withheld from benefits; employees can request voluntary tax withholding.

Other important aspects of PFL for the employer:

  • Organizations need to update their written policies and procedures/employee handbooks and by January 1, 2018, should post a notice informing employees of their rights under the new law. 
  • Make certain your disability policy is updated to include PFL and begin making employee payroll deductions.  The timing of the deductions may be based on whether your disability premium is paid on an annual basis on January 1, or paid quarterly in arrears.
  • When an employee takes PFL, make sure to continue health and other benefits during their leave.  An employee’s usual portion of health premiums must continue to be paid.

Please be aware of all the necessary changes that must be in place as of January 1, 2018 to comply with the New York State Paid Family Leave Benefits Law.

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The information reflected in this article was current at the time of publication. This information will not be modified or updated for any subsequent tax law changes, if any.