New York State has recently passed a law that you should know about. It creates for employees who work in New York time off for certain qualified family leave with benefits, which can be paid for by a new insurance policy. The cost of the policy is borne by employees through withholdings (which may begin 6 months before the law goes into effect). Alternatively, employers can self-insure.
For all payrolls beginning July 2017 and thereafter – You may withhold 0.126% of wages paid to your employees, but not more than $1.65 weekly ($3.30 biweekly; $3.58 semimonthly). The maximum withholding amount for each pay period is based on the Statewide Average published annually every March 31. You are not required to withhold, but since this additional insurance policy can be “paid for” by the employees, you will likely want to take advantage of this.
Some of the larger payroll processing companies (e.g., Paychex, ADP, Gusto) have already contacted employer customers regarding this new law. If we process your payroll, you should contact us as soon as possible with your intentions for withholding so that we can apply them to the calculations.
Beginning January 2018 – The NY Paid Family Leave law goes into effect. Therefore, your insurance policy should have January 1 as the effective date. If you decide to self-insure, you could be liable for family leave claims beginning January.
For 2018, the maximum paid leave that an employee can take for qualified family issues is 8 weeks. Over the next few years, the maximum will grow to 12 weeks.
For the insurance, you should contact the agent who handles your employer NYS Disability Benefits policy. You may be able to get a rider to that policy that covers the NY Paid Family Leave insurance beginning January 1.
Note: Although some of the details are similar, this law is different than the Federal Family Medical Leave Act.
New York still needs to issue regulations to help clarify the provisions of this new law. In the meantime, if you have questions, please feel free to call us.