What is New York Paid Family Leave and do I have to deduct it from employees?
New York Paid Family Leave is a state-mandated benefit that allows employees to take paid time off for qualifying family reasons. This includes bonding with a new child, caring for a family member with a serious health condition, or addressing certain needs when a family member is deployed for active military service. The benefit has been required since 2018 and applies to nearly all private employers in New York.
Yes, you have to deduct it from your employees’ wages. NY PFL is funded entirely through employee payroll deductions, not employer contributions. The deduction is mandatory for most employees who work in New York, regardless of whether you have one employee or one hundred. Part-time employees are covered too if they meet minimum work requirements.
Beyond withholding from wages, you also need Paid Family Leave insurance coverage. Most employers obtain this through their disability insurance carrier since PFL coverage is typically bundled with short-term disability. If your disability carrier doesn’t offer PFL, you can get coverage through the New York State Insurance Fund.
The contribution rate changes annually. For 2024, employees contribute 0.373% of their gross wages, capped at the state average weekly wage. The state publishes updated rates each fall for the following year. Your payroll system should be configured to apply the correct rate and cap automatically, which is where proper payroll system setup becomes important.
This is one of the requirements that Long Island business owners frequently miss when first setting up payroll. It’s easy to focus on federal withholding and forget about state-specific mandates like PFL and disability insurance. Getting it wrong means you’ll need to play catch-up on deductions or potentially cover costs that should have come from employee wages.
If you’re unsure whether your current payroll setup is handling PFL correctly, Long Island bookkeeping services that understand New York requirements can review your configuration and make sure you’re compliant before it becomes a problem.
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