HR Alert

New York Announces Maximum Employee Contribution Rate Under State Paid Family Leave Act

Proposed and Final Regulations Also Available for Review

The New York State Department of Financial Services (DFS) has released the 2018 maximum employee contribution rate under the New York State Paid Family Leave Act. A set of proposed Paid Family Leave regulations along with final DFS regulations are also available for review.

Maximum Employee Contribution and DFS Final Rules
The premium rate for Family Leave Benefits and the maximum employee contribution for coverage beginning January 1, 2018 will be 0.126% of an employee's weekly wage up to and not to exceed the statewide average weekly wage, which is currently $1,305.92. The DFS is expected to set the maximum employee contribution on September 1 each subsequent year.

While proposed regulations (discussed below in the "Background" section) govern the Paid Family Leave Act itself, DFS has issued separate insurance regulations, which govern insurance ratings of family leave benefits coverage. Specifically, these final regulations, currently in effect, address minimum standards for the form and rating of family leave benefits coverage (including the establishment and operation of a risk adjustment mechanism).

Note: The DFS final regulations do not finalize the proposed Paid Family Leave regulations discussed below--they are separate matters. As such, employers are advised to contact a knowledgeable employment law attorney to seek individualized guidance.

New York has enacted a paid family leave policy into law that will apply to employers of all business sizes. When the law is fully phased-in over the next several years, employees will be eligible for 12 weeks of paid, job-protected leave when certain life events occur. During any period of family leave, employers are required to maintain any existing health benefits of eligible employees in force for the duration of such leave. The weekly benefit for family leave will be phased in over a period of several years. Click here for additional details on eligibility and the phase-in schedule.

Employers will be required to purchase a Paid Family Leave insurance policy or self-insure. The premium of the policy will be paid for by employees. No employer will be required to fund any portion of the family leave benefit. Employers will not have to pay an employee's salary while the worker is on leave--the employee will receive the Paid Family Leave benefit through the insurance policy.

A set of New York State Family Leave Act proposed regulations (Sect: 380-2.4(d)) provides that an employer is permitted, but not required, to collect the weekly employee contribution on July 1, 2017 for paid family leave coverage beginning on January 1, 2018. However, the New York State Paid Family Leave Act's proposed regulations have not yet been finalized. Therefore, the rules presented in the proposed regulations may be subject to change.

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