NY Paid Family Leave Premium & Contributions - Hands writing close-up

Statutory Benefits

NY Paid Family Leave Premium & Contributions

How Much Does NY Paid Family Leave Cost?

The 2021 maximum contribution rate for Paid Family Leave is 0.511% of the employee’s annualized wages capped at the annualized NY State Average Weekly Wage (NYSAWW) of $75,408.84 per year,* which means the maximum annual premium that can be charged to an employee is $385.34 per year.

Read the official rate announcement here

 


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Paid Family Leave Premium Rates

As Paid Family Leave is typically a rider to DBL (New York’s Statutory Temporary Disability), the premium gets billed together — and will need to be paid together. While the employer must pay the premium for their entire group, it is up to the employer how much of the premium they recoup through payroll deductions; but keep in mind: employers cannot collect more than the allowable yearly maximum contribution for Paid Family Leave, or take retroactive deductions.

*NY Department of Labor releases the updated NYSAWW on or about every March 31.


Estimate How Much NY Paid Family Leave Will Cost Your Business

Even if employers recoup Paid Family Leave premiums via PFL contributions from their employees, employers are still the ones remitting the actual PFL premium to their insurance carrier.


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Want to see about how much PFL will cost your business?
Use this premium estimator!

Estimate Your Paid Family Leave Premium

Difference Between Paid Family Leave Premium Payments And Payroll Deductions

Paid Family Leave was designed to be, and is often times called employee funded.  But, that doesn’t change how premiums get to the insurance carrier. In fact, it works just like it does with any other group benefits for which employers recoup all or some of the premium through employee payroll deductions.

We recommend you speak to your payroll provider if you have questions about withholdings as some details may vary by provider.



How Paid Family Leave Employee Withholdings
Work in NY

While Paid Family Leave is frequently referred to as an employee-funded benefit, businesses are not required to withhold from employees. If employers decide to take deductions, they can’t take more than each employee’s maximum contribution. The maximum contribution may change every year.


Here are a few examples of how the withholdings are intended to work

 

Example Employee John JennaJeff
Annual Income $50,000$80,000$80,000 + $50,000
bonus in February
Typical Weekly Income
(not including bonus)
$961.54$1,538.46$1,538.46
2021 Maximum Contribution Rate 0.511% of annual income, capped at $385.34
Annual Contribution $255.50$385.34$385.34
Typical Weekly Contribution $4.91$7.86$7.86
Bonus Week ContributionN/AN/A$263.36
Last Contribution Week 
in 2021
525017

Let's look at a further breakdown of how the withholdings works specifically for Jeff in 2021:


Jeff has a base salary of $80,000. Jeff’s typical weekly income is based on his base salary (not his total annual income) to calculate his typical weekly contribution: $1,538.46 x 0.511% = $7.86. Without a bonus, he would meet his annual maximum contribution in the fall, and not have any further withholdings for the rest of the year.

But Jeff landed a big international account in February, worth a $50,000 bonus. This changes things! His contribution in the bonus week now jumps to $263.36 (bonus plus typical weekly income times 0.511%). Due to the contribution spike in this week, he now pays his maximum contribution much sooner, in the spring, and thereby doesn’t need to render any further PFL contributions for the remainder of the year, no matter how many additional deals (bonuses) he lands. See chart for details. 

In summary:
PFL withholding can be a challenge, especially for employees whose compensation varies from week to week. The main thing to keep in mind is: if you decide to take deductions from your employees, by the end of 2021, you want to have collected 0.511% of annual wages capped at 0.511% of the annualized NYSAWW of $75,408.84, or $385.34.


WeekWagesWeekly Contribution Cumulative Contribution
1 $1,538.46 $7.86 $7.86
2 $1,538.46
$7.86
$15.72
3 $1,538.46
$7.86
$23.58
4 $1,538.46
$7.86
$31.44
5 $1,538.46
$7.86
$39.3
6 $1,538.46
$7.86
$47.16
7 $1,538.46
$7.86
$55.02
8 $51,538.46
$263.36
$318.38
9 $1,538.46
$7.86
$326.24
10 $1,538.46
$7.86
$334.96
11 $1,538.46
$7.86
$341.96
12 $1,538.46
$7.86
$349.82
13 $1,538.46
$7.86
$357.68
14 $1,538.46
$7.86
$365.54
15 $1,538.46
$7.86
$373.40
16 $1,538.46
$7.86
$381.26
17 $1,538.46
$4.08
$385.34
18 $1,538.46
$0.00
$385.34

 

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PFL Expert Tip:

While employers can choose to collect DBL and PFL contributions from an employee who is out on DBL or PFL, they cannot collect Paid Family Leave contributions from an employee who is not yet eligible for Paid Family Leave while that employee is out on DBL.
Read more about Paid Family Leave eligibility here.

 

The ABCs of PFL

Our in-depth guide provides everything you need to know about Paid Family Leave in New York. Here’s what you’ll find inside this 33-page guide:

  • PFL basics
  • Eligibility
  • Benefit eligibility and qualification period details
  • Benefits - updated for 2021
  • Claims
  • Premium - updated for 2021
  • Example withholdings - updated for 2021
  • Employer responsibilities
  • How PFL compares to DBL & FMLA
  • Tips from your PFL Experts
  • …And much more!
Download your copy now

 

 

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NY Paid Family Leave Premium & Withholdings FAQs

My payroll system withholds PFL from my employees’ wages. Doesn’t that mean my premium is paid? Why do I still get a bill?

No, if you withhold Paid Family Leave from your employees’ wages to cover the cost of PFL premiums, it doesn’t automatically mean that the premium is getting paid. While payroll systems offer the convenience of automated payroll withholdings, they don’t transfer funds to your insurer to pay your premium: there’s typically no direct connection between your payroll system and your insurance carrier. So, when the payroll provider withholds wages for Paid Family Leave, the funds are withheld from the employee and remain in your (the employer's) accounts. This leaves it up to you, the business, to pay your premium separately from the payroll process.

We recommend you speak to your payroll provider if you have questions about your specific situation, as this information may vary by provider.

Can the employer withhold for PFL if they don't withhold for DBL?

Yes.

How do self-funded groups set their rates?

They may not collect more than the maximum employee contribution level set by New York State.

The employer only remits the amount of the current employee level, what happens when there is turnover in the middle of the year, increase or decrease?

Employee counts will be reconciled at time of bill pay.

Are Paid Family Leave rates different for males vs. females?

No.

If an employee does not have immediate family members that PFL will apply to, should the employee be required to pay premiums? What if the employee does not want any money taken out of their paycheck? Can the employer force them?

Paid Family Leave is a mandatory benefit for employees at covered employers, just like DBL. The only employees who can file a waiver for contributions are those that work less than 26 weeks in a 52-week period (if full-time, or those who collect or are eligible to collect old age social security benefits) or 175 days in a 52-week period (if part-time). Essentially, if the employee is considered an employee under the law and doesn’t meet that description, they are required to contribute.

 

 


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Underwritten by:
ShelterPoint Life Insurance Company (principal office in Garden City, NY) in: NY
ShelterPoint only offers Paid Family Leave in form of a rider to DBL.
Policy Form# SPL DB0919 F

This page is for informational purposes only and is not intended to provide legal counsel. Please consult with an appropriate professional for legal and compliance advice. Any Paid Family Leave information is based on the applicable statutes and may change if guidance is issued by the State of New York.

 

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