LOGO

PROVIDING OUTSTANDING
TAX SEMINARS SINCE 1995

REGISTER

New York Family Leave

Practitioners should warn their business clients about the New York Family Leave Act, and they should be ready for it in their own practices and firms. New York State recently issued regulations regarding the program, so there are important new developments in the area.

Background: The program will provide family leave for the birth or adoption of a new child or to care for a seriously ill parent, child, spouse or other family member. In 2018, the amount of leave will be up to eight weeks, and the benefit will be up to 50% of the employee’s average weekly wage, subject to a cap, based on the statewide average weekly wage.

The program will be available for full-time and part-time employees who have been employed for at least six months. There are no exceptions based on the size of the company for which the employee works.

New Developments: While the provisions of the new program become effective on January 1, 2018, the New York State regulations indicate that employers have the option to begin withholding the cost of the program from the compensation of employees on or after July 1, 2017.

The amount that can be withheld is based on the average weekly wage of an employee. (The average weekly wage is computed as the average wage for the last 8 weeks.) (UPDATE: Later guidance changed this computation.  See our November 21, 2017 post for the updated calculation.)

The withholding rate is 0.126% of the average weekly wage, up to $1,305.92 per week. For employees that earn more than $1,305.92 per week, the withholding amount is capped at $1.65 per week.  (UPDATE: Later guidance changed the way the wage cap is applied.  See our November 21, 2017 post for the updated calculation.)  Employers are not required to withhold these amounts.

Employers will be required to add family leave coverage to their existing disability insurance policies as of January 1, 2018.  Beginning in or around August 2017, the carriers of disability insurance policies should provide information to employers about obtaining this new coverage.  While an employer is permitted to withhold the amounts discussed above, if an employer chooses not to withhold the cost of the plan from the compensation of employees, then the employer will bear the cost of the family leave policy.

The information provided herein is provided with the understanding that the author and publisher are not engaged in rendering legal, accounting or other professional service. As such, M + O = CPE, Inc. and the author disclaim any responsibility or liability for the information supplied herein or the application of said information.