By Judy Buczek

As the January 1, 2018 effective date for the New York Paid Family Leave (NYPFL) law quickly approaches, it’s important for small businesses that employ even one individual in New York to take action to ensure they are informed on the legislation and prepared for any new responsibilities. NYPFL, a state-mandated benefit, will provide job-protected paid leave for eligible employees working in New York to:

  • Bond with a newborn, adopted or foster care child;
  • Care for a family member with a serious medical condition; or
  • Assist loved ones when a family member is deployed on active military duty (exigency leave).

The law will be phased in over the next four years. For 2018, employees are eligible for up to eight weeks of paid leave at 50% of their average weekly wage to a maximum weekly benefit of $652.96, which is 50% of the New York State Average Weekly Wage of $1,305.92.

Here are 10 ways small business owners can prepare for the new law:

Determine if your small business is a covered employer

Under the law, all New York private employers with at least one employee (not counting the owner) on each of 30 days in any calendar year are considered covered employers. NYPFL is required to be administered through an employer’s existing statutory short-term disability insurance (New York Disability Benefits Law, or NYDBL) or through the New York State Insurance Fund (SIF). Each employer must determine if it is a “covered employer” under New York Workers’ Compensation law.

Understand which of your employees will be eligible for leave

For an employee to be eligible for leave, they must physically work in New York; it does not matter where the employee lives or where the employer is headquartered. So a Chicago firm with an employee that telecommutes full time from her New York office must comply with the new law. Additional employee eligibility requirements include:

  • Employees whose regular employment schedule is 20 or more hours per week are eligible to take NYPFL after working at least 26 consecutive work weeks preceding the first full day the leave begins.
  • Employees whose regular employment schedule is less than 20 hours per week are eligible to take NYPFL after working 175 workdays preceding the first full day the leave begins.

Decide who will fund the coverage

NYPFL is intended to be funded entirely by employees through payroll deductions. However, employers are permitted to fund the premium themselves. The maximum employee contribution in 2018 is 0.126% of an employee’s weekly wage up to the annualized New York State Average Weekly Wage ($67,907.84 for 2018) for a maximum annual employee contribution of $85.56.

It’s important for employers to make the decision if they want their employees or the company to fund NYPFL. If it is decided to use payroll deductions, employers will want to contact their payroll department and/or payroll vendor to ensure they have an understanding of the contributions that need to be taken and when they should start (the law does permit deductions to be taken prior to the 1/1/18 effective date). Additional payroll considerations include:

  • Payroll deductions are to be based on total wages, including salaries, commissions and bonuses.
  • Any changes to employee pay during the year need to be tracked and deductions need to be updated accordingly.
  • If an employee won’t meet the eligibility requirements and files an NYPFL waiver, no payroll deductions should be taken.

Review your leave polices and employee handbooks

Businesses based in New York or with employees working in New York should review their existing paid time off, leave of absence, FMLA and disability policies. These policies may need to be revised to comply with the NYPFL program.

Additionally, if your small business maintains an employee handbook that provides written guidance concerning employee benefits or leave rights, information regarding NYPFL, along with an employee’s obligations and protections under the law, should be included.

Consider a full absence management solution

With the addition of NYPFL, small business owners must now be aware of how this law integrates with NYDBL, FMLA and any supplemental disability plans they may have in place. Depending on the type of employee absence, there could be overlap between state/federal leave laws and disability policies. Due to the complexities that may arise from just one employee leave, small business owners should consider partnering with an insurance carrier or another vendor who has the expertise and resources to handle total absence administration.

The benefits of an outsourced solution include:

  • Remain in compliance with various leave laws
  • Alleviate the burden of tracking multiple leaves
  • Integrate and streamline the claims/leave process
  • Provide management of medical review process

Train/educate managers and HR representatives

Small business owners should ensure their people managers and Human Resources staff are knowledgeable of the NYPFL law, and are in a position where they can answer employee questions and guide them to the appropriate resources.

Display the required NYPFL Compliance Poster in a common area

Similar to the requirement in place for NYDBL, employers will be required to conspicuously post and keep posted a notice in the workplace to indicate their compliance with the NYPFL requirements.

Plan ahead to avoid any staffing gaps for when employees do take leave

Be as proactive as possible so it will be business as usual in the event an employee does take leave. It may be beneficial to put back-up plans in place, document critical processes or have employees share the status of projects with other team members.

Get comfortable with the NYPFL law

Since the NYPFL law is new, small businesses should learn as much as they can – visit the NYPFL website (, connect with your insurance broker to ask questions and see what resources your insurance carrier has available. From eligibility requirements to funding to employee protections, there are many aspects to this law. Gaining a solid understanding of it will be invaluable to your business.

Educate and prepare employees

If your small business has employees working in New York, start getting the word out about NYPFL. January 1, 2018 isn’t far off. Whether it’s via email, information posted on an internal website or a hardcopy flyer, employees need to know how they become eligible for NYPFL, the maximum leave duration and benefit amount, and how to file a claim, among other topics.

Open enrollment season for employee benefits is a perfect time to start preparing for NYPFL. The earlier businesses start planning, the more successful the process will be in offering their employees this important workplace benefit.

Judy Buczek, Director – Group Life & Disability Product Management at The Guardian Life Insurance Company of AmericaGuardian, its subsidiaries, agents, and employees do not provide tax, legal, or accounting advice. Consult your tax, legal, or accounting professional regarding your individual situation.