On June 1, 2017, the Insurance Department issued its final regulations on the Paid Family Leave law which is scheduled to become effective January 1, 2018. Regulations by an agency are a common way for a statute to be implemented. Stated differently, regulations provide the details we need in order to know how to comply with laws.
One important aspect we’ve been waiting for is how much will this benefit cost? This is an expense that’s appropriate to pass along to employees via payroll deduction.
We now know the answer. The rate is based on a percentage of an employee’s compensation and is set at 0.126% of the weekly wage. Total cost is capped by reference to New York State’s current average weekly wage which is $1,305.92. So it becomes a simple math problem: at most the cost per employee will be $1,305.92 x 0.126%.
Practical Pointer: This translates into a maximum employee contribution of $1.65 per week.
In the coming months, we’ll be revisiting the regulations to provide useful information for New York employers who are updating their policies and procedures in order to prepare for the January 1st implementation date. As always, we welcome your comments and questions.