PFL Deductions Regulation Clarified

03.29.2018

A new regulation clarifies how deductions can be made from employee paychecks to fund New York’s Paid Family Leave program. 

Until this month, the general understanding was that a maximum of 0.126% of New York State Average Weekly Wage paycheck could be deducted from employees’ weekly wages.  That meant any deductions were capped at $1.65 a week.

Regulators have clarified that the deductions should not be capped by the New York State Average Weekly Wage.  An employer may deduct 0.126% of an employee’s weekly wage regardless of the state average weekly wage.  These deductions may continue until the employee hits the annual cap of $85.56.  This could mean that an employee is done with his or her annual deductions well before the end of the year, depending upon each employee’s rate of pay.  For example, if an employer gives out bonuses or an employee is paid by commission, an employee may hit the $85.56 cap very quickly.  The employer should then cease deductions until the following year.  

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