New York PFL and Disability Insurance 2026: Employer Guide

1. Overview: Two Required Benefits

New York State mandates that virtually all private employers carry two separate insurance programs for their employees: Paid Family Leave (PFL) and Disability Benefits (DBL), also commonly referred to as State Disability Insurance (SDI). While both are employee-paid through payroll deductions, they serve fundamentally different purposes and operate under different rules.

PFL provides wage replacement when an employee needs time off for a qualifying family reason — bonding with a new child, caring for a seriously ill family member, or addressing needs arising from a family member’s military deployment. SDI, on the other hand, covers employees who can’t work because of their own off-the-job illness or injury.

Together, these two programs form a safety net that allows employees to take necessary leave without losing all of their income. For employers, the primary obligation is administrative: setting up coverage through a private insurance carrier and correctly withholding contributions from employee paychecks.

2. Paid Family Leave (PFL) — How It Works

New York’s Paid Family Leave program, enacted in 2016 and phased in starting January 1, 2018, provides eligible employees with job-protected, paid time off for qualifying family events. It is one of the most comprehensive state-level family leave programs in the country.

Qualifying Reasons for PFL

Employees may take Paid Family Leave for three categories of qualifying events:

• Bonding with a new child: Covers bonding time following the birth, adoption, or foster care placement of a child. Both parents are eligible, and the leave can be taken any time within the first 12 months.
• Caring for a family member with a serious health condition: Includes caring for a spouse, domestic partner, child, parent, parent-in-law, grandparent, grandchild, or sibling with a serious physical or mental health condition.
• Qualifying exigencies related to military deployment: When a spouse, domestic partner, child, or parent is on active military duty abroad or has been notified of an impending call or order to active duty, the employee can use PFL to address related needs such as attending military events, arranging child care, or handling financial and legal matters.

How PFL Benefits Are Paid

PFL benefits are paid by the insurance carrier, not the employer. When an employee files a claim, the insurance company processes it and issues benefit payments directly. The employer’s role is to facilitate the claims process by completing the employer portion of the request form and submitting it to the carrier.

Employees receive up to 12 weeks of paid leave per 52-week period. Leave can be taken all at once or intermittently in full-day increments. The weekly benefit amount is calculated as 67% of the employee’s average weekly wage, capped at 67% of the New York State Average Weekly Wage (SAWW).

3. PFL Rates and Benefits for 2026

Each year, the New York State Department of Financial Services sets the PFL premium rate and maximum benefit for the upcoming year based on the statewide average weekly wage. For 2026, here are the key numbers:

• Employee contribution rate: Approximately 0.388% of the employee’s gross wages per pay period
• Wage cap: Contributions are capped at the current statewide average weekly wage (SAWW), annualized. Employees earning above this cap do not pay PFL premiums on the excess wages.
• Maximum weekly benefit: 67% of the SAWW
• Leave duration: Up to 12 weeks per 52-week period
• Who pays: 100% employee-funded through payroll deductions

Since PFL is entirely employee-funded, there is no direct cost to the employer beyond the administrative responsibility of withholding and remitting premiums. However, failure to maintain coverage can result in significant penalties from the Workers’ Compensation Board, including fines of $500 per 10 days of non-compliance.

4. Disability Benefits (DBL/SDI) — How It Works

New York’s Disability Benefits Law (DBL), often called State Disability Insurance (SDI), has been in effect since 1950 — decades before PFL was enacted. It provides partial wage replacement to employees who are unable to work due to an off-the-job illness or injury, including pregnancy-related disabilities.

What SDI Covers

• Off-the-job injuries: A broken leg from a weekend hiking accident, recovery from surgery unrelated to work, or any physical injury not arising from employment
• Illnesses: Flu, COVID-19, chronic conditions that temporarily prevent working, mental health conditions requiring time off
• Pregnancy-related disability: The period before and after childbirth during which a healthcare provider certifies the employee is unable to work (typically 6–8 weeks for a normal delivery, longer for C-sections or complications)

Important: SDI does not cover work-related injuries or illnesses — those fall under Workers’ Compensation, which is a separate employer-paid insurance requirement.

How SDI Benefits Are Paid

Like PFL, disability benefits are paid by the insurance carrier after the employee files a claim. Benefits begin after a 7-day waiting period (no benefits for the first 7 consecutive days of disability). Employees can receive benefits for up to 26 weeks during a 52-week period.

The weekly benefit is approximately 50% of the employee’s average weekly wage, subject to a statutory maximum. The maximum weekly benefit has historically been set at a relatively modest level — currently around $170 per week, though this amount is subject to periodic adjustment.

5. SDI Rates for 2026

The employee contribution for New York disability insurance is capped by statute at a straightforward flat amount:

• Maximum employee contribution: $0.60 per week (or $0.14 per biweekly paycheck, if your carrier prorates differently)
• Who pays: Primarily employee-funded through payroll deductions. Employers may choose to pay some or all of the premium themselves, but the maximum employee withholding is $0.60/week.
• Maximum weekly benefit: Approximately $170/week (50% of average weekly wage, subject to statutory cap)
• Benefit duration: Up to 26 weeks in a 52-week period
• Waiting period: 7 consecutive days of disability

Unlike PFL, which is calculated as a percentage of wages, the SDI employee contribution is a flat weekly amount, making it simpler to withhold. The modest employee cost reflects the fact that SDI benefits themselves are relatively low compared to PFL.

PFL vs. SDI: Side-by-Side Comparison

6. Private Insurance Carrier Requirement

One of the most distinctive aspects of New York’s PFL and SDI programs is that they are not administered through a state-run fund. Unlike California’s EDD-managed SDI/PFL program or New Jersey’s state-run Temporary Disability Insurance, New York requires employers to obtain coverage from the private market.

Your Options for Coverage

• Purchase a policy from an approved insurance carrier: This is the most common route. Major carriers in New York include The Hartford, Sun Life, Unum, MetLife, Aflac, Guardian, and the New York State Insurance Fund (NYSIF). Your Workers’ Compensation carrier may also offer PFL and DBL as add-ons or bundled policies.
• Self-insure with Workers’ Compensation Board approval: Larger employers with sufficient financial resources can apply to self-insure. This requires posting a security deposit and demonstrating the ability to pay claims directly. The Board must approve the self-insurance plan before it takes effect.

Combined Policies

Most insurance carriers offer PFL and DBL as a combined policy, often bundled with your Workers’ Compensation coverage. This simplifies administration because you deal with a single carrier for all three programs. When shopping for coverage, ask carriers about combined PFL/DBL policies to reduce paperwork and potentially lower costs.

7. Employer Responsibilities

While PFL and SDI are employee-funded programs, employers bear significant administrative duties. Here is what you are responsible for:

Withholding and Remitting Premiums

• PFL: Deduct approximately 0.388% of each employee’s gross wages per pay period (up to the SAWW cap). Remit withheld premiums to your insurance carrier on the schedule they specify — typically monthly or quarterly.
• SDI: Deduct up to $0.60 per week from each covered employee’s paycheck. Remit to the carrier as directed.

Maintaining Active Coverage

• Obtain a PFL/DBL policy before your first employee’s 30th day of employment
• Keep your policy current and pay premiums on time
• If you change carriers, ensure there is no gap in coverage
• Post the required Notice of Compliance (DB-120) in your workplace where employees can see it

Claims Administration

• When an employee submits a PFL or disability claim, complete the employer’s section of the request form promptly
• For PFL: Complete and return the employer’s portion within 3 business days
• Provide wage and employment verification as required by the carrier
• Do not retaliate against employees who file claims or take leave

The DB-820 Form

When you first obtain PFL and DBL coverage, your carrier will file form DB-820 (Notice of Compliance) with the Workers’ Compensation Board. This form confirms that you have the required coverage in place. If you switch carriers, the new carrier files a new DB-820 and the old carrier files a cancellation notice. Keep copies of all DB-820 filings in your records.

Recordkeeping

• Maintain records of all PFL and SDI deductions from employee paychecks
• Keep copies of all claim forms filed by employees
• Retain documentation of your insurance policy and premium payments
• Keep these records for at least 4 years, consistent with New York’s general payroll recordkeeping requirements

8. Employee Eligibility

Not every worker qualifies for PFL and SDI coverage from day one. Eligibility depends on the employee’s work schedule:

PFL Eligibility

• Full-time employees (regularly scheduled for 20+ hours/week): Eligible after 26 consecutive weeks of employment
• Part-time employees (regularly scheduled for fewer than 20 hours/week): Eligible after 175 days worked
• Employers must begin withholding PFL premiums from the first day of employment, even during the waiting period

SDI Eligibility

• Full-time employees: Eligible after 4 consecutive weeks of employment
• Part-time employees (regularly scheduled for fewer than 20 hours/week): Eligible after 25 days worked

Who Is Exempt?

Certain workers are not covered by PFL and SDI:

• Federal government employees
• Certain religious organization employees (clergy may be exempt)
• Independent contractors and 1099 workers (they are not employees)
• Employees who work fewer than the minimum days/weeks required and choose to file a waiver

9. How to Set Up Coverage

If you are a new employer in New York or have not yet set up PFL and DBL coverage, follow these steps:

1. Choose an insurance carrier: Contact an approved PFL/DBL carrier or an insurance broker who specializes in New York business insurance. Get quotes from multiple carriers. The New York Workers’ Compensation Board website maintains a list of authorized carriers.
2. Select your policy: Most employers choose a combined PFL/DBL policy. Review the terms, premium billing schedule, and claims process.
3. Submit your application: The carrier will handle filing the DB-820 form with the Workers’ Compensation Board to confirm your coverage.
4. Set up payroll deductions: Configure your payroll system to withhold PFL premiums (~0.388% of wages) and SDI contributions (up to $0.60/week) from every covered employee’s paycheck.
5. Post required notices: Display the Notice of Compliance (DB-120) in a visible workplace location. Your carrier will provide this notice.
6. Educate your employees: Inform employees about their PFL and SDI benefits, how to file a claim, and how much is being withheld from their pay.

10. Common Employer Mistakes

PFL and SDI compliance trips up employers more often than you might expect. Here are the most common mistakes and how to avoid them:

1. Not obtaining coverage at all: Some small employers, especially those new to New York, don’t realize PFL and DBL are mandatory. Even if you have only one employee, you need coverage. Penalties start at $500 per 10-day period of non-compliance.
2. Letting the policy lapse: If you miss premium payments and your carrier cancels the policy, you are uninsured. You become personally liable for any claims and subject to WCB penalties.
3. Failing to withhold employee contributions: If you don’t deduct PFL and SDI from employee paychecks, you cannot retroactively collect the missed deductions. You eat the cost.
4. Over-withholding PFL: PFL premiums are capped at the SAWW. For high earners, make sure your payroll system stops withholding once the annual cap is reached.
5. Confusing PFL with FMLA: PFL and the federal Family and Medical Leave Act (FMLA) are separate programs. An employee may be eligible for one but not the other, or both simultaneously. PFL provides wage replacement; FMLA provides unpaid job-protected leave. They can run concurrently, but the rules for each are different.
6. Delaying claims paperwork: Employers must complete their portion of a PFL claim within 3 business days. Dragging your feet delays the employee’s benefits and can result in complaints to the WCB.
7. Retaliating against employees who take leave: New York law prohibits retaliation — including termination, demotion, or discipline — against employees who file PFL or SDI claims. Violations can result in lawsuits and WCB penalties.
8. Not posting the required notice: The DB-120 Notice of Compliance must be posted in a conspicuous workplace location. Failure to post is a compliance violation, even if you have coverage.
9. Ignoring part-time and seasonal workers: PFL and SDI apply to part-time employees too, once they meet the eligibility thresholds. Don’t assume only full-time workers need coverage.
10. Not tracking the 52-week benefit period: PFL and SDI benefits reset on a rolling 52-week basis, not a calendar year. Make sure you and your carrier are tracking benefit usage correctly.

11. Frequently Asked Questions

Do employers pay anything for PFL or SDI?

PFL is 100% employee-funded. For SDI, the employee contribution is capped at $0.60/week. If the actual premium exceeds the employee contribution, the employer covers the difference. In practice, most employers absorb a small portion of the SDI cost. Neither program is a significant direct expense for employers — the primary cost is administrative.

Can an employee use PFL and SDI at the same time?

No. An employee cannot collect both PFL and SDI benefits simultaneously. However, they can be used sequentially. For example, a new mother might use SDI during her pregnancy-related disability period, then switch to PFL for bonding time with the baby.

What happens if I don’t have PFL/DBL coverage?

The Workers’ Compensation Board can impose penalties of $500 per 10-day period of non-compliance, plus an additional penalty equal to 1% of the employer’s payroll for the period of non-coverage. You also become personally liable for paying any employee claims out of pocket.

Is PFL the same as FMLA?

No. FMLA is a federal law that provides up to 12 weeks of unpaid job-protected leave for employees of covered employers (50+ employees within 75 miles). PFL is a New York State program that provides paid leave funded through employee payroll deductions. An employee may be eligible for both, and the leave may run concurrently, but they are governed by different rules.

Do I need PFL/SDI if I only have one employee?

Yes. New York’s PFL and DBL requirements apply to employers with one or more employees. There is no minimum size threshold.

Can I use my Workers’ Comp carrier for PFL and DBL?

Often, yes. Many Workers’ Compensation carriers in New York also offer PFL and DBL policies, and combining them can simplify billing and claims administration. The New York State Insurance Fund (NYSIF) is one common provider that offers all three.

What if an employee is injured on the job?

On-the-job injuries are covered by Workers’ Compensation insurance, not SDI. SDI only covers off-the-job illnesses and injuries. If there is any question about whether an injury is work-related, the employee should file claims under both programs and let the carriers determine coverage.

How do I handle employees who work in multiple states?

Generally, PFL and SDI coverage is based on where the employee works, not where the employer is based. Employees who primarily work in New York are covered under New York’s PFL and DBL laws. If you have employees working in other states, you may need to comply with those states’ disability and family leave programs as well.