2025 NY Paid Family Leave Benefits Increase: Budget Impact
NYS Paid Family Leave maximum weekly benefits jumped to $1,177 in 2025. See the cost breakdown for your business size.
New York employers are facing a 6.2% increase in Paid Family Leave costs this year, as the state's average weekly wage calculation drives maximum benefits to their highest level yet. With the New York State Average Weekly Wage rising to $1,757.19, businesses need to understand exactly how these changes impact their bottom line.
What the Law Requires
Under New York's Paid Family Leave law, employees now receive 67% of their average weekly wage, capped at $1,177.32 per week—up from $1,068.36 in 2024. Employee contributions also increased to 0.388% of gross wages, with a maximum annual deduction of $354.53. These rates apply to all private employers in New York State, regardless of size, effective January 1, 2025.
Impact by Business Size
- Small businesses (under 50 employees): Average annual cost increase of $1,200-$2,400 per eligible claim, with higher-paid employees driving the most significant impact on cash flow during leave periods.
- Mid-size companies (50-500): Budget for 15-25% more in replacement costs for employees earning above $60,000 annually, as these workers now qualify for substantially higher weekly benefits.
- Large employers (500+): Statistical modeling suggests 8-12% increase in total PFL program costs, with finance teams needing to adjust forecasting for Q2-Q4 leave planning.
Additional 2025 Changes
The benefits landscape became more complex with the introduction of New York's Paid Prenatal Leave requirement, adding 20 hours of paid leave annually for prenatal appointments. Meanwhile, New York's COVID-19 emergency sick leave provision expires July 31, 2025, removing one compliance obligation while adding others.
Compliance Deadlines
Payroll systems should already reflect the new 0.388% deduction rate, as implementation was required by January 1, 2025. Employers must update their employee handbooks and posting requirements to reflect current benefit levels. The next rate adjustment cycle begins in October 2025 for 2026 implementation.
Next Steps
Review your current payroll configuration to ensure proper deduction rates, and model the financial impact of increased benefit costs on your workforce planning. With employee financial security becoming increasingly important, these enhanced benefits can serve as a competitive advantage when properly communicated. Benton Oakfield's compliance team can help you navigate these requirements, update your policies, and optimize your benefits strategy for maximum ROI. Contact us to review your current Paid Family Leave administration and ensure your business stays compliant while managing costs effectively.
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