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New York Guides

A Step-by-Step Guide to Administering New York Paid Family Leave

New York Paid Family Leave: A Step-by-Step Admin Guide

If you run a cannabis business in New York, administering New York Paid Family Leave (PFL) is not optional and not complicated once you understand the structure. The state designed it to be employer-friendly on the operational side. That said, there are specific steps you have to take in the right order, and the consequences for skipping them range from compliance exposure to legal penalties.

This guide walks through exactly what you need to do, in the order you need to do it, with the current 2026 numbers built in.

Table of Contents

What New York PFL Is (and What It Is Not)

New York State Paid Family Leave provides eligible employees with up to 12 weeks of job-protected, paid time off to bond with a new child, care for a family member with a serious health condition, or to assist loved ones when a family member is deployed abroad on active military service.

It is a state insurance program, not a benefit you design or fund from your own pocket. The premiums come from employee payroll deductions, and the claims are paid by the insurance carrier, not by you.

There is one important boundary to understand before we go further: PFL is not for an employee’s own illness or medical condition. That is what New York State Disability Benefits (DBL) covers. An employee who is sick cannot take PFL for that reason. PFL is specifically for caregiving and family situations. This distinction matters because the two programs interact, and confusing them creates administrative problems.

Step 1: Get PFL Insurance Coverage

Covered employers, including any private employer with one or more employees working in New York state, are required to carry NY PFL insurance coverage, which is generally added as a rider to their existing New York State disability insurance policy.

If you already have a New York State DBL policy, call your carrier and add the PFL rider. This is typically straightforward. If you are a new employer who has not yet set up DBL coverage, you will need to do both at the same time.

If you are self-insured for disability, you may purchase a separate Paid Family Leave policy or apply to the NYS Workers’ Compensation Board to self-insure. For most small cannabis operators, the rider on your existing DBL policy is the simplest path.

Do this before you hire your first employee. You can’t retroactively obtain coverage after a leave event occurs.

Step 2: Understand Who Is Eligible

Not every employee on your team is immediately eligible to use PFL. Eligibility depends on how long they have worked for you and how many hours they work per week.

Full-time employees, meaning those who work a regular schedule of 20 or more hours per week, are eligible after 26 consecutive weeks of employment. Part-time employees who work a regular schedule of less than 20 hours per week are eligible after working 175 days, which do not need to be consecutive.

Once an employee meets the threshold, they remain eligible with you until their employment ends. If they leave and come back, or move to a new employer, the clock starts over.

A few additional points relevant to cannabis operations:

Independent contractors aren’t covered. If you are misclassifying workers as contractors when they function as employees, PFL exposure is one of several reasons that you will face serious problems.

Citizenship and immigration status are not factors in employee eligibility. If an employee is legally working for you in New York, they are covered.

Part-time dispensary staff and seasonal cultivation workers frequently raise eligibility questions. When in doubt, track the days that these employees work carefully from day one. You will need that record if an employee claims they have hit the 175-day threshold.

Step 3: Set Up Payroll Deductions

This is where your active administrative role comes in. New York State Paid Family Leave is insurance that may be funded by employees through payroll deductions. For 2026, employees will contribute 0.432% of their gross wages per pay period, with a maximum annual contribution of $411.91.

That deduction applies to every covered employee’s gross wages, every pay period, until they hit the annual cap. Once they hit $411.91, you stop deducting for the rest of the calendar year.

A few mechanics worth knowing:

Commissions and bonuses count as wages for PFL deduction purposes. If a budtender earns a performance bonus, that amount is subject to the PFL contribution calculation.

Before making any deductions from employees’ wages, employers should notify employees in writing that the deduction is being made to comply with New York’s Paid Family Leave law. This doesn’t have to be elaborate. A short written notice at hire, or a line in your onboarding paperwork, satisfies this requirement. We include it in our New York Cannabis Employee Handbook template.

Employers must also report employee contributions on tax Form W-2 in Box 14. Make sure your payroll provider is set up to do this correctly. If you process payroll manually or use a basic tool, confirm the W-2 reporting before year-end.

Employers may also choose to cover the PFL premium themselves and not deduct from employees at all. This is not common among small operators, but it is permitted.

Step 4: Post the Required Notice and Update Your Handbook

Your insurance carrier will provide you with a Notice of Compliance stating that you have Paid Family Leave insurance. Post and maintain this notice in plain view. This is Form PFL-120. It should go up in your break room, back office, or wherever your other required workplace postings are displayed.

Employers are also required to conspicuously post a notice at their worksite and electronically, to indicate their compliance with NY PFL requirements. Employers that maintain an employee handbook must include a NY PFL policy that outlines employees’ rights and obligations, including how to file a claim for NY PFL. Employers that do not maintain a handbook must provide each employee a written notice regarding all of the employee’s rights and obligations under NY PFL, including information on how to file a claim.

The state provides model handbook language you can use directly. You do not have to write this from scratch.

If you do not have a handbook at all, this is a good moment to build one. A handbook is not just a PFL compliance tool. It is the document that covers your anti-harassment policy, your leave policies, your at-will language, and dozens of other things New York requires you to communicate in writing. Operating without one is a significant risk for any cannabis employer in this state.

Our New York Cannabis Employee Handbook template includes a pre-written PFL policy alongside all the other required provisions. If you don’t want to start from a blank page, it is a practical starting point that is already built around New York’s requirements.

Step 5: Handle Waivers for Ineligible Employees

Some employees will never meet the eligibility threshold during their time with you. Employers are required to provide employees who are not expected to be eligible for PFL coverage with an opt-out PFL waiver.

This applies to short-term hires and anyone whose scheduled tenure is less than 26 weeks (full-time) or who will not reach 175 days (part-time). In cannabis operations, this often comes up with temporary harvest staff or seasonal retail hires.

The waiver form is available on the New York State PFL website. The employee signs it, you retain a copy, and you stop collecting PFL deductions from that person’s paycheck. If their schedule changes and they become eligible after all, the waiver can be revoked.

Don’t skip this step for truly short-term staff. Collecting deductions from someone who has a valid waiver, or failing to offer a waiver to someone who qualifies both create administrative problems down the line.

Step 6: When an Employee Requests Leave

This is where most small operators feel uncertain. Here’s what actually happens.

When an employee tells you they need to take PFL, your job is to provide them with the correct claim form and complete your portion of it. The insurance carrier, not you, decides whether the leave is approved.

The main form is the PFL-1 (Request for Paid Family Leave). Additional forms attach to the PFL-1 depending on the reason for leave:

  • PFL-2 is for bonding with a new child.
  • PFL-3 is for care of a family member with a serious health condition.
  • PFL-4 is for military qualifying events.

The employee completes their section of the PFL-1. You complete Part B, which asks for basic employment information, including the employee’s average weekly wage, hire date, and scheduled work hours. Then the employee submits the completed package directly to your insurance carrier.

When the need for PFL is foreseeable, as for the birth or placement of a child or for planned medical treatment, employees are generally required to provide their employer with 30 days’ advance notice. If the need for leave is not foreseeable, employees must provide notice as soon as practicable.

You cannot require more advance notice than the law allows. You also can’t deny leave because the timing is inconvenient. PFL is a right, not a request.

Medical and personal information submitted with paid family leave claims is confidential under New York law. Employers can’t access detailed medical records or condition information; they only receive confirmation that the employee is on approved leave.

Step 7: Manage the Leave Period

Once leave is approved, your operational responsibilities during the leave period are relatively limited, but a few things matter.

You are required to continue the employee’s health insurance plan if you provide one. New York Paid Family Leave has some of the strongest job protection requirements in the country, including ensuring workers keep their health insurance while on leave on the same terms they had while working. If your employees contribute to their health premiums, they can continue to do so during leave. You maintain your side of the contribution as you would if they were actively at work.

You can’t require an employee to use accrued paid time off (PTO or sick time) before or instead of PFL, unless the leave runs concurrently with FMLA. If it does run concurrently with FMLA, you can require the use of accrued time. This is a nuanced interaction, so if you are unsure whether FMLA applies to a specific situation, check with an employment attorney or HR specialist before making that call.

Leave can be taken all at once, or in increments of full days. An employee managing an ill parent, for example, might take two days per week over several months rather than a continuous block of time. You need to track this. The 12-week time off allowance is measured on a rolling 52-week calendar, so accurate records matter.

Don’t assign points or attendance marks for approved PFL absences. This will put you at risk of a retaliation claim. If your attendance policy is not designed to carve out protected leave, the leave period is a good time to flag that gap and fix it.

Step 8: Return to Work

An employer must reinstate the employee to the same or a comparable position when the employee returns from Paid Family Leave. Comparable means equivalent pay, benefits, and working conditions. You can’t return someone to a lesser role, fewer hours, or reduced pay because they took PFL.

Employees can’t be terminated, demoted, have their pay reduced, or be otherwise penalized for exercising their right to PFL. If a position was eliminated for legitimate business reasons during the leave period, that needs to be documented carefully and reviewed with counsel before communicating it to the employee.

Do a brief internal check when the employee returns. Confirm their role, pay rate, and schedule are unchanged. Confirm their health insurance was maintained throughout. File the leave documentation and retain it. New York has no specific PFL record retention period written into the statute, but best practice is to keep it in alignment with your general employment records retention schedule.

How PFL Interacts with Other Leave Laws

These interaction points are where operators most often make mistakes.

PFL and FMLA. Federal FMLA and New York PFL often cover the same event, but they have different eligibility standards. Employees may become eligible for PFL earlier in their employment than FMLA, typically at 26 weeks versus FMLA’s 12 months. The circumstances under which PFL can be taken are also broader than FMLA. For example, employees may use PFL to care for a grandparent or grandchild, but they can’t use FMLA for that purpose. When both apply to the same event, they run concurrently, meaning the employee uses both entitlements at the same time rather than stacking them.

PFL and DBL. PFL and New York State Disability Benefits cover different situations and cannot run at the same time. Employees who are eligible for both disability benefits and PFL during the same period can’t receive more than 26 total weeks of combined disability and PFL benefits during a 52-consecutive-calendar-week period. A common example in cannabis businesses is when a pregnant employee may use DBL for her own recovery period after childbirth, then transition to PFL to bond with the newborn. These are sequential, not simultaneous.

PFL and New York Paid Sick Leave. These are separate laws with different purposes and different qualifying reasons. They do not automatically run concurrently. PFL is for the specific caregiving and family events described above. New York Paid Sick Leave (and the city-level ESSTA in New York City) covers an employee’s own illness, medical appointments, and safe leave situations.

PFL and New York Paid Prenatal Leave. Starting in 2025, New York became the first state to require paid prenatal leave. This is an entirely separate entitlement from PFL, not a subset of it. A pregnant employee can use prenatal leave for healthcare appointments during pregnancy and later use PFL to bond after the birth. The entitlements don’t offset each other.

FAQ

Do I have to grant PFL to a key employee or manager whose absence causes operational problems?

Yes. Unlike FMLA, the regulations for PFL don’t include a key employee exception. No matter the size of the employer or the role played by the employee, once Paid Family Leave is approved, the employer must grant it and guarantee reinstatement at the conclusion of the leave.

Can I require documentation before approving PFL?

The insurance carrier handles documentation requirements, not you. The claim forms include certification from the relevant party, like a healthcare provider, or documentation of a new child. You don’t get to set your own documentation standard. Your role is to complete Part B of the PFL-1 and submit it with the employee’s package to the carrier.

What happens if I do not have PFL insurance and an employee needs it?

You become personally liable for the benefit. The state can also penalize you for being uninsured. This is not a situation you want to find yourself in. If you aren’t sure whether your disability carrier has already added the PFL rider, call them and confirm before your next hire.

What if an employee claims PFL but I think the reason is not legitimate?

Submit the claim to your carrier and let them make that determination. It is not your call. If the carrier denies the claim, the employee has a right to appeal. Your job is to process the paperwork, not determine the validity of the leave.

How does PFL interact with my attendance policy?

Approved PFL absences can’t count as occurrences under your attendance policy. Using them as the basis for discipline, even indirectly, is retaliation. If your current attendance policy doesn’t explicitly carve out protected leave, it needs to be revised. This is one of the more common compliance gaps we see in cannabis operations that have cobbled together their HR policies over time.

This guide is for general informational purposes only and doesn't substitute for legal or HR advice tailored to your business. Employment laws change, and cannabis regulations change even faster. When in doubt, loop in a licensed employment attorney before making decisions that affect your team.