Serve an even larger market in New York with this stand-alone benefit.
Gig workers, independent contractors, and others with “alternative arrangements” for their main job make up roughly 10% of the total US workforce, according to the most recent US Department of Labor statistics. Other reports, including a recent infographic from freelancer platform Upwork, found that number to be much higher: 38% of US workers freelanced in 2023.
Many independent contractors and gig workers pursue that career path for the freedom and flexibility that running their own business can offer. But it also comes with downsides. Having no paid time off creates a sense of freedom but can create cash flow problems if you’re forced to take time off. Essentially, independent contractors have no financial safety net other than what they build through private insurance, savings, and investments.
Unlike employees who have the benefit of an HR department or benefits advisor to guide them, independent contractors often don’t know what type of insurance coverage they need. That’s where New York insurance brokers can come in – and The DBL Center can help.
How Does NY State Define Self-Employed Workers?
Self-employed workers receive a 1099 form to show their income, rather than a W-2 form. They do not have payroll taxes withheld, and are responsible for claiming their income and paying any taxes owed, including self-employment taxes.
A self-employed individual might consider themselves an independent contractor, freelancer, “gig worker,” or a business owner with a sole proprietorship, LLC or LLP.
Gig workers include Uber and Lyft drivers, InstaCart shoppers and DoorDash delivery drivers, but also people who run their own business on a full-time basis, including graphic designers, business consultants, and technology experts. Full-time independent workers made up 16.7% of the US workforce in 2024, according to Upwork. Full-timers are the ones more likely to benefit from Paid Family Leave in New York.
Independent Contractors and PFL in New York: Why It’s Important
In 2017, New York State introduced the Paid Family Leave Act, offering up to 12 weeks of paid leave to care for a newborn, adopted, or foster care child within the first year, to care for an ill or disabled family member, or to stay home while a military spouse is deployed. Ultimately, PFL phased in to provide 67% of a worker’s wages, up to a cap of $1,177 in 2025.
New York is one of the states that offers the option for self-employed people to buy a private PFL policy with equal benefits and the same premium rates they would pay through an employer. This is important from a financial and a societal standpoint.
Often, people start their own business or take on gig work to find the flexibility they need to raise a family or take care of aging parents. In the case of sandwich generation members, they might be juggling both these situations. While it’s entirely possible to “do it all,” and run a successful business while caring for family, there are times caregiving duties take precedent.
For instance, in the first year of a child’s life, the birthing parent should take time to rest and bond without the stress of work. The other parent, too, should be given the same opportunity to bond and care for the new child.
Business owners caring for aging parents may need a break from work to focus entirely on their parent – perhaps during a move to senior living, after a significant surgery or treatment, or even in the final months of their parents’ life.
During these important and emotional times, independent contractors are likely not earning the income they need to live. Not only do they not have the time to work, they might not have the emotional bandwidth. It’s better for their own mental health, for the person they’re caring for and, ultimately, their business, to take time off.
But how can they fund that leave?
They might be able to dip into savings or investments, but it makes more financial sense to make up their lost income through a low-cost insurance policy.
Should 1099 Contractors Purchase PFL?
Self-employed individuals are not required to purchase PFL coverage. But for most independent contractors, it’s a smart financial move.
Independent contractors should consider a PFL policy if they foresee raising children in the future, have aging parents who may eventually need care, or have a spouse in the military. Other individuals — for instance, someone with no parents and no intention of having, adopting or fostering children — may not benefit from the policy and would be wiser to invest their money in other ways.
Keep in mind, there’s a two-year waiting period to file a PFL claim unless the independent contractor invests in the coverage within 26 weeks of launching their business or becoming an independent contractor with 1099 income.
What Brokers Need to Know About PFL for Self-Employed People
The DBL Center can help you find the right policy for individuals in your network, opening the door to additional revenue streams. Many independent contractors should consider investing in not just DBL and PFL in NY, but life insurance, long-term disability insurance (LTD), and long-term care insurance.
The DBL Center works with an extensive network of top-rated carriers and can help your individual and small business clients write these policies as a package to save money. Brokers can offer PFL as a rider to DBL benefits, or as a stand-alone PFL benefit through select carriers.
Have questions about PFL for 1099 contractors? Reach out to The DBL Center today.
FAQs
Find out what people are asking about PFL for independent contractors.
Can you get maternity leave as an independent contractor?
In New York and a growing number of states, 1099 independent contractors can purchase a private paid family leave policy from an approved carrier. PFL offers up to 12 weeks of partial pay replacement following the birth of a child, so it can fill the role of maternity leave.
Do self-employed people get paternity leave in NYS?
Self-employed people in New York can purchase a private Paid Family Leave policy that provides up to 12 weeks of partial pay replacement following the birth of a newborn, or the foster care or adoption of a child within the first year. Since PFL can apply to the non-birthing parent, it can be considered a form of paternity leave.
Do you get a 1099 for Paid Family Leave?
If you file a PFL claim in NY, your employer should issue a 1099-G or 1099-MISC form showing your taxable income from PFL benefits. Employers do not automatically withhold taxes from PFL benefit payouts, but employees can request to have taxes withheld by filing IRS Form W-4V.
