Wednesday, April 12, 2017

Paid Family Leave Proposal in Vermont to Include Payroll Tax

PNN: VT Family Leave

Vermont state legislators have introduced legislation in both the House of Representatives and the Senate that would create, if enacted, the most generous paid family leave (PFL) program in the country (H.B. 196, S.B. 82). The proposals include a payroll tax – the employee portion would be paid through a payroll deduction. Employers would also pay a portion of the contribution.

Program Funded Through Employer, Employee Contributions
Beginning on July 1, 2018, contributions to PFL equal to 0.75% (0.93% in the House bill) of an employee’s wages would be paid by the employer. One-half of this would be deducted from the employee’s wages and one-half would be an employer contribution. Thereafter, the Commissioner of Labor would determine the rate of the employer and employee contribution (not to exceed 1%) on a biannual basis.

Leave Amount
Although the bills vary, in both plans the PFL program would require employers to allow employees to take up to 12 weeks of paid leave to care for a new child or for the employee’s own, or a family member’s, serious illness. Employees would become eligible for the program after working for an employer for six months. Beginning January 1, 2019, an eligible employee who earns an average weekly wage less than or equal to Vermont’s weekly livable wage would receive 90% of his or her average weekly wage.

States With Paid Family Leave Programs
Three states – California, New Jersey, and Rhode Island – and one city – San Francisco – have existing PFL programs (see The Payroll Source®, p. 7-43). New York enacted a PFL program last year that will take effect January 1, 2018.

Check back with Pay News Now as we continue to monitor the progress of the proposed legislation.