PFML law updates: Strategies for employer compliance
Read more from the Guardian Absence Management blog
In our recent webinar, Quarterly PFML Update: The latest from across the US, Guardian’s Eric DuPont, Vice President & Assistant General Counsel, Government Relations; Brian Morin, Head of Disability and State Programs, Product & Digital Strategy; and Jonathan Renfrew, Vice President, Government Relations, shared key insights on PFML laws across various states, highlighting important changes and strategies for employer compliance.
Here are the top takeaways from their discussion:
Understanding today’s PFML landscape
Seven in 10 employers say that keeping up with state and local leave laws is a challenge for their organization.1 “There are a couple of reasons why we see this. First, employers are much more likely these days to have employees working in multiple states, especially as remote work has become more prevalent," says Morin. “Also, these laws are complicated. Federal, state, and local leave laws may have some similarities and overlap, but they are different laws with their own nuances, benefits, restrictions, eligibility rules, you name it."
A few key features and trends across many state programs:
Eligibility: Most programs cover employees who work in a given state, regardless of where they live. Additional income or tenure requirements may apply.
Private plan alternatives: Many states allow employers to use private PFML plans, as long as they meet or exceed state mandated requirements. (Note: Washington, DC and Rhode Island do not allow private plan options).
Income replacement (“sliding scale”) benefits: Increasingly, many states are adopting tiered benefit structures designed to provide higher wage replacement to lower wage earners.
Family member definitions: These often go beyond federal FMLA standards. In addition to spouses and children, many states now include siblings, grandparents, and in-laws. NJ, WA, CT, OR, and CO even include others whom the employee considers to be like family (i.e., chosen family).
Safe leave provisions: Another trend is leave for victims of domestic violence or sexual assault. Some states also include leave for victims of harassment, stalking, and bias crime (i.e., CO, CT, NJ, and OR). This allows employees to take leave for medical care, participation in criminal proceedings, relocation, etc.
Job protection: PFML leave is increasingly job-protected. Requirements vary, as some states protect all approved PFML leaves, while others, like MN and CO, require a minimum tenure (i.e., 90 or 180 days).
Employer tax credit for PFML
Internal Revenue Code Section 45S provides a federal tax credit to eligible employers offering paid family and medical leave. For further questions about eligibility for the tax credit, please consult your tax counsel.
Current framework:
The tax credit equals a percentage (starting at 12.5%) of wages paid to employees on qualifying leave.
The percentage increases by 0.25% for each percentage point by which the amount paid to a qualifying employee exceeds 50% of the employee's wages, with a maximum of 25%.
Eligible uses of leave include those outlined under the Family and Medical Leave Act (FMLA) — such as bonding with a child, caring for a seriously ill family member, or dealing with military deployment.
Proposed changes in recent house bill:
The credit would become permanent.
Employers could claim the credit based on premiums paid for PFML insurance policies, not just on wages paid.
Employers would choose whether to claim the credit for premiums or wages.
The applicable credit percentage would mirror the existing scale, adjusted based on the policy’s income replacement level.
State-specific PFML program updates
State PFML programs have undergone many changes recently, and they will likely continue to be ever-changing into the foreseeable future. DuPont explains, “I think the area we're going to see a lot of action in is tweaking these programs. And that creates more work for organizations in trying to continue to comply with these laws as they evolve. And they'll evolve through learning, whether it's the states figuring out ways they think they could make the program better, or the industry thinking of suggestions, or interest groups proposing ideas on how to improve programs.”
With that said, here are some notable recent PFML updates from around the country:
Colorado:
Effective 7/1/25.
The State Average Weekly Wage (SAWW) increases to $1,543.94; maximum weekly benefit rises to $1,324.21 (90% of SAWW).
New notice requirements apply upon hire, transfer, PFML-qualifying events, and FMLA requests.
Effective 1/1/26: Up to 12 additional weeks of paid leave for parents with a child in NICU. Additionally, the state rate drops to 0.88% (from 0.90%).
Oregon:
Effective 7/6/25.
SAWW increases to $1,363.80.
New maximum weekly benefit: $1,636.56 (120% of SAWW); minimum benefit: $68.19 (5% of SAWW).
Washington:
Effective 1/1/26.
SAWW increases to $1,830; maximum weekly benefit: $1,647 (90% of SAWW).
New York:
COVID-19 Paid Sick Leave Law repealed as of 7/31/25.
Delaware:
Effective 1/1/26.
Employers who did not apply for private plans must pay payroll taxes in 2025.
Next application window for private plans opens 10/1/25.
Employers with state plan coverage will be required to pay Q1 and Q2 premium to the state by 7/31/25.
Minnesota:
Effective 1/1/26.
Regulations are expected to be finalized by fall 2025. Private plan application starting date is to be determined.
Maine:
Effective 5/1/26.
Employers opting out of state plan must still pay payroll tax during Q1 2025.
After 5/1/26, approvals will become effective the first of the month following approval.
Learn more
For more details on these updates, and to hear answers to additional questions asked by attendees, check out the full webinar. Staying ahead of PFML developments can help your organization ensure compliance and protect your employees during critical times in their lives.