(a) Payroll contributions are authorized to finance the payment of benefits under this chapter. The Department shall regulate the deduction, withholding, and payment of the contribution.
(b) Beginning on January 1, 2025, for each employee, an employer shall quarterly, or more frequently as regulated by the Department, remit to the Fund contributions in the form and manner determined by the Department.
(1) The contribution rate for medical leave benefits is as follows:
a. For 2025 and 2026, the contribution rate for medical leave benefits as a percentage of wages is 0.4%.
b. For 2027, and each calendar year after 2027, the Department shall set the contribution rate for medical leave benefits as a percentage of wages based on sound actuarial principles. The Department may not set the contribution rate higher than the rate necessary to obtain a total amount of contributions equal to 125% of the medical leave benefits paid during the immediately preceding calendar year plus an amount equal to 125% of the cost of administration of the payment of those benefits during the immediately preceding calendar year, less the amount of net assets remaining in the Fund as of December 31 of the immediately preceding calendar year.
(2) The contribution rate for family caregiving leave benefits is as follows:
a. For 2025 and 2026, the contribution rate for family caregiving leave benefits as a percentage of wages is 0.08%.
b. For 2027, and each calendar year after 2027, the Department shall set the contribution rate for family caregiving leave benefits based as a percentage of wages on sound actuarial principles. The Department may not set the contribution rate higher than the rate necessary to obtain a total amount of contributions equal to 125% of the family caregiving leave benefits paid during the immediately preceding calendar year plus an amount equal to 125% of the cost of administration of the payment of those benefits during the immediately preceding calendar year, less the amount of net assets remaining in the Fund as of December 31 of the immediately preceding calendar year.
(3) The contribution rate for parental leave benefits is as follows:
a. For 2025 and 2026, the contribution rate for parental leave benefits as a percentage of wages is 0.32%.
b. For 2027, and each calendar year after 2027, the Department shall set the contribution rate for parental leave benefits as a percentage of wages based on sound actuarial principles. The Department may not set the contribution rate higher than the rate necessary to obtain a total amount of contributions equal to 125% of the parental leave benefits paid during the immediately preceding calendar year plus an amount equal to 125% of the cost of administration of the payment of those benefits during the immediately preceding calendar year, less the amount of net assets remaining in the Fund as of December 31 of the immediately preceding calendar year.
(c)Limitation on benefits and contribution rates; evidentiary standard. —
(1)General. —
Notwithstanding a provision of this chapter to the contrary, this subsection controls with respect to benefits available under, and contributions required by, this chapter.
(2)Contribution rate; limitation. —a. For purposes of this subsection, “contribution rate” means the sum of the contribution rate for medical, family caregiving, and parental leave benefits.
b. If, after using the actuarial principles under subsection (b) of this section, the Department determines that the contribution rate would exceed 1.00%, paragraph (c)(3) of this section applies.
(3)Contribution redetermination; benefits reduction. —
If, under paragraph (c)(2)b. of this section, the Department determines that the contribution rate effective as of the first day beginning on the next calendar year would exceed 1.00%, effective as of and for such calendar year the Department shall reduce the percentage of average weekly wages for employees from 80% to the lowest percentage of average weekly wages for employees as necessary to compute a contribution rate that does not exceed 1.00%.
(4)Preservation of Fund balance. —
Notwithstanding anything in this chapter to the contrary, after using the actuarial principles under subsection (b) of this section and considering other information deemed appropriate under the circumstances by the Secretary, the Secretary may at any time reduce the percentage of average weekly wages for employees to the lowest percentage of average weekly wages for employees as necessary to attempt to prevent the projected balance of the Fund during the ensuing 12 month period from falling below a specific balance or other actuarially sound measure adopted by the Department.
(5)Evidentiary standard. —
An allegation of abuse in the exercise of the discretion authorized by this section must be established by clear and convincing evidence of actual abuse of discretion in the court then having primary jurisdiction.
(d) From the wages of an employee for whom a contribution is required under paragraph (b)(1) of this section, an employer shall deduct not greater than 50% of the contribution required for the employee. However, an employer may elect to pay all or any portion of the employee’s share of the contribution listed in paragraph (b)(1) of this section.
(e) From the wages of an employee for whom a contribution is required under paragraph (b)(2) of this section, an employer shall deduct not greater than 50% of the contribution required for the employee. However, an employer may elect to pay all or any portion of the employee’s share of the contribution listed in paragraph (b)(2) of this section.
(f) From the wages of an employee for whom a contribution is required under paragraph (b)(3) of this section, an employer shall deduct not greater than 50% of the contribution required for the employee. However, an employer may elect to pay all or any portion of the employee’s share of the contribution listed in paragraph (b)(3) of this section.
(g) An employer’s deduction from an employee’s wages under this section may only be made concurrent with, and proportionate to, the liability incurred by the employer and the payment of wages to the employee. The employer is liable for the contribution at the time that wages are paid and shall remit the total contribution required under subsection (b) of this section to the Fund. If the employer fails to deduct wages of an employee when the wages are paid, the employer remains liable for the full amount of the contribution, including that amount not deducted from an employee’s wages.
(h) A contribution that remains unpaid on the date it is due and payable, as determined by the Department, accrues interest, at a rate determined by the Department by regulation, from and after the due date until payment plus the accrued interest is received by the Fund. Interest collected under this section must be paid into the Fund.
(i) (1) An employer with an approved private plan under § 3716 of this title for medical leave benefits may not be required to remit the contributions required under paragraph (b)(1) of this section.
(2) An employer with an approved private plan under § 3716 of this title for family caregiving leave benefits may not be required to remit the contributions required under paragraph (b)(2) of this section.
(3) An employer with an approved private plan under § 3716 of this title for parental leave benefits may not be required to remit the contributions required under paragraph (b)(3) of this section.
(j) The Department may require from an employer a sworn or unsworn report with respect to employees of the employer which the Department deems necessary for the effective administration of this chapter. Information provided to the Department in the report must be held confidential and must not be published or be open to public inspection, other than to employees of the Department, in a manner that reveals an employee’s or employer’s identity. However, an employer or employer’s legal representative must be supplied with information from the report for purposes related to this chapter, and an employee or employee’s legal representative must be supplied with information from the report that relates only to the employee for purposes related to this chapter.
(k) An employee and employer may opt to file a waiver of the payroll contributions required under this section when an employee’s work schedule or length of employment with the employer is not expected to meet the requirements for eligibility for family and medical leave benefits.
(1) The employer shall provide notice to the employee that employee’s work schedule or length of employment with the employer is not expected to meet the requirements for eligibility for family and medical leave benefits.
(2) The employee shall sign, and the employer shall submit to the Department, a form waiving the payroll contributions required under this section because employee’s work schedule or length of employment with the employer is not expected to meet the requirements for eligibility for family and medical leave benefits.
(3) If, after an employee signs a waiver under paragraph (k)(2) of this section, the employee becomes eligible for family and medical leave benefits, the employee shall sign, and the employer shall submit to the Department, a form revoking the waiver under paragraph (k)(2) of this section. Deductions from wages may not begin until a waiver is revoked.
(4) The Department shall adopt a form for the waiver under paragraph (k)(2) of this section and the revocation of the waiver under paragraph (k)(3) of this section.
(l) An employer with an approved self-insured private plan under § 3716 of this title may collect contributions from employees beginning on July 30, 2025.