New Hampshire and Virginia Provide Voluntary Paid Family Leave

Mathew Moldawer
Mathew Moldawer
05/16/2023

At the time of this article, California, Connecticut, the District of Columbia, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, Virginia, and Washington have paid family leave laws in the books.  Colorado, Delaware, Maryland, and Oregon have paid family leave laws that are to take effect in the upcoming years.

These plans all contain their own idiosyncrasies. Some, such as Connecticut, New Jersey, New York, and Rhode Island are funded through deductions from the employee only; states like California, Massachusetts, and Washington are funded through deductions from both the employee and employer; the District of Columbia is the only one funded solely through contributions from employers.  The differences do not end there: there are variations for what events leave may be taken, how much leave is afforded to the covered employee, who is considered a covered employee/employer, and whether an employer may “opt out” of the paid family leave plan. Yet, even with these differences, there is one plan that does not receive nearly the attention it should: voluntary paid family leave plans.

Right now, there are two states that employ paid family leave on a voluntary basis: New Hampshire and Virginia.  New Hampshire was the first state to enact voluntary family leave.  Under N.H. Rev. Stat. Ann. § 21-I:99-111, New Hampshire made paid family leave insurance (FMLI) available for purchase within the state through private insurance companies. The New Hampshire program enables employees or employers to purchase family medical leave insurance to provide wage replacement benefits.  

The State contracted with MetLife to provide their benefits, and employers that use MetLife enjoy a business enterprise tax (BET) credit of 50% of the premium paid by the employer for the insurance coverage of their workers.  An employee may enroll individually and not through their employer, and if the employer has 50 or more employees, they are required to collect the premiums through their payroll.

Virginia made changes to their insurance code to implement their voluntary plan. Va. Code § 38.2-107.2 defines private family leave insurance as an insurance policy issued to an employer for wage replacement for an employee in the event of income loss due to (i) the birth of a child or the birth of a child or adoption of a child by the employee; (ii) placement of a child with the employee for foster care; (iii) care of a family member of the employee who has a serious health condition; or (iv) circumstances arising out of the fact that the employee’s family member who is a service member is on active duty or has been notified of an impending call or order to active duty.

The term “family leave insurance” was added to Va. Code § 38.2-316, which concerns policy forms to be filed with the insurance commission. “Family leave insurance” and the citation thereto was also added to definitions for “Life and annuities insurance agent” within Va. Code § 38.2-1800.  While certainly not what advocates envision to support family leave, it may be merely the first step towards a compulsory family leave plan in the state, as the 2023 Virginia legislative session ended with SB 1101, for paid family leave funded by employees and employer, in a special subcommittee in February.

It will be interesting to see which state will implement paid family leave next, and with alternatives to mandatory paid family leave, such as a voluntary plan, compliance with any state plan may require understanding and planning on the part of a business owner. The attorneys at Kollman & Saucier can help any business navigate the complexities of the current or upcoming paid family leave laws.

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