Here are some important paid family and medical leave updates that impact household employers:
Colorado: Paid Family and Medical Leave Insurance Program
Passed into law in 2020, Colorado’s paid family and medical leave insurance program (FAMLI) program covers virtually all employers. Employer and employee contributions begin on January 1, 2023, with benefits becoming available on January 1, 2024.
Household employers are covered by this new program and must:
- Register with the FAMLI Division by the end of the first quarter of 2023
- Post the required program notice by January 1, 2023
- Submit quarterly wage reports and premiums to the FAMLI Division
For household employers with less than 10 workers, there is no employer contribution (50% of the premium) just a payroll deduction for employees (also 50% of the premium).
With the premium set to 0.9% of the worker’s wage, that means 0.45% of an employee’s pay can be deducted to cover their FAMLI contribution. Employers may also choose to pay the full amount if they would like.
Benefits are calculated on a sliding scale using the individual’s average weekly wage from the previous five calendar quarters in relation to the average weekly wage for the state of Colorado and may increase over time. As of July 2022, Colorado’s average weekly wage is $1,350.55.
Most Colorado employees become eligible to take paid leave after they have earned at least $2,500 in wages within the state, over a period of a year.
Individuals can use FAMLI leave to take time away from work to:
- Care for a new child, including adopted and fostered children
- Care for themselves if they have a serious health condition
- Care for a family member’s serious health condition
- Make arrangements for a family member’s military deployment
- Address the immediate safety needs and impact of domestic violence and/or sexual assault.
Most employees are eligible to receive up to twelve weeks of paid leave. Those who experience pregnancy or childbirth complications may receive an additional four weeks.
Massachusetts: Paid Family and Medical Leave
The Massachusetts Department of Family and Medical Leave, which administers the state’s Paid Family and Medical Leave (PFML) law, recently announced a few updates to the program.
Beginning on January 1, 2023, the PFML contribution rate for employers with less than 25 workers decreases from 0.344% to 0.318%. Employers can elect to have their workers pay the full 0.318% contribution.
In 2023, the maximum weekly PFML benefit for employees increases to $1,129.82. PFML provides partial wage replacement for workers up to a maximum weekly payment that is based on a calculation involving the employee’s average weekly wage and the state’s Average Weekly Wage. The maximum weekly benefit in 2022 was $1,084.31.
Employers are required to give their workers a written notice that includes information on PFML including contribution rates. This notice must be given within 30 days of hire for new employees and 30 days in advance of any contribution rate change for current employees. That means employers must provide notice of the new contribution rate to current employees by December 2, 2022.
You can download 2023 workforce notifications and rate sheets beginning November 15.
Under the state’s PFML, which includes household employers and their workers, employees are eligible to take up to 26 work weeks of paid leave in a benefit year for qualified reasons such as the employee’s own serious health condition or the serious health condition of a family member and leave to bond with a child after birth, adoption, or placement.
New York: Paid Family Leave
In New York state, the employee contribution rate for Paid Family Leave (PFL) will decrease in 2023, while the maximum weekly PFL benefit will increase.
The increase in the maximum weekly benefit cap is due to an increase in the state average weekly wage.
Employee compensation for PFL is 67% of the worker’s average weekly wage, up to a cap of 67% of the current New York state average weekly wage. The 2023 state average weekly wage has been calculated at $1,688.19, making the maximum weekly benefit $1,131.08. This is $62.72 more than the maximum weekly benefit for 2022.
In 2023, employees will contribute 0.455% of their gross wages per pay period to the PFL program, down from 0.511% in 2022. The maximum annual contribution for 2023 is $399.43 ($24.28 less than in 2022).
New York’s paid family leave law, which includes household employers and their workers, provides eligible employees with up to 12 weeks of PFL, funded entirely through employee paycheck deductions.
PFL coverage is typically added as a rider on an employer’s existing disability insurance policy.
Leave may be used for:
- Caring for a family member with a serious health condition;
- Birth, adoption, or fostering of a child;
- A spouse’s, domestic partner’s, child’s, or parent’s active military duty or impending active military duty; or
- Certain COVID-19-related reasons.
“Family member” is defined expansively and includes siblings as of Jan. 1, 2023.
Oregon: Paid Family and Medical Leave
Employee contributions to Oregon’s Paid Family and Medical Leave (PFML) program start January 1, 2023.
Contributions are a payroll tax of 1% of employee wages split between the employer (40%) and employee (60%).
Household employers with fewer than 25 workers are exempt from employer contributions to the program. However, employees are still required to contribute their share.
For example, if an employee’s paycheck totals $1,000 dollars, they would pay $6 as their portion of the contribution for that paycheck.
Employers should deduct their workers’ paid leave contributions from paychecks, then report wages and submit the employee contributions with their payroll reports.
Whether an employee works a full-time, part-time, or seasonal job – or for more than one employer – they may be eligible.
If your employee earned at least $1,000 in the prior year, Paid Leave Oregon will provide up to 12 weeks (14 for some pregnancy conditions) of paid, job-protected leave for qualified family, medical, or safety-related reasons.
Employees can take paid leave for:
- Birth of a child
- Bonding with a child
- In the first year after birth
- Through adoption
- When they’re placed in your home through foster care
- Care of a family member with a serious illness or injury
- Caring for themselves when they have a serious illness or injury
- Safe leave for survivors of sexual assaults, domestic violence, harassment, or stalking
The amount an employee gets paid while on leave will depend on how much they have earned. Some employees may receive 100% wage replacement.
Applications for leave will be accepted beginning September 3, 2023.
Employers must also provide notice to employees about the PFML program starting January 1, 2023.
GTM can help
As part of your comprehensive payroll and tax plan through GTM Payroll, we can make your employee paycheck deductions for these paid leave programs and remit the contributions to the proper state agency. That’s one less thing you need to figure out. To learn more about how we make nanny taxes easy for families, give us a call at (800) 929-9213 and talk with one of our household employment experts. It’s a complimentary, no-obligation consultation for you to ask questions and understand your responsibilities as a household employer. You can also schedule time with us at your convenience.
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